Imran

A STUDY ON MUTUAL FUNDS
CHAPTER-1
INTRODUCTION TO MUTUAL FUNDS Mutual Funds are investment institutions set up to manage money pooled in from the public. The advantages of investing in Mutual Funds are the professional expertise they employ coupled with the variations offered on the basis of asset classification and the diversification of the chosen portfolio aimed at optimizing the risk for the required return. The benefits that can be accrued from Mutual Funds are
The schemes could be added to the portfolio with online updates for
monitoring the performance of your investments in Mutual Funds.
The comprehensive search, which gets you the fund matching your
criteria.
The comparison of various schemes of different Mutual Funds based on
the critical and most sought after investment criteria.
The analysis of different schemes and the outlook for the same. List of new launches in the market provided continuously.
Basically, Mutual funds are trusts that are formed to mobilize the savings from the people and pool them together to invest within the securities markets. The main advantage of mutual funds is that it is professionally managed. And the general idea is for investors to contribute small amounts into units in the various schemes, which in turn is deployed in
the various markets. This way, any investor who is not in a position to directly invest in the markets can take advantage of this route. UTI is the oldest of Indian mutual funds, having entered the arena with the launch of the Unit Scheme - 64 in 1964, hence the alphanumeric name. It was only in 1998 that other public sector banks were allowed to enter into the segment which was followed by a whole range of Asset Management companies including almost all the leading international portfolio managers including Merrill Lynch, Templeton, and Prudential among others.
There are several different ways one can diversify a portfolio, such as the different categories of the Morningstar style box, which contain several different asset classes. But another common way to diversify is between the various sectors of the economy. This is usually accomplished with mutual funds that concentrate in one of the major sectors, such as natural resources or utilities. This article will examine the nature and composition of sector funds and the advantages and disadvantages that they present to investors.
What is a Sector Fund? As the name implies, a sector fund is a mutual fund that invests in a specific sector of the economy, such as energy or utilities. Sector funds come in many different flavors and can
vary substantially in market capitalization, investment objective (i.e. growth and/or income) and class of securities within the portfolio. Sector funds do not fall into a particular category in the Morningstar style box, such as large-cap value or mid-cap growth; instead, Morningstar ranks and analyzes sector funds in the following eight categories.
1.
Natural Resources Funds - These funds invest in oil and gas and other
energy sources, as well as timber and forestry. These funds are usually appropriate for long-term growth investors. 2. Utility Funds - These funds invest in securities of utility companies. They are us fixed-income investors, although they may have a growth element as well.
3. Real Estate Funds - These funds provide a way for smaller investors to participate in the gains from real estate without having to actually buy real property. They often provide both growth and income. 4. Financial Funds - These funds invest in the financial industry. Holdings will include securities of investment, insurance, banking, mortgage and accounting firms.
5. Healthcare Funds - These funds can cover any kind of for-profit medical institution, such as pharmaceutical companies. Many of these funds also focus on biotechnology and the companies that make pioneering advances in this industry.
6. Technology Funds - These funds seek to provide exposure in the tech sector. This sector focuses primarily on computers, electronics and other informational technology that is used in a wide range of applications.
7. Communications Funds - These funds focus on the telecommunications sector, but can include internet-related companies as well.
8. Precious Metals Funds - These funds provide exposure to a variety of metals, such as gold, silver, platinum, palladium and copper. some sector funds focus on a specific subsector of the economy, such as banking or semiconductors. Morningstar classifies these funds into larger peer groups for analytical purposes.
Historical Performance Investors who are considering sector funds should be prepared to accept greater risk and volatility than what they will endure in the broader-based funds and index funds. The various sectors of the U.S. economy have historically had higher highs and lower lows than the economy as a whole. Subsectors, such as biotechnology, can be even more volatile. But sectors do perform differently at various points in the overall economic cycle. Some sectors do well in bull markets but poorly in bear markets, while others can grow earnings even during sluggish periods and recessions. Sector funds also tend to have higher turnover than other types of funds, so tax-conscious investors should pay close attention to capital gains distribution rates.
Why Invest in Sector Funds? Sector funds are designed to provide market participation for investors whose portfolios lack exposure in this sector. They can also provide a greater measure of diversification within a given sector than may be otherwise possible. The main reason that an investor would want to consider a sector fund is the same as for a particular individual stock: the investor feels that the sector is about to experience a period of strong growth. Instead of investing directly in the stock of a company o pay steady that has just released a revolutionary new technology, the investor could consider allocating assets to a technology fund that holds that company's stock in its portfolio. Sector funds can also serve to hedge a portfolio, as some sectors tend to move opposite the economy as a whole. For example, high energy prices can be a drain on the rest of the economy but a boon to the energy companies themselves. Investors seeking to profit from this condition would benefit from investing a small portion of their portfolios in an energy fund. Sensible Sector Fund Investing Important thresholds for any investor considering focused sector bets is to own a diversified mainstream portfolio. In order to diversify efficiently, planners should carefully examine possible overlap between any potential sector fund and the client's current portfolio, so that any sector fund that is chosen contains the fewest possible stocks that are already held outright or held in another fund.
Many of the security holdings within a sector fund are also often found in the mainstream funds of that fund family. For example, major oil stocks, such as Exxon Mobil (NYSE:XOM) are likely to be found not only in a given fund company's energy sector
fund but its flagship large cap value fund as well. Therefore, sector funds that invest in a specific subsector, such as alternative energy sources, may provide greater diversification than a broader-based fund in some cases.
Average in Investors who add sector funds to their portfolios should also be aware that timing specific sectors of the market can be riskier and more difficult than trying to time the market as a whole. As mentioned previously, subsector funds are even more volatile by nature than broader-based funds, as their narrower focus will render them even more vulnerable to the economic cycles that can affect a specific industry, such as banking or mortgages.
Morningstar recommends that investors limit their exposure to any given sector to 5% of their portfolio. The use of such asset and sector allocation strategies as dollar-cost averaging or periodic portfolio rebalancing is also highly recommended. These methods can effectively reduce the volatility inherent in sector funds. However, sector funds in general tend to be appropriate for more aggressive investors seeking higher returns over time.
Perhaps most importantly, sector fund investors should be prepared to stay invested for at least 5-10 years, so that they can experience the entire cyclical rise and fall of the sector. Investors with time frames shorter than five years face substantial market risks.
Costs and Fees Sector fund investors should closely monitor what they pay in terms of sales charges and annual expenses for sector funds, which typically run higher than funds in more general categories. This is because sector funds (in any category) tend to lack the asset base that is found in mainstream funds, such as a flagship growth or income fund. As a result, they do not enjoy the subsequent economic scale pricing that larger funds can offer. dividends to conservati Investors who are participating in market-timing strategies would be wise to explore the world of sector spiders (SPDRs) and exchange-traded funds (ETFs) that are available, which provide similar diversification to mutual funds but trade like stocks, and can be purchased much more cheaply than traditional open-end funds. Many of these can also be shorted for those investors who use short sales as part of an overall hedging or investing strategy.
OBJECTIVES
1. PRIMARY OBJECTIVE 1. TO know about the current Mutual funds available in India
2. SECONDARY OBJECTIVE
1. sector 2.
TO know how mutual funds are investing the funds in different
Giving better suggestions to the investor to invest in good sectors
and now good scope is there for mutual funds in India 3. To suggest the investor about which mutual fund should be invest
in better sector 4. 5. To study the benefits of investing in different sector of funds To know how to invest in sectoral funds
CHAPTER-2
METHODLOGY A Research work requires a lot of information to be gathered. This information can be gathered through 2 sources. 1. Primary source of data collection: In this method, we collect the data
for the first time i.e., first hand information through surveys, observations etc., 2. Secondary source of data collection: In this method , we collect the
information which is readily available. The present project work is depending on secondary sources of information gathering. 1. DATA COLLECTION In the present project work the data as been collected from readily available source that is secondary data like websites newspapers and magazines the sample size taken for study 5 companies
THE WEB SITE VISITED 1. WWW.AMFI.COM. 2. MONEY.REDIFF.COM. 2. DATA ANALYSIS The present project work as been analyzed using time series analysis with graphical presentation the formula applied in the calculation or as follows FOR MUTUAL FUNDS NAV RETURNS 1. AVG RETURNS=ri/n
2. RISK RETURNS=
NEED AND SCOPE At the present trend in mutual funds investor are investing in different sectors .it is a good advantage for the investors and also benefit for the investors and investor can reduce risk in mutual fund. In the sectorial funds we have diversified companies and sectors funds of bank .the investor must choose and invest the funds in the different sectors and the companies the finance manager as to suggest the investor there is no relationship between the funds. You can invest in any funds Now a days good scope is their for the mutual funds .the financial managers as to decide whether he as to invest in share stock, bonds and sectors to get the more benefits for funds so invest in good profitability sector. Then the financial manager can reduce the risk from the investors. The scope of study is confirmed to the sectorial funds available in India mutual fund market
CHAPTER-3
LITERATURE SURVEY
UNDERSTANDING MUTUAL FUND Mutual fund is a trust that pools money from a group of investors (sharing common financial goals) and invest the money thus collected into asset classes that match the stated investment objectives of the scheme. Since the stated investment objectives of a mutual fund scheme generally form the basis for an investor's decision to contribute money to the pool, a mutual fund can not deviate from its stated objectives at any point of time.
Every Mutual Fund is managed by a fund manager, who using his investment management skills and necessary research works ensures much better return than what an investor can manage on his own. The capital appreciation and other incomes earned from
these investments are passed on to the investors (also known as unit holders) in proportion of the number of units they own.
When an investor subscribes for the units of a mutual fund, he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus (the total amount of the fund). Mutual Fund investor is also known as a mutual fund shareholder or a unit holder. Any change in the value of the investments made into capital market instruments (such as shares, debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. NAV is defined as the market value of the Mutual Fund scheme's assets net of its liabilities. NAV of a scheme is calculated by dividing the market value of scheme's assets by the total number of units issued to the investors.
For example: A. If the market value of the assets of a fund is Rs. 100,000 B. The total number of units issued to the investors is equal to 10,000. C. Then the NAV of this scheme = (A)/(B), i.e. 100,000/10,000 or 10.00 D. Now if an investor 'X' owns 5 units of this scheme E. Then his total contribution to the fund is Rs. 50 (i.e. Number of units held multiplied by the NAV of the scheme)
ADVANTAGES OF MUTUAL FUND S. Advantage No. Mutual Funds invest in a well-diversified portfolio of securities which Portfolio 1. Diversification amount of investment is big or small). Fund manager undergoes through various research works and has better Professional 2. Management than what he can manage on his own. Investors acquire a diversified portfolio of securities even with a small 3. Less Risk investment in a Mutual Fund. The risk in a diversified portfolio is lesser than investing in merely 2 or 3 securities. investment management skills which ensure higher returns to the investor enables investor to hold a diversified investment portfolio (whether the Particulars
Low Due to the economies of scale (benefits of larger volumes), mutual funds pay 4. Transaction lesser transaction costs. These benefits are passed on to the investors. Costs An investor may not be able to sell some of the shares held by him very 5. Liquidity easily and quickly, whereas units of a mutual fund are far more liquid. Mutual funds provide investors with various schemes with different Choice of 6. Schemes having a correlation between its investment objectives and their own financial goals. These schemes further have different plans/options Funds provide investors with updated information pertaining to the markets 7. Transparency and the schemes. All material facts are disclosed to investors as required by the regulator. Investors also benefit from the convenience and flexibility offered by Mutual Funds. Investors can switch their holdings from a debt scheme to an equity 8. Flexibility scheme and vice-versa. Option of systematic (at regular intervals) investment and withdrawal is also offered to the investors in most open-end schemes. Mutual Fund industry is part of a well-regulated investment environment 9. Safety where the interests of the investors are protected by the regulator. All funds are registered with SEBI and complete transparency is forced. investment objectives. Investors have the option of investing in a scheme
DISADVANTAGES OF MUTUAL FUND S. Disadvantage No. Particulars
Investor has to pay investment management Costs Control fees and fund distribution costs as a Not in the 1. Hands of an (as long as he holds the units), irrespective of Investor the performance of the fund. The portfolio of securities in which a fund invests is a decision taken by the fund manager. Investors have no right to interfere No Customized 2. Portfolios manager, which some investors find as a constraint in achieving their financial objectives. Many investors find it difficult to select one Difficulty in Selecting a 3. Suitable Fund may have to take advice from financial Scheme planners in order to invest in the right fund to achieve their objectives. TYPES OF MUTUAL FUNDS General Classification of Mutual Funds Open-end Funds | Closed-end Funds Open-end Funds Funds that can sell and purchase units at any point in time are classified as Open-end Funds. The fund size (corpus) of an open-end fund is variable (keeps changing) because of continuous selling (to investors) and repurchases (from the investors) by the fund. An open-end fund is not option from the plethora of funds/schemes/plans available. For this, they in the decision making process of a fund percentage of the value of his investments
required to keep selling new units to the investors at all times but is required to always repurchase, when an investor wants to sell his units. The NAV of an open-end fund is calculated every day.
Closed-end Funds Funds that can sell a fixed number of units only during the New Fund Offer (NFO) period are known as Closed-end Funds. The corpus of a Closed-end Fund remains unchanged at all times. After the closure of the offer, buying and redemption of units by the investors directly from the Funds is not allowed. However, to protect the interests of the investors, SEBI provides investors with two avenues to liquidate their positions: 1. Closed-end Funds are listed on the stock exchanges where investors can buy/sell units from/to each other. The trading is generally done at a discount to the NAV of the scheme. The NAV of a closed-end fund is computed on a weekly basis (updated every Thursday). 2. Closed-end Funds may also offer "buy-back of units" to the unit holders. In this case, the corpus of the Fund and its outstanding units do get changed. Load Funds | No-load Funds Load Funds Mutual Funds incur various expenses on marketing, distribution, advertising, portfolio churning, fund manager's salary etc. Many funds recover these expenses from the investors in the form of load. These funds are known as Load Funds. A load fund may impose following types of loads on the investors:
Entry Load - Also known as Front-end load, it refers to the load charged to an investor
at the time of his entry into a scheme. Entry load is deducted from the investor's contribution amount to the fund.
Exit Load - Also known as Back-end load, these charges are imposed on an investor when he redeems his units (exits from the scheme). Exit load is deducted from the redemption proceeds to an outgoing investor.
Deferred Load - Deferred load is charged to the scheme over a period of time. Contingent Deferred Sales Charge (CDSC) - In some schemes, the percentage of exit load reduces as the investor stays longer with the fund. This type of load is known as Contingent Deferred Sales Charge.
No-load Funds All those funds that do not charge any of the above mentioned loads are known as No-load Funds. Tax-exempt Funds | Non-Tax-exempt Funds Tax-exempt Funds Funds that invest in securities free from tax are known as Tax-exempt Funds. All open-end equity oriented funds are exempt from distribution tax (tax for distributing income to investors). Long term capital gains and dividend income in the hands of investors are tax-free.
