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Comparative study on performance of equity schemes of reliance mutual fund mba project report
 

Comparative study on performance of equity schemes of reliance mutual fund mba project report

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Comparative study on performance of equity schemes of reliance mutual fund mba project report

Comparative study on performance of equity schemes of reliance mutual fund mba project report

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    Comparative study on performance of equity schemes of reliance mutual fund mba project report Comparative study on performance of equity schemes of reliance mutual fund mba project report Document Transcript

    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”EXECUTIVE SUMMARY Now a day, there is a tough competition in financial avenues due to increase in the investment products. People can get many investment options to invest their savings. Selecting one from the many available options considering many associated factors is a very complex process. Reliance Mutual Fund is one of Indias largest brokerage and securities distribution house in India. It is new to Securities market but still among the top 5 performing company leaving far behind the oldest companies. It is considered to be one of the leading investment broking houses catering to the needs of both institutional and non-institutional investor categories with presence all over the country through franchisees and co-coordinators. In this project I studied the schemes of Reliance Mutual fund and their returns invarious period of time which helped me in knowing how the various schemes are performingand the reasons behind it. I also came to know the risk associated with the various schemes andhow risk and returns are related. Hence my topic of study is “Comparative study onperformance of Equity Schemes of Reliance Mutual Fund.” BABASAB PATIL 1
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”Design of the StudyNeed for the Study:The study will help the organization in knowing how the Equity schemes of the company’s areperforming and which schemes are preferred most by the investors.Objectives of the Study • To know the Performance of the preferred equity of Reliance Mutual Fund. • To understand the concept of Mutual Fund its working, mechanism and types traded in India. • To compare the risk and return associated with the Equity Schemes of Reliance Mutual Fund. • To know which scheme of Equity of Reliance Mutual Fund is most preferred by the investors and what factors they consider while investing in reliance mutual fund. • To evaluate the performance Sharpe’s and Treynor’s index are usedScope of the study For the study Equity schemes of Reliance Mutual Fund were scanned whosecorpus value is more than 500 crores to compare their performance by calculating risk andreturn associated with these schemes. Also a survey was conducted on Reliance Investors toknow the most preferred Equity scheme by the Investors and what factors make them Investin Reliance mutual Fund BABASAB PATIL 2
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” To evaluate the performance of the scheme and funds I have applied sharp’s index & Treynor’s index . Limitations of the study:  The data collection was strictly confined to secondary sources. Primary data was associated with only the survey conducted on the investors.  Collecting historical NAV is very difficult.  Selection of schemes for study is very difficult because lot of Varieties in equity Schemes Techniques of analysis: 1. Return: Return on a typical investment consists of two components. The basic is the periodic cash receipts (or income) on the investment, either in the form of interest or dividends. The second component is the change in the price of the assets-commonly called the capital gain or loss. This element of return is the difference between the purchase price and the price at which the assets can be or is sold; therefore, it can be again or a loss. The return has been calculated as under: NAVt – NAVt-1 Portfolio return: Rit =--------------------------------- NAV t-1 Where Rit is the difference between Net Asset Values for two consecutive days dividend by the NAV of the preceding day. BABASAB PATIL 3
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” M.indt – M.indt-1 Market return: Rmt =-------------------------------- M.indt-1 Where Rmt is the difference between market indices of two consecutive days dividend by the market index for the preceding day 2. Risk : Risk is neither good nor bad. Risk in holding securities is generally associated with the possibility that realized returns will be less than expected returns. The difference between the required rate of returns on mutual fund investment and the risk free return is the risk premium. Risk can be measured in terms of Beta & standard deviations. Standard deviation It is used to measure the variation in individual returns from the average expected returns over a certain period. Standard deviation is used in the concept of risk of a portfolio of investments. Higher standard deviation means a greater fluctuation in expected return. Standard deviation (SD) =/ var Where Var = variance BABASAB PATIL 4
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” Var= Σ p (ri-E(r)) 2 • Beta : Beta measures the systematic risk and shows how prices of securities respond to the market forces. It is calculated by relating the return on a security with return for the market. By convention, market will have beta 1.0.Mutual fund is said to be volatile, more volatile or less volatile. If beta is grater than 1 the stock is said to be riskier than market. If beta is less than 1,the indication is that stock is less risky in comparison to market. If beta is zero then the risk is the same as that of the market. Negative beta is rare. β = nΣxy-(Σx)( Σy) nΣx2-(Σx) 2 Where n= number of days X =rolling returns of the NSE index Y= rolling returns of the schemes 3. Sharpe index Sharpe index measures risk premium of a portfolio, relative to the total amount of risk in the portfolio. Sharpe index summarizes the risk and return of a portfolio in a single measure that categorizes the performance of funds on the risk- adjusted basis. The larger the Sharpe’s index the portfolio over performs the market and vise versa. BABASAB PATIL 5
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”Wherest = Sharpe’s indexRp= portfolio returnRf= Risk free rate of return (7.59%)SD= Standard Deviation of the port folio St= RP-Rf SD 4. Treynor’s Index Treynor’s model is on the concept of the characteristics straight line. The characteristics line has drawn a relationship between the market return and a specific portfolio without taking into consideration any direct adjustment for risk. It is also known as reward to volatility ratio and is defined as: The formula for Treynor’s Index is: Portfolio avg return (Rp) – risk-free rate of interest (Rf) Treynor index (Tn) = --------------------------------------------------------------------- Beta coefficient of portfolio (Bp) Rp -Rf BABASAB PATIL 6
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” Tn = ------------------------- Bp It measures portfolio risk in terms of beta, which is weighted average of individual security beta. The ratio is investors, for who the fund represents only a fraction of their total assets. The higher the ratio better is the performance. BABASAB PATIL 7
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”INTRODUCTION An investment means employment of funds on assets (i.e. securities or mutual funds or any of the investment avenues) with the aim of earning of income as well as capital appreciation. There are mainly two attributes while investing to any of the means, i.e. time and risk. There are mainly four objectives, which the investments activities will carry on those are : • Return • Risk • Liquidity • Hedge against inflation • Safety There are many alternatives which investment avenues are open to the investors to suit their needs and nature .The selection of investment alternatives are depends up on the required level of return and the risk tolerance level. These alternatives range from financial securities to traditional non-securities investment. Following are the various investment alternatives. Negotiable and fixed income securities • Equity shares • Preference share • Debentures BABASAB PATIL 8
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” • Bonds • Indira vikas patra &Kisan Vikas patra • Government securities • Money market securities (i.e. treasury bill, commercial paper, certificate of Deposit etc)Non-negotiable securities • Bank deposit • Post office deposit • NBFC deposit • Tax saving schemes • Public provident fund scheme • National saving scheme • Life insurance • Mutual funds • Real estate BABASAB PATIL 9
