Portfolio Management Services in Mutual Funds

PORTFOLIO MANAGEMENT SERVICES IN MUTUAL FUNDS

SUMMER PROJECT REPORT


Prepared for the Mumbai University in the partial fulfillment of the
requirement for the award of the degree in

MASTERS OF MANAGEMENT STUDIES

Submitted By:

Name: BINU PAUL VILLAN
Roll No.: 68 Year: 2012

Under the guidance of
DR. S. P. DAS
SFIMAR

St Francis Institute of Management and Research, Mt. Poinsur,
S.V.P Road, Borivali (W) Mumbai.

Batch 2011-2013

St. Francis Institute of Management and Research Page 1


DECLARATION

I hereby declare that the following project report titled "Portfolio Management
Services in Mutual Funds" is an authentic work done by me.
This is to declare that all the work indulged in the completion of this work such as
research, data collection, analysis is a profound and honest work of mine.

Binu Paul Villan Dr. S. P Das
Student Project Guide

Date:
Place: Mumbai



ACKNOWLEDGEMENT

This project bears imprint of all those who have directly or indirectly helped and extended their
kind support in completing this project.

I would like to express my sincere gratitude to Mr. Sanjay Tari and Ms. Swapnila Shet, Director
at Acensure Financial Solutions Pvt. Ltd for giving me this opportunity to undergo this lucrative
project and for their encouraging and kind support throughout the project.

I am extremely thankful and obliged to Dr. S. P. Das (Project Guide) for practical tips,
encouragement to take on challenging assignments and constant guidance since inception, till
the completion of the project.

I would also thank Acensure Financial Solutions Pvt. Ltd employees and customers, whom I
met during the course of this project, for their support and for providing valuable information,
which helped me, complete this project successfully.

This project report is a collective effort of all and I sincerely remember and acknowledge all of
them for their excellent help and assistance throughout the project.

BINU PAUL VILLAN



EXECUTIVE SUMMARY

Investing money where the risk is less has always been risky to decide. The first factor, which
an investor would like to see before investing, is risk factor. Diversification of risk gave birth
to the phenomenon called Mutual Fund.

The Mutual Fund Industry is in the growing stage in India, which is evident from the flood of
mutual funds offered by the Banks, Financial Institutes & Private Financial Companies.

As a part of my study curriculum it is necessary to conduct a grand project. It provides me an
opportunity to understand the particular topic in depth and which leads to that topic.

My Project topic is Portfolio Management services in Mutual Funds which give special emphasis
on creation of Portfolio’s, Portfolio revision and Comparison of Mutual Funds with various
Performance measures.

In Portfolio Management it is very important to manage investor’s portfolio efficiently. By
efficient we mean which reduces the risk of investor and increases return on the other hand.
This project is all about how to manage an Investor’s portfolio in mutual fund. How to
diversify the investments into different schemes of funds

My First Phases covers mutual fund industry, current economic condition of the economy, brief
introduction to portfolio Management services, investor’s behavior and types, their objective, risk
appetite.
My Second Phase covers creation of Portfolio’s as per different type of Investor, Portfolio
revision and Comparison of Mutual Funds with various Performance measures.



TABLE OF CONTENTS

SR. NO PARTICULARS PAGE NO

1 Introduction to Acensure Financial Solutions Pvt. Ltd 1
1.1 Organization chart 2
1.2 Products & Services 3
2 Need for the study 5
3 Objectives of the study 6
4 Research methodology 7
4.1 Research Design 7
4.2 Data collection method 7
4.3 Sample design 7
4.4 Null Hypothesis 7
5 5.1 Introduction to Mutual Funds 8
5.2 History of Mutual Funds 9
5.3 Organization of mutual funds 11
5.4 Types of Mutual funds 11
5.5 Fund Management 13
6 Introduction to Portfolio Management Services 14
6.1 Phases of Portfolio Management 14
6.2 Types of Portfolio Management 16
6.3 Managing Portfolio 17
6.4 Investor Types 18
6.5 SEBI Guidelines for PMS 20
7 Data Analysis 21
7.1 Interpretation 24
8 Portfolio creation 25
8.1 Aggressive Portfolio 25
8.2 Conservative Portfolio 26
8.3 Balanced Portfolio 27
9 Portfolio revision 28
9.1 Constant Rupee Plan 29
9.2 Constant Ratio Plan 35
9.3 Variable Plan 40
9.4 Calculation of returns 46
10 Mutual fund comparison & Rankings 47
11 Limitations & Future Scope 56
12 Findings & Suggestions 57
13 My Learning 58
14 Conclusion 59
15 References 60