Non-Tax-exempt Funds Funds that invest in taxable securities are known as Non-Tax-exempt Funds. In India, all funds, except open-end equity oriented funds are liable to pay tax on distribution income. Profits arising out of sale of units by an investor within 12 months of purchase are categorized as short-term capital gains, which are taxable. Sale of units of an equity oriented fund is subject to Securities
Transaction Tax (STT). STT is deducted from the redemption proceeds to an investor.
BROAD MUTUAL FUND TYPES
1. Equity Funds Equity funds are considered to be the more risky funds as compared to other fund types, but they also provide higher returns than other funds. It is advisable that an investor
looking to invest in an equity fund should invest for long term i.e. for 3 years or more. There are different types of equity funds each falling into different risk bracket. In the order of decreasing risk level, there are following types of equity funds:
a. Aggressive Growth Funds - In Aggressive Growth Funds, fund managers aspire for
maximum capital appreciation and invest in less researched shares of speculative nature. Because of these speculative investments Aggressive Growth Funds become more volatile and thus, are prone to higher risk than other equity funds.
b. Growth Funds - Growth Funds also invest for capital appreciation (with time horizon of
3 to 5 years) but they are different from Aggressive Growth Funds in the sense that they invest in companies that are expected to outperform the market in the future. Without entirely adopting speculative strategies, Growth Funds invest in those companies that are expected to post above average earnings in the future.
c. Speciality Funds - Speciality Funds have stated criteria for investments and their
portfolio comprises of only those companies that meet their criteria. Criteria for some speciality funds could be to invest/not to invest in particular regions/companies. Speciality funds are concentrated and thus, are comparatively riskier than diversified funds.. There are following types of speciality funds:
i.
Sector Funds: Equity funds that invest in a particular sector/industry of the market are known as Sector Funds. The exposure of these funds is limited to a particular sector (say Information Technology, Auto, Banking, Pharmaceuticals or Fast Moving Consumer Goods) which is why they are more risky than equity funds that invest in multiple sectors.
ii.
Foreign Securities Funds: Foreign Securities Equity Funds have the option to
invest in one or more foreign companies. Foreign securities funds achieve international diversification and hence they are less risky than sector funds. However, foreign securities funds are exposed to foreign exchange rate risk and country risk.
iii.
Mid-Cap or Small-Cap Funds: Funds that invest in companies having lower market capitalization than large capitalization companies are called Mid-Cap or Small-Cap Funds. Market capitalization of Mid-Cap companies is less than that of big, blue chip companies (less than Rs. 2500 crores but more than Rs. 500 crores) and Small-Cap companies have market capitalization of less than Rs. 500 crores. Market Capitalization of a company can be calculated by multiplying the market price of the company's share by the total number of its outstanding shares in the market. The shares of Mid-Cap or Small-Cap Companies are not as liquid as of Large-Cap Companies which gives rise to volatility in share prices of these companies and consequently, investment gets risky.
iv.
Option Income Funds*: While not yet available in India, Option Income Funds write options on a large fraction of their portfolio. Proper use of options can help to reduce volatility, which is otherwise considered as a risky instrument. These funds invest in big, high dividend yielding companies, and then sell options against their stock positions, which generate stable income for investors.
d.
e. Diversified Equity Funds - Except for a small portion of investment in liquid money
market, diversified equity funds invest mainly in equities without any concentration on a particular sector(s). These funds are well diversified and reduce sector-specific or
company-specific risk. However, like all other funds diversified equity funds too are exposed to equity market risk. One prominent type of diversified equity fund in India is Equity Linked Savings Schemes (ELSS). As per the mandate, a minimum of 90% of investments by ELSS should be in equities at all times. ELSS investors are eligible to claim deduction from taxable income (up to Rs 1 lakh) at the time of filing the income tax return. ELSS usually has a lock-in period and in case of any redemption by the investor before the expiry of the lock-in period makes him liable to pay income tax on such income(s) for which he may have received any tax exemption(s) in the past.
f. Equity Index Funds - Equity Index Funds have the objective to match the performance
of a specific stock market index. The portfolio of these funds comprises of the same companies that form the index and is constituted in the same proportion as the index. Equity index funds that follow broad indices (like S&P CNX Nifty, Sensex) are less risky than equity index funds that follow narrow sectoral indices (like BSEBANKEX or CNX Bank Index etc). Narrow indices are less diversified and therefore, are more risky.
g. Value Funds - Value Funds invest in those companies that have sound fundamentals and
whose share prices are currently under-valued. The portfolio of these funds comprises of shares that are trading at a low Price to Earning Ratio (Market Price per Share / Earning per Share) and a low Market to Book Value (Fundamental Value) Ratio. Value Funds may select companies from diversified sectors and are exposed to lower risk level as compared to growth funds or speciality funds. Value stocks are generally from cyclical industries (such as cement, steel, sugar etc.) which make them volatile in the short-term. Therefore, it is advisable to invest in Value funds with a long-term time horizon as risk in the long term, to a large extent, is reduced.
h. Equity Income or Dividend Yield Funds - The objective of Equity Income or Dividend
Yield Equity Funds is to generate high recurring income and steady capital appreciation for investors by investing in those companies which issue high dividends (such as Power or Utility companies whose share prices fluctuate comparatively lesser than other companies' share prices). Equity Income or Dividend Yield Equity Funds are generally exposed to the lowest risk level as compared to other equity funds. 2. Debt / Income Funds
Funds that invest in medium to long-term debt instruments issued by private companies, banks, financial institutions, governments and other entities belonging to various sectors (like infrastructure companies etc.) are known as Debt / Income Funds. Debt funds are low risk profile funds that seek to generate fixed current income (and not capital appreciation) to investors. In order to ensure regular income to investors, debt (or income) funds distribute large fraction of their surplus to investors. Although debt securities are generally less risky than equities, they are subject to credit risk (risk of default) by the issuer at the time of interest or principal payment. To minimize the risk of default, debt funds usually invest in securities from issuers who are rated by credit rating agencies and are considered to be of "Investment Grade". Debt funds that target high returns are more risky. Based on different investment objectives, there can be following types of debt funds:
a. Diversified Debt Funds - Debt funds that invest in all securities issued by entities
belonging to all sectors of the market are known as diversified debt funds. The best
feature of diversified debt funds is that investments are properly diversified into all sectors which results in risk reduction. Any loss incurred, on account of default by a debt issuer, is shared by all investors which further reduces risk for an individual investor.
b. Focused Debt Funds* - Unlike diversified debt funds, focused debt funds are narrow
focus funds that are confined to investments in selective debt securities, issued by companies of a specific sector or industry or origin. Some examples of focused debt funds are sector, specialized and offshore debt funds, funds that invest only in Tax Free Infrastructure or Municipal Bonds. Because of their narrow orientation, focused debt funds are more risky as compared to diversified debt funds. Although not yet available in India, these funds are conceivable and may be offered to investors very soon.
c. High Yield Debt funds - As we now understand that risk of default is present in all debt
funds, and therefore, debt funds generally try to minimize the risk of default by investing in securities issued by only those borrowers who are considered to be of "investment grade". But, High Yield Debt Funds adopt a different strategy and prefer securities issued by those issuers who are considered to be of "below investment grade". The motive behind adopting this sort of risky strategy is to earn higher interest returns from these issuers. These funds are more volatile and bear higher default risk, although they may earn at times higher returns for investors.
d. Assured Return Funds - Although it is not necessary that a fund will meet its objectives
or provide assured returns to investors, but there can be funds that come with a lock-in period and offer assurance of annual returns to investors during the lock-in period. Any shortfall in returns is suffered by the sponsors or the Asset Management Companies (AMCs). These funds are generally debt funds and provide investors with a low-risk
investment opportunity. However, the security of investments depends upon the net worth of the guarantor (whose name is specified in advance on the offer document). To safeguard the interests of investors, SEBI permits only those funds to offer assured return schemes whose sponsors have adequate net-worth to guarantee returns in the future. In the past, UTI had offered assured return schemes (i.e. Monthly Income Plans of UTI) that assured specified returns to investors in the future. UTI was not able to fulfill its promises and faced large shortfalls in returns. Eventually, government had to intervene and took over UTI's payment obligations on itself. Currently, no AMC in India offers assured return schemes to investors, though possible.
e. Fixed Term Plan Series - Fixed Term Plan Series usually are closed-end schemes having
short term maturity period (of less than one year) that offer a series of plans and issue units to investors at regular intervals. Unlike closed-end funds, fixed term plans are not listed on the exchanges. Fixed term plan series usually invest in debt / income schemes and target short-term investors. The objective of fixed term plan schemes is to gratify investors by generating some expected returns in a short period.
3. Gilt Funds Also known as Government Securities in India, Gilt Funds invest in government papers (named dated securities) having medium to long term maturity period. Issued by the Government of India, these investments have little credit risk (risk of default) and provide safety of principal to the investors. However, like all debt funds, gilt funds too are exposed to interest rate risk. Interest rates and prices of debt securities are inversely
related and any change in the interest rates results in a change in the NAV of debt/gilt funds in an opposite direction.
4. Money Market / Liquid Funds Money market / liquid funds invest in short-term (maturing within one year) interest bearing debt instruments. These securities are highly liquid and provide safety of investment, thus making money market / liquid funds the safest investment option when compared with other mutual fund types. However, even money market / liquid funds are exposed to the interest rate risk. The typical investment options for liquid funds include Treasury Bills (issued by governments), Commercial papers (issued by companies) and Certificates of Deposit (issued by banks).
5. Hybrid Funds As the name suggests, hybrid funds are those funds whose portfolio includes a blend of equities, debts and money market securities. Hybrid funds have an equal proportion of debt and equity in their portfolio. There are following types of hybrid funds in India:
a. Balanced Funds - The portfolio of balanced funds include assets like debt securities,
convertible securities, and equity and preference shares held in a relatively equal proportion. The objectives of balanced funds are to reward investors with a regular income, moderate capital appreciation and at the same time minimizing the risk of capital erosion. Balanced funds are appropriate for conservative investors having a long term investment horizon.
b. Growth-and-Income Funds - Funds that combine features of growth funds and income
funds are known as Growth-and-Income Funds. These funds invest in companies having potential for capital appreciation and those known for issuing high dividends. The level of risks involved in these funds is lower than growth funds and higher than income funds.
c. Asset Allocation Funds - Mutual funds may invest in financial assets like equity, debt,
money market or non-financial (physical) assets like real estate, commodities etc.. Asset allocation funds adopt a variable asset allocation strategy that allows fund managers to switch over from one asset class to another at any time depending upon their outlook for specific markets. In other words, fund managers may switch over to equity if they expect equity market to provide good returns and switch over to debt if they expect debt market to provide better returns. It should be noted that switching over from one asset class to another is a decision taken by the fund manager on the basis of his own judgment and understanding of specific markets, and therefore, the success of these funds depends upon the skill of a fund manager in anticipating market trends.
6. Commodity Funds Those funds that focus on investing in different commodities (like metals, food grains, crude oil etc.) or commodity companies or commodity futures contracts are termed as Commodity Funds. A commodity fund that invests in a single commodity or a group of commodities is a specialized commodity fund and a commodity fund that invests in all
available commodities is a diversified commodity fund and bears less risk than a specialized commodity fund. "Precious Metals Fund" and Gold Funds (that invest in gold, gold futures or shares of gold mines) are common examples of commodity funds.
7. Real Estate Funds Funds that invest directly in real estate or lend to real estate developers or invest in shares/securitized assets of housing finance companies, are known as Specialized Real Estate Funds. The objective of these funds may be to generate regular income for investors or capital appreciation.
8. Exchange Traded Funds (ETF) Exchange Traded Funds provide investors with combined benefits of a closed-end and an open-end mutual fund. Exchange Traded Funds follow stock market indices and are traded on stock exchanges like a single stock at index linked prices. The biggest advantage offered by these funds is that they offer diversification, flexibility of holding a single share (tradable at index linked prices) at the same time. Recently introduced in India, these funds are quite popular abroad.
9. Fund of Funds Mutual funds that do not invest in financial or physical assets, but do invest in other mutual fund schemes offered by different AMCs, are known as Fund of Funds. Fund of Funds maintain a portfolio comprising of units of other mutual fund schemes, just like conventional mutual funds maintain a portfolio comprising of equity/debt/money market
instruments or non financial assets. Fund of Funds provide investors with an added advantage of diversifying into different mutual fund schemes with even a small amount of investment, which further helps in diversification of risks. However, the expenses of Fund of Funds are quite high on account of compounding expenses of investments into different mutual fund schemes.
* Funds not yet available in India
Risk Heirarchy of Different Mutual Funds Thus, different mutual fund schemes are exposed to different levels of risk and investors should know the level of risks associated with these schemes before investing. The graphical representation hereunder provides a clearer picture of the relationship between mutual funds and levels of risk associated with these funds:
Closed-end fund A closed-end fund or closed-ended fund is a collective investment scheme with a limited number of shares. New shares are rarely issued after the fund is launched; shares are not normally redeemable for cash or securities until the fund liquidates. Typically an investor can acquire shares in a closed-end fund by buying shares on a secondary market from a
broker, market maker, or other investor as opposed to an open-end fund where all transactions eventually involve the fund company creating new shares on the fly (in exchange for either cash or securities) or redeeming shares (for cash or securities). The price of a share in a closed-end fund is determined partially by the value of the investments in the fund, and partially by the premium (or discount) placed on it by the market. The total value of all the securities in the fund divided by the number of shares in the fund is called the net asset value (NAV) per share. The market price of a fund share is often higher or lower than the per share NAV: when the fund's share price is higher than per share NAV it is said to be selling at a premium; when it is lower, at a discount to the per share NAV. In the U.S. legally they are called closed-end companies and form one of three SEC recognized types of investment companies along with mutuafunds and unit investment trusts. Other examples of closed-ended funds are Investment trusts in the UK and Listed investment companies in Australia
Open-end fund An open-end (end) fund is a collective investment scheme which can issue and redeem shares at any time. An investor will generally purchase shares in the fund directly from the fund itself rather than from the existing shareholders. It contrasts with a closed-end
fund, which typically issues the entire share it will issue at the outset, with such shares usually being tradable between investors thereafter. Open-ended funds are available in most developed countries, though terminology and operating rules vary. U.S. mutual funds, UK unit trusts and OEICs, European SICAVs, hedge funds and exchange-traded funds are all example of open-ended funds. The price at which shares in an open-ended fund are issued or can be redeemed will vary in proportion to the net asset value of the fund, and therefore directly reflects the fund's performance.
Exchange-traded fund An exchange-traded fund (or ETF) is an investment vehicle traded on stock exchanges, much like stocks. An ETF holds assets such as stocks or bonds and trades at approximately the same price as the net asset value of its underlying assets over the course of the trading day. Most ETFs track an index, such as the S&P 500 or MSCI EAFE. ETFs may be attractive as investments because of their low costs, tax efficiency, and stock-like features.[1][2] Only so-called authorized participants (typically, large institutional investors) actually buy or sell shares of an ETF directly from/to the fund manager, and then only in creation units, large blocks of tens of thousands of ETF shares, which are usually exchanged in-