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”Securities Companies raise funds to finance their projects through various methods. The promoters can bring their own money or barrow from the financial institutions or mobilizes capital by issuing securities. The funds `may be raised through issue of fresh share at per or premium. Preference shares debenture or global depository receipts. These are mainly two markets which any company can raise their funds; those are primary market and secondary market .the companies raise funds for the following purposes: • To promote a new company • To expand an existing company • To diversify the production • To meet the regular working capital requirement • To capitalize the reserves. NEW ISSUE MARKET (PRIMARY MARKET) Stock available for the first time is offered through new issue market. The issuer may be a new company or an existing company. These issues may be of new type or the secure used in the past. In the new market the issuer can be consider as a manufacturers. The issuing house, investing banker and broker act as the channel of distributing for new issue. They take the responsibility of selling the stock to the publicThe primary market provides a direct link between the prospective investors and BABASAB PATIL 10
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” Company. The main survives function of the primary market are: • Origination • Underwriting • Distribution The main objectives of NSE are as follows.  To establish the nation wide trading facility for Equities, Debt instruments and hybrids.  To ensure equal access to investors all over the country through appropriate communication network.  To enable shorter settlement cycle and book entry settlement system. BABASAB PATIL 11
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”INTRODUCTION TO THE MUTUAL FUNDMutual Funds are dynamic financial institutions, which play a crucial role in an economy mymobilizing a link between savings and the capital market. Therefore the activities of MutualFunds have both short and long term impact on the savings and capital markets and the nationaleconomy. Mutual Funds thus assist the process of financial deepening and intermediation. Theymobilize Funds in the savings market and act as complementary to banking, at the same timethey also compete with banks and other financial institutions. In the process stock marketactivities are also significantly influenced by Mutual Funds. The scope and efficiency of MutualFunds are influenced by overall economic fundamentals, the interrelationship between thefinancial and real sector, the nature of development of the savings and capital markets, marketstructure, institutional arrangements and overall policy regime.MEANINGA MUTUAL FUND IS A COMMON POOL OF MONEY INTO WHICH THE INVESTORSPLACE THEIR CONTRIBUTIONS THAT ARE TO BE INVESTED IN ACCORDANCEWITH A STATED OBJECTIVE.Mutual fund is a mechanism for pooling the resources by issuing units to the investorsAnd investing funds in securities in accordance with objectives as disclosed in offer documentInvestments in securities are spread across a wide cross-section of industries and sectors and thusthe risk is reduced. Diversification reduces the risk because all stocks may not move in the samedirection in the same proportion at the same time. Mutual fund issues units to the investors in BABASAB PATIL 12
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”accordance with quantum of money invested by them. Investors of mutual funds are known asunit holders.The investors in proportion to their investments share the profits or losses. The mutual fundsnormally come out with a number of schemes with different investment objectives, which arelaunches from time to time. A mutual fund is required to be registered with Securities andExchange Board of India (SEBI), which regulates securities markets before it can collect fundsfrom the public.About Reliance Capital Asset Management Ltd.Reliance Capital Asset Management Limited (RCAM), a company registered under theCompanies Act, 1956 was appointed to act as the Investment Manager of Reliance Mutual Fund.Reliance Capital Asset Management Limited is a wholly owned subsidiary of Reliance CapitalLimited, the sponsor. The entire paid-up capital (100%) of Reliance Capital Asset ManagementLimited is held by Reliance Capital Limited. Reliance Capital Asset Management Limited was approved as the Asset ManagementCompany for the Mutual Fund by SEBI vide their letter no IIMARP/1264/95 dated June 30,1995. The Mutual Fund has entered into an Investment Management Agreement (IMA) withRCAM dated May 12, 1995 and was amended on August 12, 1997 in line with SEBI (MutualFunds) Regulations, 1996. Pursuant to this IMA, RCAM is authorised to act as InvestmentManager of Reliance Mutual Fund. The networth of the Asset Management Company includingpreference shares as on March 31, 2005 is Rs.30.13 crores. Reliance Mutual Fund has launched BABASAB PATIL 13
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”twenty five Schemes till date, namely: Reliance Vision Fund (September 1995), RelianceGrowth Fund (September 1995) Reliance Income Fund (December 1997), Reliance Liquid Fund(March 1998), Reliance Medium Term Fund (August 2000), Reliance Short Term Fund(December 2002), Reliance Fixed Term Scheme (March 2003), Reliance Banking Fund (May2003), Reliance Gilt Securities Fund (July 2003), Reliance Monthly Income Plan (December2003), Reliance Diversified Power Sector Fund (March 2004) Reliance Pharma Fund ( May2004), Reliance Floating Rate Fund (August 2004), Reliance Media & Entertainment Fund(September 2004), Reliance NRI Equity Fund (October 2004), Reliance NRI Income Fund(October 2004), Reliance Index Fund (January 2005), Reliance Equity Opportunities Fund(February 2005), Reliance Fixed Maturity Fund - Series I (March 2005), Reliance FixedMaturity Fund - Series II (April 2005), Reliance Regular Saving Fund (May 2005), RelianceLiquidity Fund (June 2005), Reliance Tax Saver (ELSS) Fund (July 2005), Reliance Fixed TenorFund (November 2005) and Reliance Equity Fund (Feb 2006). RCAM has been registered as a portfolio manager vide SEBI Registration No.INP000000423 and renewed effective 1st August, 2003.RCAM has commenced these activities.It has been ensured that key personnel of the AMC, the systems, back office, bank and securitiesaccounts are segregated activity wise and there exists systems to prohibit access to insideinformation of various activities. As per SEBI Regulations, it will further ensure that AMC meetsthe capital adequacy requirements, if any, separately for each such activity. BABASAB PATIL 14
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”TRUSTEES: Trustees are like internal regulators in a mutual fund, and their job is to protect theinterest of unitholders. Sponsors appoint trustees. Trustees appoint the AMC, which,subsequently seek their approval for the work it does, and reports periodically to them on howthe business is being run. Trustees float and market schemes, and secure necessary approvals.They check if the AMC’s investments are within defined limits and whether the fund’s assets areprotected. Trustees can be held accountable for financial irregularities in the mutual fund.CUSTODIAN: A custodian handles the investment back office of a mutual fund. Itsresponsibilities include receipt and delivery of securities, collection of income, distribution ofdividends, and segregation of assets between schemes. The sponsor of a mutual fund mutual fundcannot act as a custodian to the fund. This condition, formulated in the interest of investors,ensures that the assets of mutual fund are not in the hands of its sponsor.REGISTRAR : Registrars, also known as transfer agents, handle all investor-related services.This includes issuing and redeeming units, sending fact sheet and annual reports. Some fundhouses handle such functions in-house. BABASAB PATIL 15
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”STRUCTURE OF MUTUAL FUND IN INDIA: Trustees SEBI Sponsor Operations AMC Fund Manager Market / Sales Mutual Fund Schemes InvestorGROWTH OF MUTUAL FUNDS:The Indian mutual fund as passed through three phases. The first phase was between 1964 and1987 and only player was the trust of India, which had a total asset of Rs. 6700/- crores and theend of 1988.the second phase is between 1987 and 1993 during which period 8 funds wereestablished (6 by banks and one each by LIC and GIC). The total asset under management hadgrown to Rs.61, 028/- crores at and of 1994 and the numbers of schemes were 167. BABASAB PATIL 16