LIST OF TABLES

1 Aggressive Investor Portfolio 25
2 Conservative Investor Portfolio 26
3 Balanced Investor Portfolio 27
4 Portfolio Revision As Per Constant Rupee Plan 29
4.1 Portfolio as on May 2nd 2012 29
4.2 Revised Portfolio as on May 15th 2012 30
4.4 Revised Portfolio as on June 15th 2012 32
4.5 Portfolio as on June 29th 2012 34
4.6 Calculation of returns as per Constant rupee plan 34
5 Portfolio revision as per Constant ratio plan 35
5.1 Portfolio as on 2nd May 2012 35
5.2 Revised Portfolio as on may 15th 2012 36
5.3 Revised Portfolio as on May 31st 2012 37
5.6 Calculation of Returns as Per Constant Ratio Plan 39
6 Portfolio Revision as per Variable plan 40
6.1 Portfolio as on 2nd May 2012 40
6. 6.6 Calculation of returns as per Variable plan 45
7 Calculation of Portfolio Returns 46
8 Sharpe ratio 52
9 Treynor ratio 53
10 Standard Deviation 54
11 Rankings as per Sharpe ratio & Treynor Ratio 55
12 Rankings as per Standard deviation 55



LIST OF FIGURES


1 Corporate Logo 1
1.1 Information on department 2
1.2 Products &services 3
2 Mutual fund 8
2.1 History of mutual fund 10
2.2 Organization of a Mutual fund 11
2.3 Types of mutual funds 11
2.4 Types of Portfolio Management 16
3 3.1 Aggressive Investor Portfolio 19
3.2 Conservative Investor Portfolio 19
3.3 Balanced Investor Portfolio 19
4 4.1 Demographics 21
4.2 Age group 21
4.3 Monthly income 22
4.4 Expected liquidation period 22
4.5 Expected return 22
4.6 Decrease in Portfolio 23
4.7 Portfolio Allocation 23
4.8 Capital or Return preference 23
5 5.1 HDFC Top 200 return Performance 50
5.2 ICICI Prudential Focused Bluechip Equity Fund Return 50
5.3 DSP Blackrock Small and Midcap Fund Return 50
5.4 Franklin India Bluechip Return 51
5.5 Reliance Banking Fund Return 51



1. COMPANY PROFILE

Fig 1: Company Logo

Acensure is an integrated financial services group offering a wide range of services to a
significant clientele that includes Corporate, HNI’s and Retail Investors.
We have grown since inception and still growing in the financial field and the minds of our
clients. The value of integrity, team work, innovation, performance and partnership shape our
vision and drive us to our purpose. We are steadily but surely ascending the finance market.

AFFILIATIONS:

 LIC the No.1 Life Insurer of India.
 United India one of the topmost in Non-life Insurance Sector
 iFAST financial Singapore’s No.1 Integrated Wealth Management platform
 Karvy Stock Broking Ltd. – the No.1 Broking firm in India
 Disha Direct – The Pioneers in the Second Home Segments
 Apollo Munich – the topmost in Health Insurance Sector
 Star health - the topmost in Health Insurance Sector
 Bajaj Allianz – No.1 In Motor Insurance Sector



1.1 ORGANIZATION CHART

ACENSURE FINANCIAL
SOLUTIONS PVT. LTD

Administration Marketing
Backoffice
Dept Dept

They pass the entry They bring new clients
Looks after the regarding collection of for the company and
accounts of the clients premium. and also conduct customer
and checks the account update the clients Relationship
database. Management activity

Fig 1.1: information on department

Credentials In Different Hues

 Member Million Dollar Round Table (MDRT)– USA (Since last 5 years)
 Member Chairman’s Club(CM) of LIC (since last 6 years)
 Member Chartered Insurance Institute (CII)-UK(Since last 5 years)
 Member Indian Financial Planners Association(IFPA)—Life Member



1.2 PRODUCT & SERVICES

Life Insurance Solutions

Mutual Funds

Fig 1.2 Products &services

 Advisors For All The Below Mentioned Products
 Investment and Advisory services



 Non-Life Insurance Products
 Specialised Services for NRI’s
 Thorough Market Research Support to clients
 IPO’s, Bonds, Company FD’s
 Real Estate (1st Homes, 2nd Homes, Plots etc)
 Loans (Home, Personal, Project etc….)
 Holiday homes and Recreation Resorts
 Share Trading and Broking