kind with baskets of the underlying securities. Authorized participants may wish to invest in the ETF shares long-term, but usually act as market makers on the open market, using their ability to exchange creation units with their underlying securities to provide liquidity of the ETF shares and help ensure that their intraday market price approximates the net asset value of the underlying assets.[3] Other investors, such as individuals using a retail brokerage, trade ETF shares on this secondary market. An ETF combines the valuation feature of a mutual fund or unit investment trust, which can be purchased or redeemed at the end of each trading day for its net asset value, with the tradability feature of a closed-end fund, which trades throughout the trading day at prices that may be more or less than its net asset value. Closed-end funds are not considered to be exchange-traded funds, even though they are funds and are traded on an exchange. ETFs have been available in the US since 1993 and in Europe since 1999. ETFs traditionally have been index funds, but in 2008 the U.S. Securities and Exchange Commission began to authorize the creation of actively-managed ETFs.[3] Derivative A fund derivative is a financial structured product related to a fund, normally using the underlying fund to determine the payoff. This may be a mutual fund or a hedge fund. Purchasers might want exposure to a fund to get exposure to a star fund manager or management style as well as the asset class. Typical fund derivatives might be a call option on a fund, a CPPI on a fund, or a leveraged note on a fund. More complicated structures might be a guarantee sold to a
fund that ensures it cannot fall in value by more than a certain amount. Maturities might range from three to ten years. The big players in this field are BNP Paribas, Society General, Barclays, Deutsche Bank, Citigroup, Credit Suisse, etc. Fund derivatives have had explosive growth over the past 10 years but are still a major growth area. New structures are constantly being developed to suit market and client opportunities.
Index fund An index fund or index tracker is a collective investment scheme (usually a mutual fund or exchange-traded fund) that aims to replicate the movements of an index of a specific financial market, or a set of rules of ownership that are held constant, regardless of market conditions. Tracking can be achieved by trying to hold all of the securities in the index, in the same proportions as the index. Other methods include statistically sampling the market and holding "representative" securities. Many index funds rely on a computer model with little or no human input in the decision as to which securities are purchased or sold and is therefore a form of passive management. The lack of active management generally gives the advantage of lower fees and lower taxes in taxable accounts. Of course, the fees reduce the return to the investor relative to
the index. In addition it is usually impossible to precisely mirror the index as the models for sampling and mirroring, by their nature, cannot be 100% accurate. The difference between the index performance and the fund performance is known as the 'tracking error' or informally 'jitter'. Index funds are available from many investment managers. Some common indices include the Standard & Poor's 500, the Dow Jones Industrial Average the Wilshire 5000, the FTSE 100. Less common indexes come from academics like Eugene Fama and Kenneth French, who created "research indexes" in order to develop asset pricing models, such as their Three Factor Model. The Fama French Three Factor model is used by Dimensional Fund Advisors to design their index funds. Robert Arnott and Professor Jeremy Siegel have also created new competing fundamentally based indexes based on such criteria as dividends, earnings, book value, and sales.
Investment management Investment management is the professional management of various securities (shares, bonds etc.) and assets (e.g., real estate), to meet specified investment goals for the benefit
of the investors. Investors may be institutions (insurance companies, pension funds, corporations etc.) or private investors (both directly via investment contracts and more commonly via collective investment schemes e.g. mutual funds or Exchange Traded Funds) . The term asset management is often used to refer to the investment management of collective investments, (not necessarily) whilst the more generic fund management may refer to all forms of institutional investment as well as investment management for private investors. Investment managers who specialize in advisory or discretionary management on behalf of (normally wealthy) private investors may often refer to their services as wealth management or portfolio management often within the context of so-called "private banking". The provision of 'investment management services' includes elements of financial analysis, asset selection, stock selection, plan implementation and ongoing monitoring of investments. Investment management is a large and important global industry in its own right responsible for caretaking of trillions of dollars, euro, pounds and yen. Coming under the remit of financial services many of the world's largest companies are at least in part investment managers and employ millions of staff and create billions in revenue. Fund manager (or investment adviser in the U.S.) refers to both a firm that provides investment management services and an individual who directs fund management decisions. Global assets under management
Global asset allocation or Global assets under management consists of pension funds, insurance companies and mutual funds. Other funds under management include private wealth and alternative assets such as hedge funds and private equity. Institutional clients generate the majority of funds. Assets of the global fund management industry increased 14% in 2007 and doubled from 2002, to reach a record $74.3 trillion [1]. Growth in recent years has largely been due to rising net flow of investment and strong performance of equity markets. Part of the reason for the increase, in dollar terms, has also been the decline in the value of the dollar against a number of currencies.
Separately managed account A Separately Managed Account, or SMA, is an individual investment account offered typically by a brokerage firm through one of their brokers or financial consultants and managed by independent investment management firms (often called money managers for short) and have varying fee structures. With such a broad definition, many types of accounts might fit the definition of an SMA. There is no official designation for the SMA but there are common characteristics that are represented in all SMA programs. These characteristics include an open structure or flexible investment security choices; multiple
money managers; and a customized investment portfolio formulated for a client's specific investment objectives or desired restrictions. The term "SMA" is used mostly in the U.S. brokerage industry for these types of arrangements whereby an account is managed by portfolio management resources within the firm, or more commonly, by an outside money management (investment advisory) firm along with an administrator. A similar type of account or arrangement is termed a "separately managed account", "separate account", or "private account" when opened directly with a money management firm such as Janus Capital Group, Ariel Investments, LLC, American Century Investments, T. Rowe Price, and so forth. These are examples of investment management firms, which are not brokerage firms. The term "separate account" in this context should not be confused with separate account of an insurance company. SMAs were developed in the 1970s to accommodate accounts and clients who needed to meet specific objectives, which did not fit within the constrictions of a mutual fund investment. It is the freedom of choice of professional managers, portfolio customization, objective investment advice for a set fee, diversification (or concentration should the client choose) tax efficiency and general flexibility that have made SMAs popular among informed investors. Some people question if SMAs actually provide significant advantages in terms of risk/return over more typical portfolios. There is no clear answer, and without comprehensive data, any evidence is largely anecdotal.
SMAs also enjoy some popularity among wealthier investors and their financial advisers as they are seen as exclusive, and offer investment options not available to those of more modest means. According to the State of the Financial Advisory Industry: 2008 report, SMAs are popular picks among advisers at national broker/dealers and wealth managers. Advisers at national broker/dealers and wealth managers (defined as any financial adviser with a client asset minimum of $2 million or above) made much more aggressive allocations to SMAs than the average. The national broker/dealers allocated 29 percent to separately managed accounts, with 17 percent to mutual funds; wealth managers allocated 18 percent to separately managed accounts and 28 percent to mutual funds.
[1]
The financial scandals and market declines that occurred in 2008 have served as a catalyst for hedge fund investors to migrate towards SMAs [2]. As such, the SMA is evolving to accommodate expected investor demand into such structures. The Unified Master Account is an example of an improvement on the SMA structure as it can accommodate multiple managers and strategies and is more efficient from a capital and operational perspective.
Socially-responsible investing; Socially responsible investing, also known as sustainable investing, socially-conscious or ethical investing, describes an investment strategy which seeks to maximize both financial return and social good.
In general, socially responsible investors favor corporate practices that promote environmental stewardship, consumer protection, human rights, and diversity. Some (but not all) avoid businesses involved in alcohol, tobacco, gambling, weapons, the military, and/or abortion. Unit trust A unit trust is a form of collective investment constituted under a trust deed. Found in Australia, Ireland, the Isle of Man, Jersey, New Zealand, South Africa, Singapore[1], and the UK, unit trusts offer access to a wide range of securities. Unit trusts are open-ended investments; therefore the underlying value of the assets is always directly represented by the total number of units issued multiplied by the unit price less the transaction or management fee charged and any other associated costs. Each fund has a specified investment objective to determine the management aims and limitations.
CHAPTER-4
INDUSTRY PROFILE
INDUSTRY OVERVIEW The securities market achieves one of the most important functions of channeling idle resources to productive resources or from less productive resources to more productive resources. Hence in the broader context the people who save and investors who invest focus more towards the economys abilities to invest and save respectively. This enhances savings and investments in the economy, the two pillars for economic growth. The Indian Capital Market has come a long way in this process and with a strong regulator it has been able to usher an era of a modern capital market regime. The past decade in many ways has been remarkable for securities market in India. It has grown exponentially as measured in terms of amount raised from the market, the number of listed stocks, market capitalization, trading volumes and turnover on stock exchanges,
and investor population. The market has witnessed fundamental institutional changes resulting in drastic reduction in transaction costs and significant improvements in efficiency, transparency and safety.
Stock Exchange: A stock exchange, share market or bourse is a corporation or mutual organization which provides facilities for stock brokers and traders, to trade company stocks and other securities. Stock exchanges also provide facilities for the issue and redemption of securities, as well as, other financial instruments and capital events including the payment of income and dividends. The securities traded on a stock exchange include: shares issued by companies, unit trusts and other pooled investment products and bonds. To be able to trade a security on a certain stock exchange, it has to be listed there. Usually there is a central location at least for recordkeeping, but trade is less and less linked to such a physical place, as modern markets are electronic networks, which gives them advantages of speed and cost of transactions. Trade on an exchange is by members only. The initial offering of stocks and bonds to investors is by definition done in the primary market and subsequent trading is done in the secondary market. A stock exchange is often the most important component of a stock market. Supply and demand in stock a market is driven by various factors which, as in all free markets, affect the price of stocks (see stock valuation). There is usually no compulsion to issue stock via the stock exchange itself, nor must stock be subsequently traded on the exchange. Such trading is said to be off exchange or over-the-counter. This is the usual way that bonds are traded. Increasingly, stock exchanges are part of a global market for securities. History of stock exchanges: In 12th century France the courratiers de change were concerned with managing and regulating the debts of agricultural communities on behalf of the banks. As these men also traded in debts, they could be called the first brokers. Some stories suggest that the origins of the term "bourse" come from
A STUDY ON MUTUAL FUNDS the Latin bursa meaning a bag because, in 13th century Bruges, the sign of a purse (or perhaps three purses), hung on the front of the house where merchants met. However, it is more likely that in the late 13th century commodity traders in Bruges gathered inside the house of a man called Van der Burse, and in 1309 they institutionalized this until now informal meeting and became the "Bruges Bourse". The idea spread quickly around Flanders and neighboring counties and "Bourses" soon opened in Ghent and Amsterdam. In the middle of the 13th century, Venetian bankers began to trade in government securities. In 1351, the Venetian Government outlawed spreading rumors intended to lower the price of government funds. There were people in Pisa, Verona, Genoa and Florence who also began trading in government securities during the 14th century. This was only possible because these were independent city states ruled by a council of Influential citizens, not by a duke. The Dutch later started joint stock companies, which let shareholders invest in business ventures and get a share of their profits - or losses. In 1602, the Dutch East India Company issued the first shares on the Amsterdam Stock Exchange. It was the first company to issue stocks and bonds. In 1688, the trading of stocks began on a stock exchange in London. Stock Exchange
The role of stock exchanges: Stock exchanges have multiple roles in the economy, this may include the following: Raising
capital for businesses
The Stock Exchange provides companies with the facility to raise capital for expansion through selling shares to the investing public.
Mobilizing savings for investment
When people draw their savings and invest in shares, it leads to a more
A STUDY ON MUTUAL FUNDS rational allocation of resources because funds, which could have been consumed, or kept in idle deposits with banks, are mobilized and redirected to promote business activity with benefits for several economic sectors such as agriculture, commerce and industry, resulting in a stronger economic growth and higher productivity levels.
Facilitating company growth
Companies view acquisitions as an opportunity to expand product lines, increase distribution channels, hedge against volatility, increase its market share, or acquire other necessary business assets. A takeover bid or a merger agreement through the stock exchange is one of the simplest and most common ways for a company to grow by acquisition or fusion.
Redistribution of wealth
Stocks exchanges do not exist to redistribute wealth although casual and professional stock investors through stock prices increases (that may result in capital gains for the Investor) and dividends get a chance to share in the wealth of profitable businesses.
Corporate governance
By having a wide and varied scope of owners, companies generally tend to improve on their management standards and efficiency in order to satisfy the demands of these shareholders and the more stringent rules for public corporations imposed by public stock exchanges and the government. Consequently, it is alleged that public companies (companies that are owned by shareholders who are members of the general public and trade shares on public exchanges) tend to have better management records than privately held companies (those companies where shares are not publicly traded, often owned by the company founders and/or their families and heirs, or otherwise by a small group of investors). However, some well-documented cases are known where it is alleged that there has been considerable slippage in corporate governance on the part of some public companies (pets.com (2000), Enron corporation (2001), One.tel (2001), Sunbeam (2001), Webvan
A STUDY ON MUTUAL FUNDS (2001), Adelphia (2002), Mci world com (2002), or paramalat(2003), are among the most widely scrutinized by the media).
Creating investment opportunities for small
investors
As opposed to other businesses that require huge capital outlay, investing in shares is open to both the large and small stock investors because a person buys the number of shares they can afford. Therefore the Stock Exchange provides the opportunity for small investors to own shares of the same companies as large investors.
Government capital-raising for development
projects
Governments at various levels may decide to borrow money in order to finance infrastructure projects such as sewage and water treatment works or housing estates by selling another category of securities known as bonds. These bonds can be raised through the Stock Exchange whereby members of the public buy them, thus loaning money to the government. The issuance of such municipal bonds can obviate the need to directly tax the citizens in order to finance development, although by securing such bonds with the full faith and credit of the government instead of with collateral, the result is that the Government must tax the citizens or otherwise raise additional funds to make any regular coupon payments and refund the principal when the bonds mature.
Barometer of the economy
At the stock exchange, share prices rise and fall depending, largely, on market forces. Share prices tend to rise or remain stable when companies and the economy in general show signs of stability and growth. An economic recession, depression, or financial crisis could eventually lead to a stock market crash. Therefore the movement of share prices and in general of the stock indexes can be an indicator of the general trend in the economy.
Major stock exchanges:

Twenty Largest Stock Exchanges by Market Capitalization as of July 12, 2007 (in trillions of US dollars) NYSE Euro next Tokyo Stock Exchange NASDAQ London Stock Exchange Hong Kong Stock Exchange Toronto Stock Exchange Frankfurt Stock Exchange (Deutsche Brose) Shanghai Stock Exchange Madrid Stock Exchange (BME Spanish Exchanges) Australian Securities Exchange Swiss Exchange Nordic Stock Exchange Group OMX (Copenhagen, Helsinki,
Iceland, Stockholm, Tallinn, Riga and Vilnius Stock Exchanges) Milan Stock Exchange (Boras Italian) Bombay Stock Exchange Korea Exchange Sao Paulo Stock Exchange Bovespa National Stock Exchange of India Moscow Interbank Currency Exchange Johannesburg Securities Exchange Taiwan Stock Exchange
STOCK EXCHANGE & SHARES

The market or place, where securities, viz. shares are exchange / traded or simply where buying and selling takes place, is called stock exchange or stock market. Presently, the stock market in India consists of twenty three regional stock exchanges and two national exchanges, namely, the National Stock Exchange (NSE) And Over the Counter Exchange of India (OTC). The Bombay Stock Exchange (BSE) is the largest Stock Exchange, in the country, where maximum transactions, in terms of money and shares take place. The other major stock exchanges are Calcutta, Madras and Delhi Stock Exchanges. Other one at Ahmedabad, Jaipur, Bangalore, Kanpur, Rajkot, Surat. Hyderabad, Cochin, Pune, Bhubaneshwar, Guwahti, Indore, Mangalore, Ludhiana, Patna, Saurashtra, Vadodara, Coimbatore, Meerut, and
FUNCTIONING OF STOCK EXCHANGE: LISTING:

Listing of shares, on a stock exchange, means, such shares can be bought and sold, in stock exchange. A Company, which intends to issue shares, through prospectus, shall have to apply to one or more stock exchanges, for getting its shares listed. The detailed and elaborate procedure of getting the shares listed on a stock exchange is monitored by SEBI. The SEBI, issues guidelines and notifications, from time to time, with regard to listing of securities. Once the shares are listed, they are divided into two categories: 1. GROUP A SHARES 1. GROUP "B" SHARES are referred to as Cleaned Securities or
GROUP "A" SHARES:
specified shares". The facility for carrying forward a transaction from one account period to another is available for these shares. Group "A" shares
A STUDY ON MUTUAL FUNDS represent companies, with huge amount of capital, and equally a large scope for investment. These shares are frequently traded and command higher price earnings multiples.
GROUP "B" SHARES:

available.
are referred to as, none cleaned securities or
non-specified shares. For these groups facility of carrying forward is not
Whenever a share is moved from Group "B" to Group "An" its market price rises; likewise, when a share is shifted from Group "A" to Group "B", its market price declines. There are some criteria and guide lines, laid down by stock exchange, for shifting stocks from the non-specified list to the specified list.
PRIMARY MARKET
Since 1991/92, the primary market has grown fast as a result of the removal of investment restrictions in the overall economy and a repeal of the restrictions imposed by the Capital Issues Control Act. In 1991/92, Rs62.15 billion was raised in the primary market. This figure rose to Rs276.21 billion in 1994/95. Since 1995/1996, however, smaller amounts have been raised due to the overall downtrend in the market and tighter entry barriers introduced by SEBI for investor protection .SEBI has taken several measures to improve the integrity of the secondary market. Legislative and regulatory changes have facilitated the corporatization of stockbrokers. Capital adequacy norms have been prescribed and are being enforced. A mark-tomarket margin and intraday trading limit have also been imposed. Further, the stock exchanges have put in place circuit breakers, which are applied in times of excessive volatility. The disclosure of short sales and long purchases is now required at the end of the day to reduce price volatility and further enhance the integrity of the secondary market. The primary is that part of the capital markets that deals with the issuance of new securities. Companies, governments or public sector institutions can obtain funding through the sale of a new stock or bond issue. This is typically done through a syndicate of securities dealers. The process of selling new
A STUDY ON MUTUAL FUNDS issues to investors is called underwriting. In the case of a new stock issue, this sale is an initial public offering (IPO). Dealers earn a commission that is built into the price of the security offering, though it can be found in the prospectus.
FEATURES OF PRIMARY MARKET ARE:-
1. This is the market for new long term capital. The primary market is the market where the securities are sold for the first time. Therefore it is also called New Issue Market (NIM). 2. In a primary issue, the securities are issued by the company directly to investors. 3. The company receives the money and issue new security certificates to the investors 4. Primary issues are used by companies for the purpose of setting up new business or for expanding or modernizing the existing business. 5. The primary market performs the crucial function of facilitating capital formation in the economy.
6. The new issue market does not include certain other sources of new long term external finance, such as loans from financial institutions. Borrowers in the new issue market may be raising capital for converting private capital into public capital; this is known as going public.
Methods of issuing securities in the Primary Market 1. Initial Public Offer; 2. Rights Issue (For existing Companies); and 3. Preferential Issue
Secondary market:
The secondary market is the financial market for trading of securities that have already been issued in an initial private or public offering. [1] Alternatively, secondary market can refer to the market for any kind of used goods. The market that exists in a new security just after the new issue, is often referred to as the aftermarket. Once a newly issued stock is listed on a stock exchange, investors and speculators can easily trade on the exchange, as market makers provide bids and offers in the new stock.
Function
In the secondary market, securities are sold by and transferred from one investor or speculator to another. It is therefore important that the secondary market be highly liquid (Originally, the only way to create this liquidity was for investors and speculators to meet at a fixed place regularly. This is how stock exchanges originated; see History of the Stock Exchange). Secondary marketing is vital to an efficient and modern capital market. Fundamentally, secondary markets mesh the investor's preference for liquidity (i.e., the investor's desire not to tie up his or her money for a long period of time, in case the investor needs it to deal with unforeseen circumstances) with the capital user's preference to be able to use the capital for an extended period of time. For example, a traditional loan allows the borrower to pay back the loan, with interest, over a certain period. For the length of that period of time, the bulk of the lender's investment is inaccessible to the lender, even in cases of emergencies. Likewise, in an emergency, a partner in a traditional partnership is only able to access his or her original investment if he or she finds another investor willing to buy out his or her interest in the partnership. With a securitized loan or equity interest (such as bonds) or tradable stocks, the investor can sell, relatively easily, his or her interest in the investment, particularly if the loan or
A STUDY ON MUTUAL FUNDS ownership equity has been broken into relatively small parts. This selling and buying of small parts of a larger loan or ownership interest in a venture is called secondary market trading. Under traditional lending and partnership arrangements, investors may be less likely to put their money into long-term investments, and more likely to charge a higher interest rate (or demand a greater share of the profits) if they do. With secondary markets, however, investors know that they can recoup some of their investment quickly, if their own circumstances change.
Private equity secondary market

In finance, the private equity secondary market (also often called private equity secondary or secondary) refers to the buying and selling of pre-existing investor commitments to private equity and other alternative investment funds. Sellers of private equity investments sell not only the investments in the fund but also their remaining unfunded commitments to the funds. By its nature, the private equity asset class is illiquid, intended to be a long-term investment for buy-and-hold investors. For the vast majority of private equity investments, there is no listed public market; however there is a robust and maturing secondary market available for sellers of private equity assets. Driven by strong demand for private equity exposure, a significant amount of capital has been committed to dedicated secondary market funds from investors looking to increase and diversify their private equity exposure
Laws governing capital market The four main legislations governing the securities market are: (a) The SEBI Act, 1992 which establishes SEBI to protect investors and develop and Regulate the Markets.
(b) The Companies Act, 1956, which sets out the code of conduct for the corporate sector in relation to issue, allotment and transfer of securities, and disclosures to be made in public issues. (c) The Securities Contracts (Regulation) Act, 1956, read with the Securities Contracts (Regulation) Rules, 1957 which provide for regulation of transactions in securities through control over stock exchanges; and (d) The Depositories Act, 1996 which provides for electronic maintenance and transfer of ownership of Demat securities. Regulators SEBI is the primary regulator of the Securities Market and the entities operating therein. The SEBI Act and the Depositories Act are mostly administered by SEBI. The rules under the securities laws are framed by government and regulations by SEBI. All these are administered by SEBI. The powers under the Companies Act relating to issue and transfer of securities and non-payment of dividend are administered by SEBI in case of listed public companies and public companies proposing to get their securities listed
Market Value The current quoted price at which investors buy or sell a share of common stock or a bond at a given time. Also known as "market price The market capitalization plus the market value of debt. Sometimes referred to as "total market value". In the context of securities, market value is often different from book value because the market takes into account future growth potential. Most investors who use fundamental analysis to pick stocks look at a company's market value and then determine whether or not the market value is adequate or if it's undervalued in comparison to its book value, net assets or some other measure. Stock
A type of security that signifies ownership in a corporation and represents a Claim on part of the corporations assets and earnings. There are two main types of stock: common and preferred. Common stock usually entitles the owner to vote at shareholders'
meetings and to receive dividends. Preferred stock generally does not have voting rights, but has a higher claim on assets and earnings than the common shares. For example, owners of preferred stock receive dividends before common shareholders and have priority in the event that a company goes. Bankrupt and is liquidated. Also known as "shares" or "equity".
A holder of stock (a shareholder) has a claim to a part of the corporation's assets and earnings. In other words, a shareholder is an owner of a company. Ownership is determined by the number of shares a person owns relative to the number of outstanding shares. For example, if a company has 1,000 shares of stock outstanding and one person owns 100 shares, that person would own and have. Claim to 10% of the companys assets Stocks are the foundation of nearly every portfolio. Historically, they have outperformed most other investments over the long run. Shareholder Any person, company, or other institution that 3 own at least 1 share in a company. A shareholder may also be referred to as a stockholder.
Shareholders are the owners of a company. They have the potential to profit if the company does well, but that comes with the potential to lose if the company does poorly.
Share A unit of ownership interest in a corporation or financial asset. While owning shares in a business does not mean that the shareholder has direct control over the business's day-to-day operations, being a shareholder does entitle the possessor to an equal distribution in any profits, if any are declared in the form of dividends. The two main types of shares are common shares and preferred shares.
In the past, shareholders received a physical paper stock certificate that indicated that they owned "x" shares in a company. Today, brokerages have electronic records that show ownership details. Owning a paperless share makes conducting trades a simpler and
more streamlined process, which is a far cry from the days were stock certificates needed to be taken to a. Brokerage before a trade could be conducted. While shares are often used to refer to the stock of a corporation, shares can also represent ownership of other classes of financial assets, such as mutual funds.
BSE INDICES:INDEX: An Index is used to summarize the price movements of a unique set of goods in the financial, commodity, forex or any other market place. Financial indices are created to measure price movements of stocks, bonds, T-bills and other type of financial securities. More specifically, a stock index is created to provide investors with the information regarding the average share price in the stock market. Broad indices are expected to capture the overall behavior of equity market and need to represent the return obtained by typical portfolios in the country SENSEX: SENSEX is India's first Index compiled in 1986. It is a basket of 30 constituent stocks representing a sample of large, liquid and representative companies. The base year of BSE-SENSEX is 1978-79 and the base value is 100. The index is widely reported in both domestic and international markets through print as well as electronic media. Due to its wide acceptance amongst the investors, SENSEX is regarded to be the pulse of the Indian stock market. All leading business newspapers and the business channels report SENSEX, as it is the language that all investors understand. As the oldest index in the country, it provides the time series data over a fairly long period of time (from 1979 onwards) to be used for various research purposes. The Index Cell of the exchange is responsible for the day-to-day maintenance of the index within the broad index policy set by the Index Committee. The Index Cell ensures that the SENSEX and all other BSE indices maintain their benchmark properties by striking a
delicate balance between frequent replacements in index and maintaining its historical continuity. SENSEX is calculated using a market capitalization weighted method. As per this methodology, the level of the index reflects the total market value of all 30- component stocks from different industries related to particular base period. The total market value of a company is determined by multiplying the price of the stock by the number of shares outstanding Statisticians call the index of a set of combined variables (such as price and No. of shares) a composite index. An indexed number is used to represent the results of this calculation in order to make the value easier to work with and track over a time. It is much easier to graph a chart based on indexed values than one used on actual values. World over majority of the well known indices are constructed using Market Capitalization Weighted Method. In practice, the daily calculation of SENSEX is done by dividing the aggregate market value of the 30 Companies in the index by a number called the Index Divisor. The Divisor is the only link to the original based period value of the SENSEX. The Divisor keeps the Index comparable over a period of time and the reference point for the entire index maintenance adjustments. SENSEX is widely used to describe the mood in the Indian Stock Markets.
COMPANY PROFILE
THE NETWORTH STORY