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”The third began with the entry of private and foreign sectors in the mutual fund industry in 1993.Kothari pioneer mutual fund was the first fund to be established by the private sector inassociation with a foreign fund.As at the end of financial year 2000 (31 march) 32 funds were functioning with Rs. 1,13,005crores as total asset under management. As on august end 2000, there were 33 with 391 schemesand assets under management with Rs. 1,02,849 crores.The securities and exchange board of India (SEBI) came out with comprehensive regulation in1993, which defined the structure of mutual fund and asset management companies for the firsttime. Currently there are 34 of mutual fund organizations in India managing over Rs.1, 02,000/-crore • First investors pool their money in Mutual fund through franchisee or agents or himself in particular scheme. • Fund manager collect that money and diversify that money in different securities. • Then that securities generate return. • That returns will passed back to the investors. BABASAB PATIL 17
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”THE DIFFERENT TYPES OF MUTUAL FUNDS:Schemes according to Maturity Period:A mutual fund scheme can be classified into open-ended scheme or close-ended schemedepending on its maturity period.Open-ended Fund/ SchemeAn open-ended fund or scheme is one that is available for subscription and repurchase on acontinuous basis. These schemes do not have a fixed maturity period. Investors can convenientlybuy and sell units at Net Asset Value (NAV) related prices, which are declared on a daily basis.The key feature of open-end schemes is liquidity.Close-ended Fund/ SchemeA close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is openfor subscription only during a specified period at the time of launch of the scheme. Investors caninvest in the scheme at the time of the initial public issue and thereafter they can buy or sell theunits of the scheme on the stock exchanges where the units are listed. In order to provide an exitroute to the investors, some close-ended funds give an option of selling back the units to the BABASAB PATIL 18
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”mutual fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate thatat least one of the two exit routes is provided to the investor i.e. either repurchase facility orthrough listing on stock exchanges. These mutual funds schemes disclose NAV generally onweekly basis.Schemes according to Investment Objective:A scheme can also be classified as growth scheme, income scheme, or balanced schemeconsidering its investment objective. Such schemes may be open-ended or close-ended schemesas described earlier. Such schemes may be classified mainly as follows:Growth / Equity Oriented SchemeThe aim of growth funds is to provide capital appreciation over the medium to long- term. Suchschemes normally invest a major part of their corpus in equities. Such funds have comparativelyhigh risks. These schemes provide different options to the investors like dividend option, capitalappreciation, etc. and the investors may choose an option depending on their preferences. Theinvestors must indicate the option in the application form. The mutual funds also allow theinvestors to change the options at a later date. Growth schemes are good for investors having along-term outlook seeking appreciation over a period of time.Income / Debt Oriented Scheme BABASAB PATIL 19
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”The aim of income funds is to provide regular and steady income to investors. Such schemesgenerally invest in fixed income securities such as bonds, corporate debentures, Governmentsecurities and money market instruments. Such funds are less risky compared to equity schemes.These funds are not affected because of fluctuations in equity markets. However, opportunitiesof capital appreciation are also limited in such funds. The NAVs of such funds are affectedbecause of change in interest rates in the country. If the interest rates fall, NAVs of such fundsare likely to increase in the short run and vice versa. However, long-term investors may notbother about these fluctuations.Balanced FundThe aim of balanced funds is to provide both growth and regular income as such schemes investboth in equities and fixed income securities in the proportion indicated in their offer documents.These are appropriate for investors looking for moderate growth. They generally invest 40-60%in equity and debt instruments. These funds are also affected because of fluctuations in shareprices in the stock markets. However, NAVs of such funds are likely to be less volatile comparedto pure equity funds.Money Market or Liquid FundThese funds are also income funds and their aim is to provide easy liquidity, preservation ofcapital and moderate income. These schemes invest exclusively in safer short-term instrumentssuch as treasury bills, certificates of deposit, commercial paper and inter-bank call money, BABASAB PATIL 20
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”government securities, etc. Returns on these schemes fluctuate much less compared to otherfunds. These funds are appropriate for corporate and individual investors as a means to park theirsurplus funds for short periods.Gilt FundThese funds invest exclusively in government securities. Government securities have no defaultrisk. NAVs of these schemes also fluctuate due to change in interest rates and other economicfactor as is the case with income or debt oriented schemes.Index FundsIndex Funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&PNSE 50 index (Nifty), etc These schemes invest in the securities in the same weight agecomprising of an index. NAVs of such schemes would rise or fall in accordance with the rise orfall in the index, though not exactly by the same percentage due to some factors known as"tracking error" in technical terms. Necessary disclosures in this regard are made in the offerdocument of the mutual fund scheme. There are also exchange traded index funds launched bythe mutual funds, which are traded on the stock exchanges.Sector specific funds/schemesThese are the funds/schemes, which invest in the securities of only those sectors or industries asspecified in the offer documents. E.g. Pharmaceuticals, Software, Fast Moving Consumer Goods BABASAB PATIL 21
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”(FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance ofthe respective sectors/industries. While these funds may give higher returns, they are more riskycompared to diversified funds. Investors need to keep a watch on the performance of thosesectors/industries and must exit at an appropriate time. They may also seek advice of an expert.Tax Saving SchemesThese schemes offer tax rebates to the investors under specific provisions of the Income Tax Act,1961 as the Government offers tax incentives for investment in specified avenues. e.g. EquityLinked Savings Schemes (ELSS). Pension schemes launched by the mutual funds also offer taxbenefits. These schemes are growth oriented and invest pre-dominantly in equities. Their growthopportunities and risks associated are like any equity-oriented scheme.Load or no-load FundA Load Fund is one that charges a percentage of NAV for entry or exit. That is, each time onebuys or sells units in the fund, a charge will be payable. This charge is used by the mutual fundfor marketing and distribution expenses. Suppose the NAV per unit is Rs.10. If the entry as wellas exit load charged is 1%, then the investors who buy would be required to pay Rs.10.10 andthose who offer their units for repurchase to the mutual fund will get only Rs.9.90 per unit. Theinvestors should take the loads into consideration while making investment as these affect theiryields/returns. However, the investors should also consider the performance track record andservice standards of the mutual fund, which are more important. Efficient funds may give higher BABASAB PATIL 22
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”returns in spite of loads. A no-load fund is one that does not charge for entry or exit. It means theinvestors can enter the fund/scheme at NAV and no additional charges are payable on purchaseor sale of units.Advantages of Mutual Fund; • Professional Management: Qualified professionals manage your money but they are not alone. They have a research team that continuously analyses the performance and prospects of companies. They also select suitable investment to achieve the objective of the scheme, so you see that it is a continues process that takes time and expertise that will add value to your investment. These fund managers are in a better position to manage investments and get a higher return. • Diversification: the Cliché, “Don’t put all your eggs in one basket”. Really applies to the concept of intelligent investing. Diversification lowers the risk of loss by spreading your money across various industries it is a rare occasion when all stocks decline at the same time and in the same proportion. • Choice of schemes: Mutual Fund offers a variety of schemes that will suit individuals needs over a lifetime. When you enter a new stage in your life, all you need to do is sit down with your investments advisers who will help you to re-arrange your portfolio to suit your altered life style. • Affordability: As small investors, we may find that it is not possible to buy shares of larger corporations. Mutual funds generally buy and sell securities in large volumes, BABASAB PATIL 23