Projected Goals:
 Making Acensure into Rs.5000 crores Group by 2020.
 Setting up of 100+ offices.
 Acquiring Corporate Broking License.
 Investing in Real Estate in the form of Second Homes, Resorts And Holiday Homes.
 And Creating an Earning Platform

Contact Details
Acensure Financial Solution Pvt Ltd

Mr. Sanjay Tari
No. 2, Sheetal Apartment, Kulupwadi, Borivali,( East)

Telephone +(91)-(22)-65350012

Mobile +(91)9821788989, 9870766657

Fax No +(91)-(22)-28846086

Website www.acensurefinance.com



2. NEED FOR THE STUDY

Portfolio management services is becoming a rapidly growing area serving a broad array of
investors both individual and institutional-with investment portfolios ranging in asset size from
thousands to cores of rupees.

Increased market volatility- risk and return parameters of financial assets are continuously
changing so your assets in the portfolio should be properly managed.

Portfolio’s created by portfolio manager should be as per investor’s behavior and their objective, risk
appetite. Portfolio creation is important and it should be as per investor class otherwise it would not
fulfill its financial needs

Portfolio revision is another vital aspect in an investor’s Portfolio because continuous revision is
needed to gain higher returns with manageable risk.

Acensure Financial Solutions Pvt. Ltd. is mainly into insurance and has started mutual funds and
has a tie up with IFAST Financial for PMS in mutual funds. CRM activity was conducted in order
to know the customer perception about Portfolio management Service.

Therefore a Detailed study on Portfolio management services in mutual funds specially focusing
on portfolio creation of different types of investor on the basis of risk, Portfolio revision and
mutual fund comparison.



3. OBJECTIVES OF THE STUDY

Primary objectives
 The main objective of this study is doing an In-depth analysis of Mutual Fund
Portfolio by taking sample of funds and comparing it with it others

Secondary objectives
 To understand the concept of portfolio management and its relation to Mutual funds.

 To evaluate and create a portfolio’s consisting the best mutual fund schemes which will earn
highest possible returns and will minimize the risk.

 To understand the process Portfolio revision using different types of plans

 Also to analyze the performance of mutual fund schemes on the basis of various parameters.



4. RESEARCH METHODOLOGY

4.1 RESEARCH DESIGN
 Exploratory Research & Analytical Research
 Quantitative research

4.2 DATA COLLECTION METHOD

Primary data: The study was conducted through a Survey and involved, interviewing different age
group of people through the Survey, falling under three distinct Age – Brackets, being:
 22- 35
 35 – 50
 Above 50
The information gives us an overall understanding of the respondent’s investment profile and
helps us to understand what investment mix and which mutual fund will be appropriate, or
inappropriate, in helping to achieve his financial goals.

Secondary data:
 For data collection purpose the secondary source was used like mutual fund factsheet, books, websites
 This data was used To Create Portfolio’s as per Investor type, Portfolio revision and comparison of
mutual funds schemes

1.3 SAMPLE DESIGN

Sample Size: 100 Samples

Type of sample: Convenience sampling

The sample size consist of clients of Acensure
 customers taken Insurance policy and mutual funds
 customers having PMS a/c

4.4 NULL HYPOTHESIS
 Passive Management gives more return compared to Active Management.
 Passive Management has better approach compared to Active Management



5.1 INTRODUCTION TO MUTUAL FUND

A mutual fund is just the connecting bridge or a financial intermediary that allows a group of
investors to pool their money together with a predetermined investment objective. The mutual
fund will have a fund manager who is responsible for investing the gathered money into
specific securities (stocks or bonds). When you invest in a mutual fund, you are buying units or
portions of the mutual fund and thus on investing becomes a shareholder or unit holder of the
fund.

Mutual funds are considered as one of the best available investments as compare to others they
are very cost efficient and also easy to invest in, thus by pooling money together in a mutual
fund, investors can purchase stocks or bonds with much lower trading costs than if they tried to
do it on their own. But the biggest advantage to mutual funds is diversification, by minimizing
risk & maximizing returns.

Fig 2 Mutual fund



5.1 HISTORY OF MUTUAL FUNDS

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the
initiative of the Government of India and Reserve Bank of India. The history of mutual funds in
India can be broadly divided into four distinct phases

First Phase – 1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the
Reserve Bank of India and functioned under the Regulatory and administrative control of the
Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development
Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The
first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700
crores of assets under management.