Ever since its inception in 1993, Networth Stock Broking Limited (NSBL) has sought t provide premium financial services and information, so that the power of investment is vested with the client. We equip those who invest with us to make intelligent investment decisions, providing them with the
A STUDY ON MUTUAL FUNDS flexibility to either tap into our extensive knowledge and expertise or make their own decisions. NSBL made its debut into the financial world by servicing Institutional clients, and proved its high scalability of operations by growing exponentially over a short period of time. Now, powered by a top-notch research team and a network of experts, we provide an array of retail broking services spanning entire India. Our strong support, technology-driven operations and business units of research, distribution and advisory coalesce to provide you with a one-stop solution to cater to all your broking and investment needs. NSBL is a member of the National Stock Exchange of India Ltd (NSE) and the Bombay Stock Exchange Ltd (BSE) in the Capital Market and Derivatives (Futures & Options) segment. We are Depository participants with Central Depository Services India (CDSL) and National Securities Depository (India) Limited (NSDL). Our customers have been participating in the booming commodities market with our membership at the Multi Commodity Exchange of India (MCX) and National Commodity & Derivatives Exchange (NCDEX) through Networth Stock.Com Ltd. NETWORTH TEAM EXPERTS
Owing to the vision and expertise of our team of experts, Networth has established itself As one of the premier financial services organization in India. Networth professionals form the backbone of the organization, pooling together their expertise from top financial service and broking houses. A strong team of professional, experienced and qualified human resources drawn from top financial service & broking houses form the back bone of our sizeable infrastructure. High technology orientation, the company's scalability of operations and the highest
Level of service standards has ensured rapid growth in the number of locations & the Clients serviced in a very short span of time.
S.P. Jain
Chairman
The primary force behind listing of Networth Stock Broking Ltd., and one of Networth's founder members, S.P. Jain has propelled the company forward from its very origins. With over 14 years of experience in the Capital market and Financial services, he is at the helm of NSBL, working closely with the research division and guiding the Organization to the forefront of financial services in India.
Sathyan Rajan
Managing Director With over a decade in the industry and experience in various capacities, Mr. Sathyan Rajan brings to NSBL, insights from the length and breath of the financial sector. He has previously worked with Karvy Stock Broking Ltd., one of the largest retail networks in the country, and was responsible for establishing the companys overseas network. His transition from research to sales marked a significant step in his career.
Girish V. Dev
CEO Over the span of 14 years, Mr. Girish Dev has acquired an in-depth knowledge of the Capital and Commodities Market. His experience covers a wide spectrum, ranging from Arbitrage & Client dealing across several exchanges and client categories to setting up operations, including those of a Foreign Brokerage and one of the first major e-broking ventures in the country. He has led the entire operations of full-scale financial services
A STUDY ON MUTUAL FUNDS intermediaries including compliance, e-business, distribution of non-equity products and book-building IPO activities, and has majorly contributed in developing a technology-sustained infrastructure that supports a range of financial products & services
Raj Bhandari
Director & Head Dealing Mr. Raj Bhandari heads Institutional Broking Division, and has over 8 years of Capital Market experience at NSBL. His expertise includes dealing and servicing the institutional and retail segments
Satish Pasari
Country Head Distribution and Advisory From a career in consumer durables (with four years of experience in Videocon International) to comprehensive knowledge and experience in the equity markets, Mr. Satish Pasari has acquired varied experience across sectors. Over the span of 11 years, Mr. Pasari has handled distribution of financial services in retai , HNI and institutional segments. He has previously worked with Karvy Stock Broking Ltd.
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Vice President & Southern Region Head Mr. J. Gopals 15 years of Capital Market experience is replete with the distinguished leadership roles he has played in the organizations he was involved with. At Anush Shares & Securities Pvt. Ltd., where he served for 12 years, he was the Head of Operations. He has also headed the finance, trading & settlement operations at Karvy Stock Broking Ltd., where he worked for 3 years
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CHAPTER-5 DATA COLLECTION
Date 29/01/201 0 28/01/201 0
NAV (Rs.) 10.81 10.83
return
avg A 0.038 93 0.038 93 0.038 93 0.038 93 0.038 93 0.038 93 0.038 93 0.038 93 0.038 93 0.038 93 0.038 93 0.038 93 0.038 93 0.038 93 0.038 93 0.038 93 0.038 93 0.038 93 0.038 93
diff
d*d
27/01/201 0
10.82
25/01/201 0
10.79
22/01/201 0
10.78
0.1850 14 0.0923 4 0.2772 6 0.0926 8 0.1855 29 0.3703 7 0 0.0929 4 0.1860 5 0.0931 97 0.3724 4 0.0934 6 0.1870 91 0 0.1867 4 0.1870 91 0
STUDY ON MUTUAL FUNDS 0.2239 0.0501 44 51 0.0534 0.0028 1 52 0.2383 0.0568 3 03 0.0537 0.0028 5 89 0.2244 59 0.3314 4 0.0389 3 0.0540 1 0.1471 2 0.1321 27 0.3335 1 0.0545 3 0.2260 21 0.0389 3 0.1478 1 0.2260 21 0.0389 3 0.1323 01 0.1322 14 -2.6E0.0503 82 0.1098 53 0.0015 16 0.0029 17 0.0216 43 0.0174 57 0.1112 29 0.0029 73 0.0510 85 0.0015 16 0.0218 48 0.0510 85 0.0015 16 0.0175 03 0.0174 8
21/01/201 0
10.8
20/01/201 0
10.76
19/01/201 0
10.76
18/01/201 0
10.75
15/01/201 0
10.73
14/01/201 0
10.74
13/01/201 0
10.7
12/1/2010
10.69
11/1/2010
10.71
8/1/2010
10.71
7/1/2010
10.69
6/1/2010
10.71
5/1/2010
10.71
4/1/2010
10.72
0.0933 71 0.0932 84
1/1/2010
10.73
A STUDY ON MUTUAL FUNDS Average return=0.03893 Risk=D*D/(n-1) =0.592698/(19-1) =0.1815 INTER PRITATION; The above Table shows risk and returns of Sahara company. The avg return is 0.03893 and risk is 0.1815. The company has the highest =10.83 price of NAV. And lowest price is 10.7
Statement of mutualfunds of SBI

D N
return
avg
diff
d*d
DATE
Date 29/01/201 0 28/01/201 0
NAV
V (Rs.) 10.22 10.2
27/01/201 0 25/01/201 0 22/01/201 0 21/01/201 0 20/01/201 0 19/01/201 0 18/01/201 0 15/01/201 0
10.14
10.47 10.55 10.68 10.94
10.93
11.06
10.97
14/01/201 0
10.95
13/01/201 0
10.88
12/1/2010
10.83
11/1/2010
10.93
8/1/2010
10.85
0.1956 9 0.5882 4 3.2544 38 0.7640 88 1.2322 27 2.4344 57 0.0914 1 1.1893 87 0.8137 4 0.1823 2 0.6392 7 0.4595 6 0.9233 61 0.7319 3 0.2764 98 0
0.3802 48 0.3802 48 0.3802 48 0.3802 48 0.3802 48 0.3802 48 0.3802 48 0.3802 48 0.3802 48 0.3802 48 0.3802 48 0.3802 48 0.3802 48 0.3802 48 0.3802 48 0.3802 48 0.3802 48
7/1/2010
10.88
6/1/2010
10.88
5/1/2010
10.89
0.0919 12
0.5759 4 0.9684 8 2.8741 9 0.3838 4 0.8519 79 2.0542 09 0.4716 6 0.8091 39 1.1939 9 0.5625 6 1.0195 2 0.8398 1 0.5431 13 1.1121 8 0.1037 5 0.3802 5 0.2883 4
0.3317 1 0.9379 6 8.2609 67 0.1473 33 0.7258 69 4.2197 74 0.2224 59 0.6547 06 1.4256 15 0.3164 78 1.0394 16 0.7052 76 0.2949 72 1.2369 41 0.0107 64 0.1445 89 0.0831 38
A STUDY ON MUTUAL FUNDS 1.3903 5
4/1/2010
10.78
1.0101
0.3802 48
1.9330 7 22.691 04
Average return=0.380248 Risk=d*d/(n-1) =22.69104/(19-1) =1.1228 INTERPRETATION: The above table shows the risk returns of SBI company. The avg returns is=0.380248 and the risk is=1.1228 The company has the highest value=11.06 is price NAV and lowest price is=10.2
Statement of mutualfunds of Shinsel Asset Management