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” which allow investors to benefit from lower trading costs. The smallest investor can get started on mutual funds because of the minimal investment requirements. We can invest with a minimum of Rs. 500 in Systematic Investment Plan (SIP) on a regular basis. • Tax benefits: Investments held by investors for a period of 12 months or more qualify for capital gains and will be taxed accordingly. These investments also get the benefit of indexation. And also the dividend received by an investor is tax free in the hands of investors. • Liquidity: with open-end funds, we can redeem all or part of investment any time when we wish and receive the current value of the shares or the NAV related price. Funds are more liquid than most investments in shares, deposits and bonds and the process is standardize, making it quick and efficient so that we can get your cash in hand as soon as possible. • Rupees Cost Averaging: Through using this concept of investing the same amount regularly, mutual funds give you the advantage of getting the average unit price over the long-term. This reduces your risk and also allows you to discipline yourself by actually investing every month or quarterly and not making sporadic investments. • The Transparency of Mutual Funds: The performance of a mutual fund is reviewed by various publications and rating agencies, making it easy for investors to compare one to the other. Once we became part of mutual fund scheme, we were provided with regular updates, for example daily NAVs, as well as information on the specific investments made and the fund manager’s strategy and out look of the scheme. BABASAB PATIL 24
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” • Regulations of Mutual Funds: All mutual funds are required to register with SEBI. They are obliged to follow strict regulations designed to protect investors. All operations are also regularly monitored by the SEBI. Disadvantages Of Mutual Fund Mutual funds have their drawbacks and may not be for everyone: • No Guarantees: No investment is risk free. If the entire stock market declines in value, the value of mutual fund shares will go down as well, no matter how balanced the portfolio. Investors encounter fewer risks when they invest in mutual funds than when they buy and sell stocks on their own. However, anyone who invests through a mutual fund runs the risk of losing money. • Fees and commissions: All funds charge administrative fees to cover their day-to-day expenses. Some funds also charge sales commissions or "loads" to compensate brokers, financial consultants, or financial planners. Even if you dont use a broker or other financial adviser, you will pay a sales commission if you buy shares in a Load Fund. • Taxes: During a typical year, most actively managed mutual funds sell anywhere from 20 to 70 percent of the securities in their portfolios. If your fund makes a profit on its sales, you will pay taxes on the income you receive, even if you reinvest the money you made. BABASAB PATIL 25
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”CONTENTS - Organization Profile - Sampling - Date Collection Methods - Measuring Tools BABASAB PATIL 26
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” RELIANCE MONEYThe Mutual FundAbout Reliance Mutual FundReliance Mutual Fund (RMF) has been established as a trust under the Indian Trusts Act, 1882with Reliance Capital Limited (RCL), as the Settlor/Sponsor and Reliance Capital Trustee Co.Limited (RCTCL), as the Trustee.RMF has been registered with the Securities & Exchange Board of India (SEBI) vide registrationnumber MF/022/95/1 dated June 30, 1995. The name of Reliance Capital Mutual Fund has beenchanged to Reliance Mutual Fund effective 11th. March 2004 vide SEBIs letter no.IMD/PSP/4958/2004 date 11th. March 2004. Reliance Mutual Fund was formed to launchvarious schemes under which units are issued to the Public with a view to contribute to thecapital market and to provide investors the opportunities to make investments in diversifiedsecurities. BABASAB PATIL 27
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”The main objectives of the Trust are : • To carry on the activity of a Mutual Fund as may be permitted at law and formulate and devise various collective Schemes of savings and investments for people in India and abroad and also ensure liquidity of investments for the Unit holders; • To deploy Funds thus raised so as to help the Unit holders earn reasonable returns on their savings • To take such steps as may be necessary from time to time to realize the effects without any limitationVision, Mission & Market Strategy Vision statement – “Empowering everyone to live their dream” Mission statement- “To offer unparalleled value by providing the customer transparent, convenient and effective anytime-anywhere integrated financial transaction capability” Marketing strategy- to provide  Simple, easy-to-understand, safe and secure trading platform/software  Uncomplicated, easy-to-understand brokerage/trading cost structure without any riders BABASAB PATIL 28
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”  Easy access to the financial market through convenient modes of distribution  Sound, genuine, unbiased advise individual investments.Detail Study about the companyThe easiest, fastest and most convenient way to carry out your financial transactions is now atyour fingertips! Reliance Money offers you the widest range of asset classes to trade in: Equity,Derivatives, Commodities and Forex. Also invest on-line in Mutual Funds, IPOs and Insuranceproducts (Life & General). All this through one single window. Reliance Money is a state-of-the-art financial transaction platform, which enables you to conduct your financial transactions incost effective, convenient and secure manner. Reliance Money has introduced several never .before features and thereby changed the way you will invest:1. Flat Fees instead of Brokerage - Put your money into investments, not into brokerage. Pay aflat fee of Rs. 500/- and transact as much you want upto Rs. 1crore or for 2 months (whichever isearlier). It.s never happened before anywhere in the world!2. Trading Kiosks - No matter if you don.t have access to a computer or the Internet. You willfind exclusive Reliance Money Trading Kiosks at convenient locations throughout your city.These internet-enabled Kiosks bring the market to you, wherever you are.3. Security Token - The Reliance Money security token is so hi-tech, it almost defies belief.This small, portable plastic device flashes a unique number that changes every 36 seconds,ensuring that the number used for an earlier transaction is discarded. This number works overand above your normal login and password, serving as a third level of protection that guaranteesyour account total safety. BABASAB PATIL 29
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”4. Call N Trade - You don.t have to access your computer to trade or invest.With our Call NTrade facility, you can place orders over the phone.5. Multiple Offerings - Along with equity, you can also trade / invest in Commodities (gold,silver, base metals and other agri commodities to name a few), Derivatives, Forex (RBI allowsyou to remit US$25,000 per calendar year), Mutual Funds, IPOs and Insurance products (Life &General).6. Widest Network: Reliance Money has a network of branches all over the country withassociates who will assist you with your financial investment requirements.7. Other value - added Services: -Reliance Money provides:• Research, market views and stock views from independent experts, with an enviable track record• LIVE news from Dow Jones, Capital Market and Commodities Control• CEOs. / experts. views on economy and the financial market• Personal Finance planning tools that help you plan your investments, retirement, tax etc.• Portfolio Tracker that will help you track your investments from one single screen• Risk Analyzer to analyz e your risk profile and get a suitable investment portfolio plan using our Asset Allocator.• Knowledge Centre will help you understand investing and trading basics and also delve into advanced concepts like trading strategies• Market Watch, a unique tool that will help you track your favorite companies. Just BABASAB PATIL 30