Second Phase – 1987-1993 (Entry of Public Sector Funds)
1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and
Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI
Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Canbank
Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund
(Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its
mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.
At the end of 1993, the mutual fund industry had assets under management of Rs.47,004 crores.

Third Phase – 1993-2003 (Entry of Private Sector Funds)
With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in
which the first Mutual Fund Regulations came into being, under which all mutual funds, except
UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with
Franklin Templeton) was the first private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and
revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual
Fund) Regulations 1996.

The number of mutual fund houses went on increasing, with many foreign mutual funds setting
up funds in India and also the industry has witnessed several mergers and acquisitions. As at the
end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The



Unit Trust of India with Rs.44, 541 crores of assets under management was way ahead of other
mutual funds.

Fourth Phase – since February 2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated
into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets
under management of Rs.29, 835 crores as at the end of January 2003, representing broadly, the
assets of US 64 scheme, assured return and certain other schemes.
The Specified Undertaking of Unit Trust of India, functioning under an administrator and under
the rules framed by Government of India and does not come under the purview of the Mutual
Fund Regulations.

The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is registered with
SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI
which had in March 2000 more than Rs.76,000 crores of assets under management and with the
setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with
recent mergers taking place among different private sector funds, the mutual fund industry has
entered its current phase of consolidation and growth.

The graph indicates the growth of assets over the years.

Fig 2.1 History of mutual fund



5.2 ORGANIZATION OF A MUTUAL FUND

Fig 2.2 Organization structure

5.3 TYPES OF MUTUAL FUNDS

Types of Mutual Fund

By Investment
By Structure Objective

Open ended Close ended Equity

Interval Debt

Balanced

Money
MarketSchemes
Fig 2.3 Types



1. Equity fund:
These funds invest a maximum part of their corpus into equities holdings. The structure of the fund
may vary different for different schemes and the fund manager’s outlook on different stocks. The
Equity Funds are sub-classified depending upon their investment objective, as follows:
 Diversified Equity Funds
 Mid-Cap Funds
 Sector Specific Funds
 Tax Savings Funds (ELSS)
Equity investments are meant for a longer time horizon, thus Equity funds rank high on the risk-
return matrix.
2. Debt funds:
. By investing in debt instruments, these funds ensure low risk and provide stable income to the
investors. Debt funds are further classified as:
 Gilt Funds
 Income Funds
 MIP.
 Short Term Plans (STP)
 Liquid Funds:

3. Balanced funds:
They invest in both equities and fixed income securities, which are in line with pre-defined
investment objective of the scheme. These schemes aim to provide investors with the best of both
the worlds. Equity part provides growth and the debt part provides stability in returns.

Further the mutual funds can be broadly classified on the basis of investment parameter viz,
By investment objective:
 Growth Schemes: Growth Schemes are also known as equity schemes. The aim of these schemes
is to provide capital appreciation over medium to long term.

 Income Schemes: Income Schemes are also known as debt schemes. The aim of these schemes is
to provide regular and steady income to investors. These schemes generally invest in fixed income
securities such as bonds and corporate debentures.

 Balanced Schemes: Balanced Schemes aim to provide both growth and income by periodically
distributing a part of the income and capital gains they earn. These schemes invest in both shares
and fixed income securities, in the proportion indicated in their offer documents (normally 50:50).



 Money Market Schemes: Money Market Schemes aim to provide easy liquidity, preservation of
capital and moderate income. These schemes generally invest in safer, short-term instruments,
such as treasury bills, certificates of deposit, commercial paper and inter-bank call money.
Other schemes
 Tax Saving Schemes:
 Index Schemes:
 Sector Specific Schemes

5.4 FUND MANAGEMENT
Actively managed funds:

Mutual Fund managers are professionals. They are considered professionals because of their
knowledge and experience. Managers are hired to actively manage mutual fund portfolios.
Instead of seeking to track market performance, active fund management tries to beat it. To do
this, fund managers "actively" buy and sell individual securities. For an actively managed fund,
the corresponding index can be used as a performance benchmark.

Actively managed fund styles:
Fund styles usually fall within the following three categories.
Fund Styles:

 Value: The manager invests in stocks believed to be currently undervalued by the market.

 Growth: The manager selects stocks they believe have a strong potential for beating the market.

 Blend: The manager looks for a combination of both growth and value stocks.