D NAV
DATE
DDDDate 29/01/2010 28/01/2010
NA V
(Rs.) 29.65 29.68
return
avg 0.016 87 0.016 87 0.016 87 0.016 87 0.016 87
diff
d*d
0.1011 8 0 0.0336 9 0.0337 0
0.1180 5 0.0168 7 0.0168 2 0.0168 3 0.0168 7
0.0139 36 0.0002 85 0.0002 83 0.0002 83 0.0002 85
27/01/2010
29.68
25/01/2010
29.67
22/01/2010
29.66
21/01/2010
29.66
A STUDY ON MUTUAL FUNDS 0.1011 5 0.0337 5 0 0.1012 8 0 0.1351 8 0.0338 4 0.1015 57 0.0676 4 0.0676 8 0.0677 28 0
4/1/2010 29.56
20/01/2010
29.63
19/01/2010
29.62
18/01/2010
29.62
15/01/2010
29.59
14/01/2010
29.59
13/01/2010
29.55
12/1/2010
29.54
11/1/2010
29.57
8/1/2010
29.55
7/1/2010
29.53
6/1/2010
29.55
5/1/2010
29.55
0.0338 41
0.016 87 0.016 87 0.016 87 0.016 87 0.016 87 0.016 87 0.016 87 0.016 87 0.016 87 0.016 87 0.016 87 0.016 87 0.016 87
0.0842 8 0.0168 8 0.0168 7 0.0844 1 0.0168 7 0.1183 1 0.0169 7 0.1184 27 0.0507 7 0.0508 1 0.0845 98 0.0168 7 0.0507 11
0.0071 02 0.0002 85 0.0002 85 0.0071 26 0.0002 85 0.0139 97 0.0002 88 0.0140 25 0.0025 77 0.0025 82 0.0071 57 0.0002 85 0.0025 72 0.0736 36
Average return=0.01687 Risk=d*d/(n1)
A STUDY ON MUTUAL FUNDS =0.0736 36/(19-1) =0.0639 INTERPRETATION: The above table shows the risk returns of SHINSEL asset management . The avg returns of the company is=0.0168 and risk is=0.0639 The company has the highest value is =29.68 is price of NAV and the Lowest vale is=29.53
A STUDY ON MUTUAL FUNDS Statement of mutualfunds of Sundaram
NAV D
DATE
Date 29/01/201 0 28/01/201 0
NAV
(Rs.) 13.41 13.37
return 0.2982 8 1.0471 2 3.7037 04 1.1661 81 0.5763 69 2.0057 31 0.4213 48 0.6293 71 0.0694 9 0.0695 41 0.6254 3 0.2797 2 0.0701 3 -
avg
diff 5.568 45 6.317 29 1.566 47 4.103 99 4.693 8 3.264 44 4.848 82 4.640 8 5.339 66 5.200 63 5.895 6 5.549 89 5.340 3 -
D*D
5.2701 69 5.2701 69 5.2701 69 5.2701 69 5.2701 69 5.2701 69 5.2701 69 5.2701 69 5.2701 69 5.2701 69 5.2701 69 5.2701 69 5.2701 69 5.2701
31.007 68 39.908 15 2.4538 14 16.842 72 22.031 76 10.656 56 23.511 06 21.537 01 28.511 99 27.046 53 34.758 14 30.801 27 28.518 75 28.519
27/01/201 0
13.23
25/01/201 0
13.72
22/01/201 0
13.88
21/01/201 0
13.96
20/01/201 0
14.24
19/01/201 0
14.3
18/01/201 0
14.39
15/01/201 0
14.38
14/01/201 0
14.39
13/01/201 0
14.3
12/1/2010
14.26
11/1/2010 8/1/2010
14.25 14.24
A STUDY ON MUTUAL FUNDS 0.0701 8

7/1/2010 14.28
69 5.2701 69 5.2701 69 5.2701 69 5.2701 69
0.2808 99 0.1400 56 0.5594 4 0.7032 3
6/1/2010
14.3
5/1/2010
14.22
4/1/2010
14.12
5.340 34 4.989 27 5.130 11 5.829 61 5.973 4
28 24.892 82 26.318 06 33.984 35 35.681 55 466.98 15
Average return=5.270169 Risk=d*d/(n-1) =466.9815/(19-1) =5.0934 INTERPRETATION: The above table shows the risk returns of SUNDARAM MUTUALFUNDS The avg returns of the company is=5.270169 and risk of the company is=5.0934 The company has the highest value is=14.39 is price of NAV and the lowest value is=13.23
statement of mutualfunds of Tata

Date 29/01/2010 28/01/2010 NAV (Rs.) 18.81 18.78
returns 0.1594 9 0 0.7454 74 0.2114 16 0.2637 13 0.5260 39
avg
diff
27/01/2010 25/01/2010 22/01/2010 21/01/2010 20/01/2010
18.78 18.92 18.96 19.01 19.11
0.0269 03 0.0269 03 0.0269 03 0.0269 03 0.0269 03 0.0269 03
0.18639 -0.0269 0.71857 1 0.18451 3 0.23681 0.49913 6
A STUDY ON MUTUAL FUNDS 0.0269 03 -0.0269 0.0269 03 0.23474 0.0269 03 0.13129 0.0269 03 -0.1314
19/01/2010 18/01/2010
19.11 19.16
15/01/2010
19.14
14/01/2010
19.12
13/01/2010
19.07
12/1/2010
19.04
0 0.2616 43 0.1043 8 0.1044 9 0.2615 1 0.1573 2 0 0.4201 7 0 0 0.1054 9 -0.211
0.0269 03 0.28841 0.0269 03 0.18422 0.0269 03 -0.0269 0.0269 03 0.44707 0.0269 03 -0.0269 0.0269 03 -0.0269 0.0269 03 0.13239 0.0269 03 -0.2381
11/1/2010
19.04
8/1/2010
18.96
7/1/2010 6/1/2010
18.96 18.96
5/1/2010
18.94
4/1/2010
18.9
Average return=0.026903 Risk=d*d/(n-1) =0.05669/(19-1) =0.0561 INTERPRETATION: The above table shows the risk returns of the company TATA MUTUALFUNDS. The avg returns of the company=0.026903 and the risk is=0.0561 The company has the highest value of price=19.16 and the lowest price of the company=18.78
Statement of mutual funds of UTI
ND
DATE
Date 29/01/201 0 28/01/201 0
NAV
AV (Rs.) 11.62 11.61
return 0.0860 6 0.1722 65 0.0859 8 0 0.0860 6 0
avg 0.023 92 0.023 92 0.023 92 0.023 92 0.023 92 0.023 92 0.023 92 0.023 92 0.023 92 0.023 92 0.023 92 -
diff 0.0621 4 0.1961 85 0.0620 6 0.0239 2 0.0621 4 0.0239 2 0.0239 2 0.0622 1 0.0239 2 0.0239 2 0.0622 9 0.1102
d*d
0.0038 61 0.0384 89 0.0038 52 0.0005 72 0.0038 61 0.0005 72 0.0005 72 0.0038 7 0.0005 72 0.0005 72 0.0038 8 0.0121
27/01/201 0
11.63
25/01/201 0
11.62
22/01/201 0
11.62
21/01/201 0
11.61
20/01/201 0
11.61
19/01/201 0
11.61
18/01/201 0
11.6
0 0.0861 3 0
15/01/201 0
11.6
14/01/201 0
11.6
13/01/201 0 12/1/2010
11.59 11.6
0 0.0862 1 0.0862
A STUDY ON MUTUAL FUNDS 0.023 92 0.023 92 0.023 92 0.023 92 0.023 92 0.023 92 0.023 92
11/1/2010
11.59
81 0.0862 1 0
01 0.0622 9 0.0239 2 0.0239 2 0.0623 6 0.1102 76 0.1486 4
44 0.0038 8 0.0005 72 0.0005 72 0.0038 89 0.0121 61 0.0220 95 0.1159 87
8/1/2010
11.59
7/1/2010
11.59
6/1/2010
11.58
0 0.0862 8 0.0863 56 0.1725 6
5/1/2010
11.59
4/1/2010
11.57
Average return=0.02392 Risk=d*d/(n-1) =0.115987/(19-1) =0.0803
INTERPRETATION: The above table shows the risk returns of SUNDARAM MUTUALFUNDS The avg returns of the company is=0.02392 and risk of the company is=0.0803
Statement of mutual funds of Birla Sunlife
Da D
DATE
te 31/01/201 0 29/01/201 0
NAV
NAV (Rs.) 14.96 14.95
return 0.066 84 0
avg 0.011 15 0.011 15 0.011 15
diff 0.055 69 0.011 15 0.011 15
d*d
0.0031 02 0.0001 24 0.0001 24
28/01/201 0
14.95
27/01/201 0
14.95
A STUDY ON MUTUAL FUNDS 0.011 15 0.011 15 0.011 15 0.011 15 0.011 15 0.011 15 0.011 15 0.011 15 0.011 15 0.011 15 0.011 15 0.011 15 0.011 15 0.011 15 0.011 15 0.011 15 -
26/01/201 0
14.95
0
14.95
0.011 15 0.011 15 0.011 15 0.011 15 0.055 74 0.011 15 0.011 15 0.011 15 0.011 15 0.011 15 0.011 15 0.055 78 0.011 15 0.011 15 0.011 15 0.011 15 0.011
0.0001 24 0.0001 24 0.0001 24 0.0001 24 0.0031 07 0.0001 24 0.0001 24 0.0001 24 0.0001 24 0.0001 24 0.0001 24 0.0031 12 0.0001 24 0.0001 24 0.0001 24 0.0001 24 0.0001
25/01/201 0
0
14.95
24/01/201 0
0
14.95
22/01/201 0
21/01/201 0
14.94
0 0.066 89 0
20/01/201 0
14.94
19/01/201 0
14.94
0
14.94
18/01/201 0
0
14.94
17/01/201 0
0
14.94
15/01/201 0
0
14.94
14/01/201 0
13/01/201 0
14.93
0 0.066 93 0
12/1/2010
14.93
11/1/2010
14.93
0
10/1/2010 14.93
0
8/1/2010 7/1/2010 14.93 14.93
0 0
A STUDY ON MUTUAL FUNDS 0.011 15 0.011 15 0.011 15 0.011 15 0.011 15
15 0.011 15 0.055 83 0.011 15 0.011 15
24 0.0001 24 0.0031 17 0.0001 24 0.0001 24 0.0149 24
6/1/2010
14.93
5/1/2010
14.92
0 0.066 98 0
4/1/2010
14.92
3/1/2010
14.92
Average risk=0.01115 Risk=d*d/(n-1) =0.014924/(25-1) =0.0249 INTERPRETATION: The above table shows the risk returns of SUNDARAM MUTUALFUNDS The avg returns of the company is=0.01115 and risk of the company is=0.0249
Statement of mutual funds of LIC
DD
ND
DATE
ate 29/01/201 0 28/01/201 0
NAV
AV (Rs.) 14.61 14.61
return
avg 0.025 27 0.025 27 0.025 27 0.025 27 0.025 27 0.025 27 0.025 27 0.025 27 0.025 27 0.025 27 0.025 27 -
diff
d*d
0
14.61
0.025 27 0.025 27 0.025 27 0.025 27 0.043 18 0.111 72 0.025 27 0.025 27 0.043 32 0.025 27 0.043 36 0.025
0.0006 39 0.0006 39 0.0006 39 0.0006 39 0.0018 64 0.0124 81 0.0006 39 0.0006 39 0.0018 76 0.0006 39 0.0018 8 0.0006
27/01/201 0
0
14.61
25/01/201 0
0
14.61
22/01/201 0
21/01/201 0
14.6
20/01/201 0
14.58
0 0.068 45 0.136 99 0
19/01/201 0
14.58
18/01/201 0
14.58
15/01/201 0
14.57
0 0.068 59 0 0.068 63 0
14/01/201 0
14.57
13/01/201 0 12/1/2010
14.56 14.56
A STUDY ON MUTUAL FUNDS 0.025 27 0.025 27 0.025 27 0.025 27 0.025 27 0.025 27 0.025 27 0.025 27
27 0.025 27 0.043 41 0.025 27 0.025 27 0.025 27 0.025 27 0.043 46
39 0.0006 39 0.0018 85 0.0006 39 0.0006 39 0.0006 39 0.0006 39 0.0018 89 0.0301 76
11/1/2010
14.56
8/1/2010
14.55
0 0.068 68 0
7/1/2010
14.55
6/1/2010
14.55
0
5/1/2010 14.55
0
4/1/2010 14.55
1/1/2010
14.54
0 0.068 73
Average return=0.02527 Risk=d*d/(n-1) =0.030176/(20-1) =0.0399 INTERPRETATION: The above table shows the risk returns of SUNDARAM MUTUALFUNDS The avg returns of the company is=0.02527 and risk of the company is=0.0399
Statement of mutual funds of Principal PNB
DD D
DATE
dddDate 29/01/201 0 28/01/201 0
NAV
NAV (Rs.) 15.24 15.04
return 1.3123 4 0.4654 3 4.4756
avg
diff 1.4781 8 0.6312 7 4.3097
d*d
0.1658 45 0.1658 45 0.1658
2.1850 19 0.3985 02 18.574
27/01/201 0 25/01/201
14.97 15.64