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” configure it and get real time quotes, news, views, result etc. Our technology allows you todetach it from the main screen and place it on your desktop.Products and ServicesA product for every need: Reliance Money is the most comprehensive platform which allowsyou to invest in Shares, Mutual Funds, Derivatives (Futures & Options), Commodities, Forex,IPOs, Insurance and other financial products. Simply put, we offer you a product for almostevery investment need.Investing in Mutual Funds:Reliance Money brings you a unique, hassle-free and paperless way to invest in Mutual Funds.You can now invest on-line in Mutual Funds through Reliance Money No more fillingapplication forms manually or any going through other paperwork. You need no signatures orproof of identity for investing. Once you place a request for investing in a particular fund, thereare no manual processes involved. Your bank funds are automatically debited or credited whilesimultaneously crediting or debiting your unit holdings.You also get control over yourinvestments with on-line order confirmations and order status tracking. You get to know theperformance of your investments through online updation of your portfolio with current NAVs.Reliance Money offers you various options while investing in Mutual Funds:Purchase: Buying of Mutual Fund units is very convenient without the hassles of filling in theapplications manually. Redemption: As with Purchases, redemptions too can be done online.Switch: You can shift money from one scheme to another in the same mutual fund house, withthe click of a button. BABASAB PATIL 31
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”Reliance Mutual FundsEquity Schemes :Reliance Equity Fund :(An open-ended diversified Equity Scheme.) The primary investment objective of the scheme isto seek to generate capital appreciation & provide long-term growth opportunities by investing ina portfolio constituted of equity & equity related securities of top 100 companies by marketcapitalization & of companies which are available in the derivatives segment from time to timeand the secondary objective is to generate consistent returns by investing in debt and moneymarket securities.Reliance Tax Saver (ELSS) Fund :(An Open-ended Equity Linked Savings Scheme.) The primary objective of the scheme is togenerate long-term capital appreciation from a portfolio that is invested predominantly in equityand equity related instruments.Reliance Equity Opportunities Fund :(An Open-Ended Diversified Equity Scheme.) The primary investment objective of the schemeis to seek to generate capital appreciation & provide long-term growth opportunities by investingin a portfolio constituted of equity securities &equity related securities and the secondaryobjective is to generate consistent returns by investing in debt and money market securities. BABASAB PATIL 32
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”Reliance Vision Fund :(An Open-ended Equity Growth Scheme.) The primary investment objective of the Scheme is toachieve long term growth of capital by investment in equity and equity related securities througha research based investment approach.Reliance Growth Fund :(An Open-ended Equity Growth Scheme.) The primary investment objective of the Scheme is toachieve long term growth of capital by investment in equity and equity related securities througha research based investment approach.Reliance Index Fund :(An Open Ended Index Linked Scheme.) The Investment Objective under the Nifty Plan is toreplicate the composition of the Nifty, with a view to endeavor to generate returns, which couldapproximately be the same as that of Nifty. The Investment Objective under the Sensex plan is toreplicate the composition of the Sensex, with a view to endeavor to generate returns, which couldapproximately be the same as that of Sensex.Reliance NRI Equity Fund :(An open-ended Diversified Equity Scheme.) The Primary investment objective of the scheme isto generate optimal returns by investing in equity or equity related instruments primarily drawnfrom the Companies in the BSE 200 Index.Debt/Income Schemes BABASAB PATIL 33
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”The aim of income funds is to provide regular and steady income to investors. Suchschemes generally invest in fixed income securities such as bonds, corporate debentures,Government securities and money market instruments. Such funds are less risky comparedto equity schemes. These funds are not affected because of fluctuations in equity markets.However, opportunities of capital appreciation are also limited in such funds. The NAVs ofsuch funds are affected because of change in interest rates in the country. If the interest ratesfall, NAVs of such funds are likely to increase in the short run and vice versa.However, long term investors may not bother about these fluctuations.Debt Schemes :Reliance Monthly Income Plan :(An Open Ended Fund. Monthly Income is not assured & is subject to the availability ofdistributable surplus ) The Primary investment objective of the Scheme is to generate regularincome in order to make regular dividend payments to unitholders and the secondary objective isgrowth of capital.Primarily the investment shall be made in debt and money market securities(i.e. 80%) with a small exposure (i.e. upto 20%) in equity.Reliance Gilt Securities Fund - Short Term Gilt Plan & Long Term Gilt Plan:Open-ended Government Securities Scheme) The primary objective of the Scheme is to generateOptimal credit risk-free returns by investing in a portfolio of securities issued and guaranteed bythe central Government and State Government BABASAB PATIL 34
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”Reliance Income Fund :(An Open-ended Income Scheme) The primary objective of the scheme is to generate optimalreturns consistent with moderate levels of risk. This income may be complemented by capitalappreciation of the portfolio. Accordingly, investments shall predominantly be made in Debt &Money Instruments.Reliance Medium Term Fund :(An Open End Income Scheme with no assured returns.) The primary investment objective of theScheme is to generate regular income in order to make regular dividend payments to unitholdersand the secondary objective is growth of capitalReliance Short Term Fund :(An Open End Income Scheme) The primary investment objective of the scheme is to generatestable returns for investors with a short investment horizon by investing in Fixed IncomeSecurities of short term maturity.Reliance Liquid Fund :(Open-ended Liquid Scheme). The primary investment objective of the Scheme is to generateoptimal returns consistent with moderate levels of risk and high liquidity. Accordingly,investments shall predominantly be made in Debt and Money Market Instruments.Reliance Fixed Term Scheme : BABASAB PATIL 35
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”(Close-ended Income Scheme) The primary objective of the Scheme is to seek to achieve regularreturns / growth of capital by investing in a portfolio of fixed income securities normallymaturing in line with the time profile of the plan with the objective of limiting interest ratevolatility.Reliance Floating Rate Fund :(An Open End Income Scheme) The primary objective of the scheme is to generate regularincome through investment in a portfolio comprising substantially of Floating Rate DebtSecurities (including floating rate securitized debt and Money Market Instruments and FixedRate Debt Instruments swapped for floating rate returns). The scheme shall also invest in Fixedrate debt Securities (including fixed rate securitised debt, Money Market Instruments andFloating Rate Debt Instruments swapped for fixed returnsReliance NRI Income Fund :(An Open-ended Income scheme) The primary investment objective of the Scheme is to generateoptimal returns consistent with moderate levels of risks. This income may be complimented bycapital appreciation of the portfolio. Accordingly, investments shall predominantly be made indebt Instruments.Reliance Fixed Maturity Fund - Series I :(A Close Ended Income Scheme) The primary investment objective of the Scheme is to seek toachieve regular returns / growth of capital by investing in a portfolio of fixed income securitiesnormally maturing in line with the time profile of the Plan with the objective of limiting interestrate volatility. BABASAB PATIL 36