Passively Managed Funds:

Passively managed mutual funds are an easily understood, relatively safe approach to investing in
broad segments of the market. They are used by less experienced investors as well as
sophisticated institutional investors with large portfolios.



6 PORTFOLIO MANAGEMENT SERVICES
What is Portfolio Management?
Portfolio Management Services, called, as PMS are the advisory services provided by corporate
financial intermediaries. It enables investors to promote and protect their investments that help
them to generate higher returns. It devotes sufficient time in reshuffling the investments on hand
in line with the changing dynamics. It provides the skill and expertise to steer through these
complex, volatile and dynamic times. It is a choice of selecting and revising spectrum of
securities to it with the characteristics of an investor. It prevents holding of stocks of depreciating-
value. It acts as a financial intermediary and is subject to regulatory control of SEBI.

6.1 PHASES OF PORTFOLIO MANAGEMENT
 Security Analysis
 Portfolio Analysis
 Portfolio Selection
 Portfolio Revision
 Portfolio Evaluation

 Security Analysis
(a) Fundamental analysis: This analysis concentrates on the fundamental factors
Affecting the company such as EPS (Earning per share) of the company, the dividend
Payout ratio, competition faced by the company, market share, quality of management
Etc.

(b) Technical analysis: The past movement in the prices of shares is studied to identify
trends and patterns and then tries to predict the future price movement. Current
market price is compared with the future predicted price to determine the mispricing.
Technical analysis concentrates on price movements and ignores the fundamentals of
the shares.

(c) Efficient market hypothesis: This is comparatively more recent approach. This
approach holds that market prices instantaneously and fully reflect all relevant
available information. It means that the market prices will always be equal to the
Intrinsic value.

 Portfolio Analysis
A portfolio is a group of securities held together as investment. It is an attempt to



spread the risk all over. The return & risk of each portfolio has to be calculated
Mathematically and expressed quantitatively. Portfolio analysis phase of portfolio
Management consists of identifying the range of possible portfolios that can be
constituted from a given set of securities and calculating their risk for further
analysis.

 Portfolio Selection
The goal of portfolio construction is to generate a portfolio that provides the highest
returns at a given level of risk. Harry Markowitzh portfolio theory provides both the
conceptual framework and the analytical tools for determining the optimal portfolio
in a disciplined and objective way.

 Portfolio Revision
The investor/portfolio manager has to constantly monitor the portfolio to ensure that
it continues to be optimal. As the economy and financial markets are highly volatile
dynamic changes take place almost daily. As time passes securities which were once
attractive may cease to be so. New securities with anticipation of high returns and
low risk may emerge.

 Portfolio Evaluation
Portfolio evaluation is the process, which is concerned with assessing the
performance of the portfolio over a selected period of time in terms of return & risk.
The evaluation provides the necessary feedback for better designing of portfolio the
next time around.



6.2 TYPES OF PORTFOLIO MANAGEMENT

Types of Portfolio
Management

Discretionary portfolio Non-discretionary
management services portfolio management
services

Fig: 2.4 Types

The Discretionary portfolio management services (DPMS):

In this type of services, the client parts with his money in favor of manager, who in return,
handles all the paper work, makes all the decisions and gives a good return on the investment
and for this he charges a certain fees

The Non-discretionary portfolio management services:

The manager function as a counselor, but the investor is free to accept or reject the manager’s
advice; the manager for a services charge also undertakes the paper work. The manager
concentrates on stock market instruments with a portfolio tailor made to the risk taking ability
of the investor



6.3 MANAGING PORTFOLIO

ASSET ALLOCATION
The process of dividing a portfolio among major asset categories such as bonds, stocks or
cash. The purpose of asset allocation is to reduce risk by diversifying the portfolio. The ideal
asset allocation differs based on the risk tolerance of the investor.

To help determine which securities, asset classes and subclasses are optimal for
your portfolio; let's define some briefly:

 Large-cap stock -These are shares issued by large companies with a market capitalization
generally greater than $10 billion.

 Mid-cap stock - These are issued by mid-sized companies with a market cap generally between
$2 billion and $10 billion.

 Small-cap stocks – These represent smaller-sized companies with a market cap of less than $2
billion. These types of equities tend to have the highest risk due to lower liquidity.

 International securities These types of assets are issued by foreign companies and listed on a
foreign exchange. International securities allow an investor to diversify outside of his or her
country, but they also have exposure to country risk - the risk that a country will not be able to
honor its financial commitments.