0 22/01/201 0 21/01/201 0 20/01/201 0 19/01/201 0 18/01/201 0 15/01/201 0 15.89 16.03 16.42
16.38
16.47
16.46
14/01/201 0
16.37
13/01/201 0
16.16
12/1/2010
16.15
11/1/2010
16.27
8/1/2010
15.97
18 1.5984 65 0.8810 57 2.4329 38 0.2436 1 0.5494 51 0.0607 2 0.5467 8 1.2828 3 0.0618 8 0.7430 34 1.8438 8 0.1252 35 0.5003 13 1.6179 2 0.8855 2
45 0.1658 45 0.1658 45 0.1658 45 0.1658 45 0.1658 45 0.1658 45 0.1658 45 0.1658 45 0.1658 45 0.1658 45 0.1658 45 0.1658 45 0.1658 45 0.1658 45 0.1658 45
7/1/2010
15.99
6/1/2010
16.07
5/1/2010
15.81
4/1/2010
15.67
73 1.4326 2 0.7152 12 2.2670 93 0.4094 5 0.3836 06 0.2265 6 0.7126 3 1.4486 8 0.2277 3 0.5771 89 2.0097 3 0.0406 1 0.3344 68 1.7837 7 1.0513 6
14 2.0524 01 0.5115 29 5.1397 12 0.1676 5 0.1471 53 0.0513 3 0.5078 34 2.0986 72 0.0518 59 0.3331 47 4.0390 12 0.0016 49 0.1118 69 3.1818 23 1.1053 59 40.658 66
Average risk=0.165845 Risk=d*d/(n-1)
A STUDY ON MUTUAL FUNDS =40.65866/(19-1) =1.5029
INTERPRETATION: The above table shows the risk returns of SUNDARAM MUTUALFUNDS The avg returns of the company is=0.165845 and risk of the company is=1.5029
Statement of mutual funds of Reliance
ND
DATE
Date 29/01/201 0 28/01/201 0 27/01/201 0 25/01/201 0 22/01/201 0 21/01/201 0 20/01/201 0 19/01/201 0 18/01/201 0 15/01/201 0 14/01/201 0
NAV
AV (Rs.) 57.6 57.41
return 0.3298 6 0.1916 2.0244 33 0.7184 4 0.7812 5 1.7526 12 0.2815 5 0.6440 96 0.3446 0.0823 3 0.5273 6 0.3147 8
avg
diff 0.5641 6 0.4259 1.7901 39 0.4841 46 0.5469 56 1.5183 18 0.0472 56 0.4098 02 0.5789 0.3166 3 0.7616 5 0.5490 7
d*d
57.3 58.46 58.88 59.34 60.38 60.55 60.94 60.73
0.2342 94 0.2342 94 0.2342 94 0.2342 94 0.2342 94 0.2342 94 0.2342 94 0.2342 94 0.2342 94 0.2342 94 0.2342 94 0.2342 94
0.3182 71 0.1813 89 3.2045 97 0.2343 97 0.2991 61 2.3052 9 0.0022 33 0.1679 38 0.3351 2 0.1002 52 0.5801 12 0.3014 8
60.68
13/01/201 0
60.36
12/1/2010
60.17
A STUDY ON MUTUAL FUNDS 0.6980 22 0.2970 8 0.1489 82 0.1322 31 0.3466 5 0.5300 6 0.2342 94 0.2342 94 0.2342 94 0.2342 94 0.2342 94 0.2342 94 0.4637 28 0.5313 7 0.0853 1 0.1020 6 0.5809 4 0.7643 6 0.2150 44 0.2823 57 0.0072 78 0.0104 17 0.3374 95 0.5842 44 9.4670 74
11/1/2010
60.59
8/1/2010
60.41
7/1/2010
60.5
6/1/2010
60.58
5/1/2010
60.37
4/1/2010
60.05
Avg return=0.234294 Risk=d*d/(n-1) =9.467074/18 =0.725 INTERPRETATION: The above table shows the risk returns of SUNDARAM MUTUALFUNDS The avg returns of the company is=0.234294 and risk of the company is=0.725
Performance evaluation of MFS
Fund house
Return(Rp)
Risk(S.D)
Risk free rate
Sahara SBI Shinsel Sundaram Tata Birla Sunlife LIC Principal PNB Reliance Fortis
0.03893 0.0380248 0.01687 5.270169 0.026903 0.02392 0.01115 0.02527 0.165845 0.234294
0.1815 1.1228 0.0639 5.0934 0.0561 0.0803 0.0249 0.0399 1.5029 0.725
0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08
Sharpes performance index
SPI=Rp-Rf/S.D
Sahara=0.03893-0.08/0.1815 =-0.226
SBI=0.0380248-0.08/1.1228 =-0.0374
Shinsel=0.01687-0.08/0.0639 =-0.988
Sundram=5.270169-0.08/5.0934 =1.018 Tata=0.026903-0.08/0.0561 =-0.946 Birla Sunlife=0.02392-0.08/0.0803 =-0.698
LIC=0.01115-0.08/0.0249 =-2.765 Principal PNB=0.02527-0.08/0.0399 =-1.372
Reliance=0.165845-0.08/1.5029 =0.057
Fortis=0.234294-0.08/0.725 =0.213
Company Name Sahara SBI Shinsel Sundaram Tata Birla Sunlife LIC Principal PNB Reliance Fortis
Performance index -0.226 -0.0374 -0.988 1.018 -0.946 -0.698 -2.765 -1.372 0.057 0.213
CHAPTER-6
FINDINGS
FINDING : The present Project work has been undertaken to study and analys eqity and mutualfunds With reference to their risk and returns with along this project we absence the following facts The company SAHARA having the highes price of =10.83 and lowest price of 10.7 it is showing more fluctuation the risk is=0.03893 and return is=0.1815 the coefficient of variable is =-0.226
The company SBI having the highes price of =11.06 and lowest price of 10.2 it is showing more fluctuation the risk is=0.0380248 and return is=1.1228 the coefficient of variable is =-0.0374
The company SHINESEL having the highes price of =29.68 and lowest price of 29.53 it is showing more fluctuation the risk is=0.01687 and return is=0.0639 the coefficient of variable is =-0.988
The company SUNDARAM having the highes price of =14.39and lowest price of 13.23 it is showing more fluctuation the risk is=5.270169 and return is=5.0934 the coefficient of variable is =1.018
The company TATA having the highes price of =19.16 and lowest price of 18.78 it is showing more fluctuation the risk is=0.026903 and return is=0.0561 the coefficient of variable is =-0.946
The company Birla Sunlife having the highes price of =11.61 and lowest price of 11.06 it is showing more fluctuation the risk is=0.0803 and return is=0.02392 the coefficient of variable is =-0.698
The company LIC having the highes price of =14.96 and lowest price of 14.92 it is showing more fluctuation the risk is=0.0249 and return is=0.01115 the coefficient of variable is =-2.765
The company Principal PNB having the highes price of =14.61 and lowest price of 14.06 it is showing more fluctuation the risk is=0.0399 and return is=0.02527 the coefficient of variable is =-1.372
The company Reliance having the highes price of =16.47 and lowest price of 14.97 it is showing more fluctuation the risk is=0.0249 and return is=0.01115 the coefficient of variable is =0.057
The company Fortis having the highes price of =60.94 and lowest price of 57.03 it is showing more fluctuation the risk is=0.725 and return is=0.234294 the coefficient of variable is =0.213
SUGGESTIONS
The present project work has been under taken to study best available mutual fund in the industry and evaluating their performances. While doing so we come a cross the analysis an few fact have been identify aften such analysis interpretiation and findings will be able to suggest investor as follows.
Sahara mutual fund is showing best performance index of all the funds SPI of Sahara -0.226. There fore should be brought if lowest NAV 10.07
SBI mutual fund is showing best performance index of all the funds SPI of Sahara -0.0374. There fore should be brought if lowest NAV 10.07
Shinsel Asset Management mutual fund is showing best performance index of all the funds SPI of Sahara -0.988. There fore should be brought if lowest NAV 29.53
A STUDY ON MUTUAL FUNDS Sundaram mutual fund is showing best performance index of all the funds SPI of Sahara 1.018. There fore should be brought if lowest NAV 13.23
Tata mutual fund is showing best performance index of all the funds SPI of Sahara -0.946. There fore should be brought if lowest NAV 18.78
UTI mutual fund is showing best performance index of all the funds SPI of Sahara -0.698. There fore should be brought if lowest NAV 11.06
Birla Sunlife mutual fund is showing best performance index of all the funds SPI of Sahara 2.765. There fore should be brought if lowest NAV 14.92
LIC mutual fund is showing best performance index of all the funds SPI of Sahara -1.372. There fore should be brought if lowest NAV 14.06
Reliance mutual fund is showing best performance index of all the funds SPI of Sahara 0.057. There fore should be brought if lowest NAV 14.97
Fortis mutual fund is showing best performance index of all the funds SPI of Sahara 0.213. There fore should be brought if lowest NAV 57.03
CONCLUSION
The present project work has been undertaken to study the different mutual funds which are investing in banking sector.
1.
The risks and returns of these funds have been studied for a
period of 1 year and facts have been identified. After the findings the suggestions are been made regarding to the investment of different mutual funds in banking sectors. 2. Five Mutual funds dealing in banking sectors have been
taken and out of those Sahara banking fund is performing very good. 3. After that others are showing good returns but as well they
are having risks also more relating to returns, however the funds are performing satisfactorily.
Bibliography
-S
KEVIN
PORTFOLIO
MANAGEMENT
-V.K BHALLA
SECURITY
ANALYSIS AND PORTFOLIO
MANAGEMENT.
-FISCHER & JORDON
SECURITY
MANAGEMENT AND PORTFOLIO
MANAGEMENT
-V.K. BHALLA & R.M
KISHORE
MUTUAL FUNDS &
INVESTMENT
Websites :
www.nseindia.com www.bseindia.com www.networthdirect.com www.valueresearch.com

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A STUDY ON MUTUAL FUNDS

monitoring the performance of your investments in Mutual Funds.

The comparison of various schemes of different Mutual Funds based on

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A STUDY ON MUTUAL FUNDS

A STUDY ON MUTUAL FUNDS

A STUDY ON MUTUAL FUNDS

A STUDY ON MUTUAL FUNDS

A STUDY ON MUTUAL FUNDS

A STUDY ON MUTUAL FUNDS

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TO know how mutual funds are investing the funds in different

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A STUDY ON MUTUAL FUNDS

A STUDY ON MUTUAL FUNDS

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A STUDY ON MUTUAL FUNDS

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* Funds not yet available in India

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