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”Reliance Fixed Maturity Fund - Series II :(A closed ended Income Scheme) The primary investment objective of the Scheme is to seek toachieve growth of capital by investing in a portfolio of fixed income securities normallymaturing in line with the time profile of the respective plans.Reliance Liquidity Fund :(An Open - ended Liquid Scheme) The investment objective of the Scheme is to generateoptimal returns consistent with moderate levels of risk and high liquidity. Accordingly,investments shall predominantly be made in Debt and Money Market Instruments.Debt Option : The primary investment objective of this plan is to generate optimal returnsconsistent with moderate level of risk. This income may be complemented by capitalappreciation of the portfolio. Accordingly investments shall predominantly be made in Debt &Money Market Instruments.Equity Option : The primary investment objective is to seek capital appreciation and orconsistent returns by actively investing in equity / equity related securities.Sector Specific SchemesThese are the funds/schemes which invest in the securities of only those sectors or industries asspecified in the offer documents. e.g. Pharmaceuticals, Software, Fast Moving Consumer Goods(FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performanceof the respective sectors/industries. While these funds may give higher returns, they are BABASAB PATIL 37
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”more risky compared to diversified funds. Investors need to keep a watch on the performanceof those sectors/industries and must exit at an appropriate time.Sector Specific SchemesSector Funds are specialty funds that invest in stocks falling into a certain sector of the economy.Here the portfolio is dispersed or spread across the stocks in that particular sector. This type ofscheme is ideal for investors who have already made up their mind to confine risk and return to aparticular sectorReliance Banking FundReliance Mutual Fund has an Open-Ended Banking Sector Scheme which has the primaryinvestment objective to generate continuous returns by actively investing in equity / equityrelated or fixed income securities of banks.Reliance Diversified Power Sector FundReliance Diversified Power Sector Scheme is an Open-ended Power Sector Scheme. Theprimary investment objective of the Scheme is to seek to generate consistent returns by activelyinvesting in equity / equity related or fixed income securities of Power and other associatedcompanies.Reliance Pharma FundReliance Pharma Fund is an Open-ended Pharma Sector Scheme. The primary investmentobjective of the Scheme is to generate consistent returns by investing in equity / equity related orfixed income securities of Pharma and other associated companies.Reliance Media & Entertainment Fund BABASAB PATIL 38
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”Reliance Media & Entertainment Fund is an Open-ended Media & Entertainment sector scheme.The The primary investment objective of the Scheme is to generate consistent returns byinvesting in equity / equity related or fixed income securities of media & entertainment and otherassociated companies.NAV or Net Asset Value of the fund is the cumulative market value of the assets of the fund netof its liabilities. NAV per unit is simply the net value of assets divided by the number of unitsoutstanding. Buying and selling into funds is done on the basis of NAV-related prices. NAV iscalculated as follows:NAV= Market value of the fund’s investments+Receivables+Accrued Income.Liabilities-Accrued Expenses BABASAB PATIL 39
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”Methodology Data sources : • Primary Data: Primary data was collected by administering questionnaire. It is systematic collection of information directly from the Reliance Mutual Fund Investors . The basic purpose of collecting primary data is to know the preferred Equity Schemes of Reliance Mutual funds • Secondary data: Secondary data’s are collected from Reliance website, financial journals, recent Fact sheet of Reliance mutual fund relating to mutual funds Sampling Sample size: 50 Reliance Mutual fund Investors Area of research: Belgaum City. Research approach: Survey method. Research Instrument: Questionnaire. .] BABASAB PATIL 40
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”CONTENTS - Results & Discussion with Charts & Graphs - Summary, Conclusion & a Proposed Action Plan with Resource Requirements & Projected Benefits to the Organization BABASAB PATIL 41
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”PERFORMANCECOMPARISM OFMUTUAL FUNDSCHEMES BABASAB PATIL 42
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”Equity diversified schemes There is lot of variety schemes offered by AMCs. Equity diversified is one of the schemeoffered by the AMC .the selection criteria of schemes is totally depend on the fund size and ageof the fund. The scheme, which has the corpus value, is more than 500Crs . The following are the equity-diversified schemes in the selected funds. at the current dateas 06/03/07Tables for fund sizeReliance Mutual Fund Equity schemes Scheme name Fund size DOI FUND CLASS Reliance Equity Fund (G) 4359.6 03/07/06 ED Reliance Equity Opportunities Fund (G) 2385.65 03/07/05 ED Reliance Growth Fund (G) 3263.71 09/08/95 ED Reliance Vision Fund (G) 2473.68 09/07/95 ED Reliance Tax Saver (ELSS) Fund (G) 1501.78 08/23/05 ETS BABASAB PATIL 43
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” 1. Return: Returns (annualized) 5yrs DOI AvgName of Scheme (30/03/07) return 1 yr 2yr 3yr 4yr 5yrReliance Growth Fund (G) 199.52 48.21 93.23 80.40 27.21 53.64 60.54Reliance Vision Fund (G) 137.65 50.45 62.62 60.56 34.41 81.42 57.89Reliance Tax Saver (ELLS)Fund(G) 115.193 47.48 106.91 53.02 29.77 18.07 51.05Reliance EquityOpportunities Fund (G) 45.4206 48.24 63.85 70.46 32.17 -2.24 42.50Reliance Equity Fund (G) 26.52 32.47 39.03 28.00 9.97 0.00 27.37 NAVt – NAVt-1 Portfolio return: Rit =--------------------------------- NAV t-1 Where Rit is the difference between Net Asset Values for two consecutive days dividend by the NAV of the preceding day. BABASAB PATIL 44
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” 2. Risk  BetaScheme name 5 years avg return* BetaReliance Growth Fund (G) 60.54 0.91Reliance Vision Fund (G) 57.89 0.98Reliance Tax Saver (ELLS) Fund(G) 51.05 0.93Reliance Equity Opportunities Fund (G) 42.50 0.96Reliance Equity Fund (G) 27.37 0.94 * Returns are annualized β = nΣ xy-(Σ x)( Σ y) nΣx2-(Σx) 2 Where n= number of days X =rolling returns of the NSE index Y= rolling returns of the schemes Beta describes the relationship between the stock’s return and the index returns. it describes the risk in the portfolio with comparing market risk as 1 . If beta =1 One percent changes in market index return causes exactly one percent change in the stock returns. it indicates that the stock moves in tandem with the market . BABASAB PATIL 45
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” If Beta <1 Then the stock is less volatile compared to the market. If Beta >1Then the stock is more volatile compared to the market. The stock valueWith more then 1 beta value is considered to be risky.If Beta –ve: native Beta indicates that the stock returns moves in the opposite direction to themarket return.Standard deviation BABASAB PATIL 46
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” It is used to measure the variation in individual returns from the average expected returns over a certain period. Standard deviation is used in the concept of risk of a portfolio of investments. Higher standard deviation means a greater fluctuation in expected return. Returns (annualized) 5yrs DOI AvgName of Scheme (30/03/07) return 1 yr 2yr 3yr 4yr 5yr SDReliance Growth Fund (G) 199.52 48.21 93.23 80.40 27.21 53.64 60.54 23.55Reliance Vision Fund (G) 137.65 50.45 62.62 60.56 34.41 81.42 57.89 15.43Reliance Tax Saver(ELLS) Fund(G) 115.193 47.48 106.91 53.02 29.77 18.07 51.05 30.59Reliance EquityOpportunities Fund (G) 45.4206 48.24 63.85 70.46 32.17 -2.24 42.50 26.00Reliance Equity Fund (G) 26.52 32.47 39.03 28.00 9.97 0.00 27.37 14.59Standard deviation (SD) =/ var Where Var = variance Var= Σ p (ri-E(r)) 2 Return & Risk BABASAB PATIL 47
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” 5 yrs avgName of Scheme DOI(30/03/07) returns sd betaReliance Growth Fund (G) 3263.71 60.54 23.55 0.91Reliance Vision Fund (G) 2473.68 57.89 15.43 0.98Reliance Tax Saver (ELLS) Fund(G) 1501.78 51.05 30.59 0.93Reliance Equity Opportunities Fund (G) 2385.65 42.50 26.00 0.96Reliance Equity Fund (G) 4359.6 27.37 14.59 0.94Sharpe’s BABASAB PATIL 48
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” Sharpe’s index measures the risk premium of the portfolio relative to the total amt of riskin the portfolio. This risk premium is the difference between the portfolio’s average rate of returnand the risk less rate of return. The index assigns the highest values to assets that have best risk-adjusted average rate of returns. 5 yrs avg returnsName of Scheme DOI(30/03/07) rp rf sd stReliance Growth Fund (G) 3263.71 60.54 8 23.55 2.23Reliance Vision Fund (G) 2473.68 57.89 8 15.43 3.23Reliance Tax Saver (ELLS) Fund(G) 1501.78 51.05 8 30.59 1.40Reliance Equity Opportunities Fund (G) 2385.65 42.50 8 26.00 1.33Reliance Equity Fund (G) 4359.6 27.37 8 14.59 1.32Wherest =Sharpe’s indexRp=portfolio returnRf=Risk free rate of return (8 %)SD= standard deviation of the port folio St= RP-Rf SD BABASAB PATIL 49