 Emerging markets – This category represents securities from the financial markets of a
developing country. Although investments in emerging markets offer a higher potential return,
there is also higher risk, often due to political instability, country risk and lower liquidity.

 Money market - Money market securities are debt securities that are extremely liquid
investments with maturities of less than one year. Treasury bills make up the majority of these
types of securities.

 Real-estate investment trusts (REITs) REITs trade similarly to equities, except the
underlying asset is a share of a pool of mortgages or properties, rather than ownership of a
company



6.4 INVESTOR TYPES

Low High Risk
There are many different types of investors in the stock market, investors can be classified into
the following types: Aggressive, Conservative, and Balanced

Aggressive Investor
Aggressive investors tend to concentrate on equity investments such as individual stocks and
mutual funds. They are open to more risk, willing to see large short term swings in market
performance on an annualized basis. They aim for large growth in the market.

Balanced investors
Balanced investors will have a time horizon of 5 to 10 years and choose to diversify across both
aggressive growth-oriented investments and more conservative interest-earning investments.
They emphasize income over growth. Balanced investors are medium risk investors.

Conservative Investor
Conservative investors have a 2 to 5 year time horizon, typically because they are nearing
retirement or have a short-term need for their investment. They prefer a higher level of income
than does the stable investor. Conservative investors are low to medium risk investors.



Conservative Portfolio

10%
20% Fixed Income Securities
Equities
70%
Cash and equivalents

Fig 3.1: Conservative Portfolio

Aggressive Portfolio
5% 15%

Fixed Income Securities
Equities
80%

Fig 3.2 Aggressive portfolio

Balanced Portfolio
10%

35% 55% Fixed Income Securities
Equities

Fig3.3: Balanced portfolio



6.6 SEBI GUIDELINE FOR PMS

 For investment in listed securities, an investor is required to open a Demat account in his/her
own name

 Minimum investment amount of clients for such schemes to Rs 25 lakh from the earlier Rs 5
lakh.

 Portfolio manager will not be allowed to hold the unlisted securities, besides the listed
securities, belonging to the portfolio account, in its own name on behalf of its clients.

 Portfolio manager cannot offer/ promise indicative or guaranteed returns to clients.

 The portfolio manager is required to have a minimum net worth of Rs. 2 crore.



7 DATA ANALYSIS
The data collected through the Profiler provided for an Analysis of an Individual’s Risk – taking
capacity through the Risk – Analyzer. The Questionnaire, after being administered on the
Respondents categorizes each of them on the basis of their risk – taking, as Investors of the
following classes: Conservative, Balanced, and Aggressive

1. Demographic Analysis: The data of 100 respondents included 70 males and 30 females.

Demographic Analysis

30%

males
70%
females

Fig 4.1 Demographics

2. Age Group

30%
40%
Age
18 to 35
36 to 50
30%
Above50

Fig 4.2 Age group

3. Income level Between 3,00,000 to 30,00,000

4. .What percentage of monthly income can be invested?



0%

20% 10% 0 to 10%

10% 11% to 20%

21% to 30%
60%
More than 30%

I currently have no income

Fig 4.3: Monthly Income
5. When do you expect to liquidate your investment?

80

60
period

40

20

0
less than 1yr 1 to 2yrs 3 to 5yrs 5 yrs and
above
Series1 5 10 70 15

Fig 4.4 expected liquidation period
5. What is your expected rate of return from your investments

60

40
Series1
20

0
6%p.a 10%-15 % p.a more than 15% p.a

Fig 4.5: expected return



6. I would start to worry about my investments if my portfolio value falls
45
40
35
30
25
20
15
10
5
0
Less than 5% More than 30%
5%-10% p. a 10%-20% p.a 20%-30% p. a
p.a p. a
Series1 10 30 40 15 5

Fig 4.6: Decrease in Portfolio
7. Maximum allocation in your current portfolio pertains to
5% 10%
25%
Savings and fixed deposits
15%

Bonds

Equities
45%
Mutual Funds

Fig 4.7: Portfolio Allocation
8. I prefer to keep capital safe rather than have high return

60
50
40
30
20
10
0
Strongly Neutral Strongly
agree disagree
Series1 60 10 30
Fig 4.8: capital or return preference



7.1 INTERPRETATION

 Out of 100 respondents 70 were male and 30 female with Income level between 3 lakhs to
30,00,000 Lakhs

 60% of the respondents prefer investing monthly 11% to 20%

 70% of the respondents are ready to liquidate their investments with range of 3 to 5years

 45% of the investor’s portfolio consist of Equities


 Age Group of 22 to 35 young working class with limited liability prefers to take higher risk and
get higher returns of 15% and more. They belong to Aggressive class of Investors. Equity funds
are most preferred by them.