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” Sharpes Ranking to Reliance Equity Diversified Schemes Reliance Growth 3.5 Fund (G) 3 2.5 Reliance Vision Performance Fund (G) 2 1.5 Reliance Tax Saver (ELLS) Fund(G) 1 0.5 Reliance Equity 0 Opportunities Fund (G) Sharpe’s Reliance Equity Schemes Fund (G)Interpretation: Reliance Vision Fund (G) is performing well and is ranked No 1 according to Sharpe’s asit is giving higher returns compared to other Schemes.Treynor’s Index: 5 yrs avg returnsName of Scheme DOI(30/03/07) rp rf Beta tnReliance Growth Fund (G) 3263.71 60.54 8 0.91 57.74 BABASAB PATILReliance Vision Fund (G) 2473.68 57.89 8 0.98 50.91Reliance Tax Saver (ELLS) Fund(G) 1501.78 51.05 8 0.93 46.29 50Reliance Equity Opportunities Fund (G) 2385.65 42.50 8 0.96 35.94Reliance Equity Fund (G) 4359.6 27.37 8 0.94 20.61
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”In Treynor’s higher the ratio higher the performance.Tn =Treynor’s indexRp=portfolio returnRf=Risk free rate of return (8 %)Formula Tn= RP-Rf Beta BABASAB PATIL 51
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” Treynors Ranking on Reliance Equity Diversified Fund Reliance Growth 70 Fund (G) 60 Reliance Vision 50 Fund (G) 40 Reliance Tax 30 Saver (ELLS) 20 Fund(G) 10 Reliance Equity Opportunities 0 Fund (G) Treynor’s Reliance Equity Schemes Fund (G)Interpretation: Reliance Growth Fund (G) is performing well and is ranked No 1 according to Treynor’sindex as it is giving higher returns compared to other Schemes according to him and also therisk involved is less BABASAB PATIL 52
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”Performance Evaluation Tables DOIName of the scheme (30/06/06) Rp Beta SD Sharpe’s Treynor’sReliance Growth Fund (G) 3263.71 60.54 0.91 23.55 2.23 57.74Reliance Vision Fund (G) 2473.68 57.89 0.98 15.43 3.23 50.91Reliance Tax Saver (ELLS)Fund(G) 1501.78 51.05 0.93 30.59 1.40 46.29Reliance Equity OpportunitiesFund (G) 2385.65 42.50 0.96 26.00 1.33 35.94Reliance Equity Fund (G) 4359.6 27.37 0.94 14.59 1.32 20.61Analysis of Survey BABASAB PATIL 53
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”1.Sources from Investors came to know about Reliance Mutual fund Frequency Percent Valid Percent Cumulative Percent Valid Friends/Relatives 12 24.0 24.0 24.0 Newspapers/ 7 14.0 14.0 38.0 Televisions Brokers/Agents 16 32.0 32.0 70.0 Financial 15 30.0 30.0 100.0 Consultants Total 50 100.0 100.0 Sources from Investors came to know about Relaince Mutual fund 20 10 Frequency 0 Friends/Relatives Brokers/Agents New spapers/Televisio Financial Consultant Sources from Investors came to know about Relaince Mutual fundInterpretation: For the popularity of the mutual funds all the means contributed all most equally but thedominated factor in these factors is advice from the Brokers/Agents, which contributed around32% followed by the financial agents at 30%.2.Reliance Schemes most preferred by investors BABASAB PATIL 54
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” Frequency Percent Valid Cumulative Percent PercentValid Equity 30 60.0 60.0 60.0 Debt 20 40.0 40.0 100.0 Total 50 100.0 100.0 Reliance Schemes most preferred by investors 40 30 20 Frequency 10 0 Equity Debt Reliance Schemes most preferred by investorsInterpretation: 60% of the respondents prefer equity schemes as investors now days are ready to riskbecause they are getting good returns, whereas 40% of the respondents prefer debt schemes.. 3a.Reliance equity fund BABASAB PATIL 55
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” Frequency Percent Valid Cumulative Percent PercentValid 1 9 18.0 18.0 18.0 2 1 2.0 2.0 20.0 4 30 60.0 60.0 80.0 5 10 20.0 20.0 100.0 Total 50 100.0 100.0 Reliance equity fund 70 60 50 40 30 20 Percent 10 0 1 2 4 5 Reliance equity fundInterpretation: Reliance equity fund is ranked 4th by majority of the Investors as the returns are not sohigh compared to the other Schemes of Equity. BABASAB PATIL 56
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”3b.Reliance equity Opportunity fund Frequency Percent Valid Cumulative Percent PercentValid 1 1 2.0 2.0 2.0 2 9 18.0 18.0 20.0 4 10 20.0 20.0 40.0 5 30 60.0 60.0 100.0 Total 50 100.0 100.0 Reliance equity Oppurtunity fund 70 60 50 40 30 20 Percent 10 0 1 2 4 5 Reliance equity Oppurtunity fundInterpretation: Reliance Equity opportunity fund is ranked 5th by 60% of the Investors investing in Reliancemutual fund as the returns are low and also riskier compared to other 4 schemes. BABASAB PATIL 57
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”3c.Reliance Growth fund Frequency Percent Valid Cumulative Percent PercentValid 1 26 52.0 52.0 52.0 2 3 6.0 6.0 58.0 3 18 36.0 36.0 94.0 4 3 6.0 6.0 100.0 Total 50 100.0 100.0 Reliance Growth fund 60 50 40 30 20 10 Percent 0 1 2 3 4 Reliance Growth fund BABASAB PATIL 58
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”3d. Reliance Vision fund Frequency Percent Valid PercentCumulative PercentValid 1 2 4.0 4.0 4.0 2 24 48.0 48.0 52.0 3 16 32.0 32.0 84.0 4 7 14.0 14.0 98.0 5 1 2.0 2.0 100.0 Total 50 100.0 100.0 Reliance Vision fund 60 50 40 30 20 10 Percent 0 1 2 3 4 5 Reliance Vision fund3e.Reliance Tax Saver-ELSS BABASAB PATIL 59
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” Frequency Percent Valid Cumulative Percent PercentValid 1 12 24.0 24.0 24.0 2 14 28.0 28.0 52.0 3 15 30.0 30.0 82.0 5 9 18.0 18.0 100.0 Total 50 100.0 100.0 Reliance Tax Saver-ELSS 40 30 20 4a. Safety 10 Frequency Per Percent Valid 1 10 20. 0 2 33 66. 1 2 3 5 5 2 4.0 6 5 10. Reliance Tax Saver-ELSS Total 50 100 BABASAB PATIL 60
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” Safety 70 60 50 40 30 20 Percent 10 0 1 2 5 6 SafetyInterpretation: Out of the 50 respondents 66 % of them have rated 2 to safety because every investorsneeds safety in his investment made but also some of them have given least preference to safetybecause as we know “higher the risk higher the return”.4b. Rate of Return Frequency Percent Valid Cumulative Percent PercentValid 1 33 66.0 66.0 66.0 2 9 18.0 18.0 84.0 3 1 2.0 2.0 86.0 4 2 4.0 4.0 90.0 5 5 10.0 10.0 100.0 Total 50 100.0 100.0 BABASAB PATIL 61
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” Rate of Return 70 60 50 40 30 20 Percent 10 0 1 2 3 4 5 Rate of ReturnInterpretation: 66% of the respondents have ranked rate of return as No 1 ranking this is because of thechanging trend where people are ready to take risk but they expect good returns and higher returneach time.4c. Liquidity Frequency Percent Valid Cumulative Percent PercentValid 1 2 4.0 4.0 4.0 2 1 2.0 2.0 6.0 3 9 18.0 18.0 24.0 4 26 52.0 52.0 76.0 5 12 24.0 24.0 100.0 Total 50 100.0 100.0 BABASAB PATIL 62
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” Liquidity 60 50 Interpretation: 40 Out of the 50 30 respondents 52% of 20 them have ranked Percent 10 0 liquidity as 4th , 1 2 3 4 5 Liquidity whereas only 10% ofthem have ranked 3rd which shows liquidity is given least preference when compared to otherfactors.4d. Tax Benefit Frequency Percent Valid Cumulative Percent PercentValid 2 2 4.0 4.0 4.0 3 26 52.0 52.0 56.0 4 9 18.0 18.0 74.0 5 1 2.0 2.0 76.0 6 12 24.0 24.0 100.0 Total 50 100.0 100.0 BABASAB PATIL 63
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” Tax Benefit 60 50 40 30 20 Percent 10 0 2 3 4 5 6 Tax BenefitInterpretation: 52% of the respondents have ranked 3rd for tax benefit which shows people giveimportance for tax benefit as it saves the investors money. 4e. Brand name Frequency Percent Valid Cumulative Percent PercentValid 2 5 10.0 10.0 10.0 3 2 4.0 4.0 14.0 4 13 26.0 26.0 40.0 5 18 36.0 36.0 76.0 6 12 24.0 24.0 100.0 Total 50 100.0 100.0 BABASAB PATIL 64
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” Brand name 40 30 20 10 Percent 0 2 3 4 5 6 Brand nameInterpretation: 36% of the respondents have ranked 5 th to Brand which shows importance is given tobrand name of the company in which investors are investing as it is shows the credit worthinessof the company.4f. Flexibility Frequency Percent Valid Cumulative Percent PercentValid 1 5 10.0 10.0 10.0 3 12 24.0 24.0 34.0 5 12 24.0 24.0 58.0 6 21 42.0 42.0 100.0 Total 50 100.0 100.0 BABASAB PATIL 65
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” Flexibility 50 40 30 20 10 Percent 0 1 3 5 6 FlexibilityInterpretation: 42% of the respondents have ranked 6th to Flexibility which shows not much importanceis given to flexibility as far as investors are getting good return from the schemes.5a. Reliance Mutual Fund Frequency Percent Valid Cumulative Percent PercentValid 1 14 28.0 28.0 28.0 2 34 68.0 68.0 96.0 4 2 4.0 4.0 100.0 Total 50 100.0 100.0 BABASAB PATIL 66