 Age group of 36 to 50 is those respondents who have dependents on them emphasize income
over growth. They are medium risk investors. They prefer to keep capital safe rather than having
high return. They belong to balanced class of Investors.

 Age groups of 50 and above are those respondents nearing retirement or have a short-term need
for their investment. They are low to medium risk investors. They prefer a higher level of income
than does the stable investor. They belong to Conservative class of investors. Debt Funds are
most preferred by them.



8 PORTFOLIO CREATION

8.1AGGRESSIVE INVESTOR PORTFOLIO (80%EQUITY AND 20%DEBT)
Table 1

SCHEME NAME NATURE RETURNS BETA Rs
SBI MAGNUM SECTOR EQUITY 23.09 1.01 400000
FUNDS UMBRELLA -
PHARMA – GROWTH

SBI MAGNUM SECTOR EQUITY 22.73 1.03 200000
FUNDS UMBRELLA - EMERG
BUSS FUND – GROWTH

BIRLA SUN LIFE MNC FUND EQUITY 24.28 0.74 600000
– GROWTH

RELIANCE PHARMA FUND – EQUITY 29.65 0.91 800000
GROWTH

EQUITY 2000000
SUNDARAM BOND SAVER - DEBT 9.41 1.17 125000
INSTITUTIONAL PLAN –
GROWTH

RELIANCE MONTHLY DEBT 9.40 1.14 125000
INCOME PLAN – GROWTH

SAHARA SHORT TERM DEBT 9.24 1.03 125000
BOND FUND – GROWTH

HDFC MONTHLY INCOME DEBT 9.14 1.28 125000
PLAN - LONG TERM PLAN –
GROWTH
DEBT
TOTAL PORTFOLIO 25,00,000



8.2 CONSERVATIVE INVESTOR PORTFOLIO (80% DEBT 20% EQUITY)
Table 1.2
SCHEME NAME NATURE RETURNS BETA Rs
ICICI PRUDENTIAL EQUITY 26.03 0.88 200000
TECHNOLOGY FUND –
GROWTH

FRANKLIN INFOTECH EQUITY 20.18 0.89 50000
FUND – GROWTH

HDFC MID-CAP EQUITY 21.10 0.80 100000
OPPORTUNITIES FUND –
GROWTH

RELIGARE MID N SMALL 150000
CAP FUND – GROWTH EQUITY 21.35 0.80

EQUITY
HDFC MULTIPLE YIELD DEBT 10.86 0.45 400000
FUND - PLAN 2005 –
GROWTH

HDFC MULTIPLE YIELD DEBT 400000
FUND - GROWTH 10.33
0.69
SBI MAGNUM CHILDREN DEBT 9.39 0.76 400000
BENEFIT PLAN

TEMPLETON INDIA STIP - DEBT 8.40 0.72 400000
IP – GROWTH

UTI CRTS 81 – GROWTH DEBT 11.21 0.86 400000

DEBT 20,00,000



8.3 BALANCED INVESTOR PORTFOLIO (50% DEBT 50% EQUITY)
Table 3
SCHEME NAME NATURE RETURNS BETA
HDFC MID-CAP
OPPORTUNITIES FUND – 200000
GROWTH EQUITY 21.10 0.80

RELIANCE EQUITY 100000
OPPORTUNITIES FUND –
GROWTH EQUITY 20.97 0.86

UTI MNC FUND - GROWTH 400000
EQUITY 22.46 0.71

300000
RELIGARE MID N SMALL CAP
EQUITY 21.35 0.80
FUND - GROWTH

EQUITY 1000000
250000
UTI CRTS 81 – GROWTH DEBT 11.21 0.86

HDFC MONTHLY INCOME 250000
PLAN - LONG TERM PLAN - DEBT 9.14 1.28
GROWTH

UTI SHORT TERM INCOME 250000
FUND - IP – GROWTH DEBT 8.62 0.83

250000
SBI MAGNUM CHILDREN
DEBT 9.39 0.76
BENEFIT PLAN

DEBT 10,00,000



9 PORTFOLIO REVISION

Portfolio revision is done in this Project is done in 3 following ways in order to find out which of
give them higher returns in the span of 2months from May 2nd 2012 to June 30th 2012
Portfolios are revised every 15 days in span of two months

1. Constant Rupee Plan
The objective of this plan is to balance the division between the conservative and aggressive
components of the portfolio in terms of the target value.
The target value could be fixed initially by the investor in a desirable proportion

2. Constant Ratio Plan
In this plan, we maintain a ratio between the aggressive and conservative components of a
portfolio. The initial ratio is FIXED by the investor and could be, say, 1:1 or any other desirable
ratio.