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” Reliance Mutual Fund 80 60 40 20 Percent 0 1 2 4 Reliance Mutual FundInterpretation: Majority of the respondents have ranked Reliance mutual funds as 2 nd when compared tothe other 4 companies so this shows that in a short span of time Reliance has made a good imagein the eyes of the investors.5b. HDFC Mutual Fund Frequency Percent Valid Cumulative Percent PercentValid 1 2 4.0 4.0 4.0 2 1 2.0 2.0 6.0 3 35 70.0 70.0 76.0 4 9 18.0 18.0 94.0 5 3 6.0 6.0 100.0 BABASAB PATIL 67
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” Total 50 100.0 100.0 HDFC Mutual Fund 80 60 40 20 Percent 0 1 2 3 4 5 HDFC Mutual FundInterpretation: Majority of the investors have ranked HDFC mutual fund as 3 rd when compared to othermutual fund so comparatively it is doing well.5c. Franklin Templeton Mutual Fund Frequency Percent Valid Percent Cumulative PercentValid 1 32 64.0 64.0 64.0 2 15 30.0 30.0 94.0 3 2 4.0 4.0 98.0 4 1 2.0 2.0 100.0 Total 50 100.0 100.0 BABASAB PATIL 68
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” Franklin templeton Mutual Fund 70 60 50 40 30 20 Percent 10 0 1 2 3 4 Franklin templeton Mutual FundInterpretation: Franklin has been ranked NO 1 mutual fund company by the respondents when comparedto the other mutual funds as it has maintained its returns over a long period of time.5d. UTI mutual Fund Frequency Percent Valid Cumulative Percent PercentValid 1 1 2.0 2.0 2.0 3 10 20.0 20.0 22.0 4 5 10.0 10.0 32.0 5 34 68.0 68.0 100.0 Total 50 100.0 100.0 BABASAB PATIL 69
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” UTI mutual Fund 80 60 40 20 Percent 0 1 3 4 5 UTI mutual FundInterpretation: Majority of the investors are not preferring UTI mutual funds as their returns are very lowwhen compared to their previous records and so it is been ranked 4th by the investors.5e. ICICI mutual fund Frequency Pe Valid 1 1 2.0 3 3 6.0 4 33 66. 5 13 26. ICICI mutual fund Total 50 100 70 60 50 Interpretation: 40 30 20 BABASAB PATIL Percent 10 0 70 1 3 4 5 ICICI mutual fund
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” Majority of the investors are not preferring UTI mutual funds as their returns are very lowwhen compared to other 3 companies but it is ranked 4th that shows it is performing good thanUTI mutual fund. Findings • 32% of the Investors have come to know about Reliance mutual fund through Brokers/Agents followed by 30% who have come to know through Financial Consultants • 60% of the Investors are giving more preference to Equity schemes as they are giving higher return whereas 40% of them prefer Debt Schemes because of the Safety they provide • 52% of the investors prefer Reliance Growth Fund followed by Reliance Vision Fund and other Schemes. • 66% of the investors give most importance to Rate of return as they expect higher and higher returns followed by Safety as it is also important aspect of investors. • Reliance Mutual Fund is Ranked 2nd by the Investors i.e. 68% of them have ranked Reliance as 2nd and Franklin Templeton is Ranked 1st. BABASAB PATIL 71
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” SUGGESTIONS • Holding a seminar and presentations or Investors meet in the stock broking firm help the investors to remove any misconception regarding the Mutual Fund and this will create awareness of Mutual fund. • Agents are the main person who influences the investment decision. Company can hire fresh graduates train them and sponsor for the AMFI exam just like insurance companies who conduct IRDA training. This will increase the feet on street for the mutual fund companies. • Company has to provide timely services to its customers so that it can compete with its competitors like Franklin Templeton and HDFC.CONCLUSION After the analysis made on the performance of Equity Schemes of Reliance Mutual Fund I can conclude that Equity schemes are most preferred by Investors and overall BABASAB PATIL 72
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” Reliance Vision Fund and Reliance Growth scheme are doing extremely well in the market satisfying the customer wants of high returns and also through survey conducted it is clear that Reliance is performing quite well so it has been ranked 2nd among the selected companies. From the study we also came to know that according to Sharpe ‘s Reliance Vision fund is ranked First but according to Treynor’s Reliance growth fund is ranked First.CONTENTS - QUESTIONAREE BABASAB PATIL 73
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” - ANNEXURE - BIBLOGRAPHY QUESTIONNAIREDear Sir/Madam: Personal Details: • Name : _____________________________________________ • Address : _____________________________________________ • Occupation : _____________________________________________ • Contact No : _____________________________________________ BABASAB PATIL 74
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” 1. How did you come to know about Reliance mutual Fund? Friends /Relatives News papers / magazines Brokers/Agents Financial consultants. Other_________________________ 2. Which Schemes of Reliance Mutual fund would you prefer the most? Equity Schemes Debt Scheme 3. Which Equity Scheme you prefer the most in Reliance Mutual Fund? (Rank them from 1 to 5, 1 being the most preferred and 5 being the least) Reliance Growth [ ] Reliance Vision Fund [ ] Reliance Equity Opportunity Fund [ ] Reliance Tax Saver (ELSS) Fund [ ] Reliance Equity Fund [ ] 4. What factors do you consider while investing in mutual fund? (Rank them from 1 to 6. No1 for preferred and No 6 for least preferred) Safety Rate of return Liquidity Tax benefit Flexibility Brand Name 5. How would you rate Reliance mutual fund when compared to the other mutual Fund? (Rank them from 1 to 5, 1 being the Highest & 5 being the lowest). BABASAB PATIL 75
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” Reliance [ ] HDFC [ ] Franklin Templeton [ ] UTI [ ] Pru ICICI [ ] THANK YOU Annexure Details about top schemes RELIANCE VISION FUNDStructure Open ended Equity Growth SchemeInception Date 08/10/1995Corpus 2473.68 croreMinimum Invst 5000Fund Manager Ashwini KumarEntry Load 2.25%Exit Load NilInvestment Objective The primary investment objective of the scheme is to achieve long-term growth of capital by investment in equity and equity-related securities through a research-based investment approach. BABASAB PATIL 76
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” RELIANCE GROWTH FUNDStructure Open ended Equity Growth SchemeInception Date 08/10/1995Corpus 3263.71Minimum Invst 5000Fund Manager Sunil SinghaniaEntry Load 2.25%Exit Load NilInvestment Objective The primary investment objective of the scheme is to achieve long-term growth of capital by investing in equity and equity related securities through a research-based investment approach. BABASAB PATIL 77
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” RELIANCE TAX SAVER FUNDStructure Open ended Equity Growth SchemeInception Date 22/09/2005Corpus 1501.78Minimum Invst 500Fund Manager Ashwani KumarEntry Load 2.25%Exit Load NilInvestment Objective The primary objective of the scheme is to generate long-term capital appreciation from a portfolio that is invested predominantly in equity and equity-related instruments. BABASAB PATIL 78
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” RELIANCE EQUITY OPPURTUNITY FUNDStructure Open ended Equity Growth SchemeInception Date 31/03/2005Corpus Rs 2,385.65 croreMinimum Invst 5000Fund Manager . Sailesh Raj BhanEntry Load 2.25%Exit Load NilInvestment Objective The primary investment objective of the scheme is to seek to generate capital appreciation and provide long-term growth opportunities by investing in a portfolio constituted of equity securities & equity-related securities and the secondary objective is to generate consistent returns by investing in Debt and Money Market securities. BABASAB PATIL 79
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.” RELIANCE EQUITY FUNDStructure Open ended Equity Growth SchemeInception Date 30/03/2006Corpus Rs 4359.6 croreMinimum Invst 5000Fund Manager . Sailesh Raj BhanEntry Load 2.25%Exit Load NilInvestment Objective The primary investment objective of the scheme is to seek to generate capital appreciation and provide long-term growth opportunities by investing in a portfolio constituted opportunities by investing in a portfolio constituted of equity and equity related securities of top 100 companies by market capitalization and of companies which are available in the derivatives segment from time to time and the secondary objective is to generate consistent returns by investing in debt and money market securities. BABASAB PATIL 80
    • “Comparative study on performance of Equity Schemes of Reliance Mutual Fund.”Bibliography • Reliance Fact Sheets • Invest smart financial Journal Websites - www.myris.com - www.reliancemf.com - www.equitymaster.com BABASAB PATIL 81