3. Variable Plan
This plan gives more flexibility to the investors to revise the portfolio components.
When share price falls, the investor may shift major component of the conservative and aggressive
components
The desired ratio of investment holding between aggressive and conservative components of a
portfolio, hence, may vary according to the flexibility that an investor wishes to incorporate in the
portfolio revision decision



9.1 PORTFOLIO REVISION AS PER CONSTANT RUPEE PLAN
In Constant Rupee Plan, as it is an Aggressive Investor its Equity is kept Rs 20, 00,000 and Debt is
Rs 5, 00,000. Every 15th day it’s revised as per constant rupee plan
PORTFOLIO AS ON MAY 1st 2012
Table 4.1
SCHEME NAME NAV as Returns Market Excess Rank % Rs Units
on 2nd return return
May
SBI MAGNUM SECTOR 49.57 23.09 19 4.09 2 0.2 400000 8069
FUNDS UMBRELLA –
PHARMA – GROWTH

SBI MAGNUM SECTOR 46.89 22.73 19 3.73 1 0.1 200000 4265
FUNDS UMBRELLA –
EMERG BUSS FUND –
GROWTH

BIRLA SUN LIFE MNC 230.02 24.28 19 5.28 3 0.3 600000 2608
FUND – GROWTH

RELIANCE PHARMA 58.386 29.65 19 10.65 4 0.4 800000 13702
FUND – GROWTH

EQUITY 10 2000000
SCHEME NAME NAV as Returns Market Excess Rank % Rs Units
May

SUNDARAM BOND 34.752 9.41 - - - - 125000 3597
SAVER –
INSTITUTIONAL PLAN
– GROWTH
RELIANCE MONTHLY 23.43 9.40 - - - - 125000 5336
INCOME PLAN –
GROWTH

SAHARA SHORT TERM 13.06 9.24 - - - - 125000 9572
BOND FUND –
GROWTH



HDFC MONTHLY 24.35 9.14 - - - - 125000 5132
INCOME PLAN – LONG
TERM PLAN – GROWTH

DEBT 500000
TOTAL PORTFOLIO 2500000

REVISED PORTFOLIO AS ON MAY 15TH 2012
Table 4.2

SCHEME NAME NAV as Rs Increase Revised New units on
on 15th Decrease on May May 15th
May 15th
SBI MAGNUM SECTOR 49.02 395561.83 -1.11% 395561.83 8069.40
FUNDS UMBRELLA -
PHARMA – GROWTH

SBI MAGNUM SECTOR 45.21 192834.29 -3.58% 191274.17 4230.79
FUNDS UMBRELLA -
EMERG BUSS FUND –
GROWTH
BIRLA SUN LIFE MNC 223.79 583749.24 -2.71% 583749.24 2608.47
FUND – GROWTH

RELIANCE PHARMA 56.392 772678.38 -3.42% 772678.38 13701.9
FUND – GROWTH

EQUITY 1944823 1943263
SUNDARAM BOND 34.98 125820.10 125000 3573.47
SAVER - INSTITUTIONAL
PLAN – GROWTH

RELIANCE MONTHLY 23.22 123879.64 125000 5383.29
INCOME PLAN –
GROWTH



SAHARA SHORT TERM 13.1 125382.85 125000 9541.98

HDFC MONTHLY 24.03 123357.29 125000 5201.83
INCOME PLAN - LONG

DEBT 498439.88 500000
TOTAL PORTFOLIO 2500000
In constant Rupee Plan the equity and Debt is to be kept constant throughout. Here both equity and
Debt value has fallen so we have sold some of the equity from Scheme giving higher loss of 3.58%
SBI MAGNUM SECTOR FUNDS UMBRELLA – EMERG BUSS FUND – GROWTH and have
maintained the total Debt value 5,00,000.

Table 4.3
New units
NAV as on Increase/ Revised on on May
SCHEME NAME Rs
31h May Decrease May 31th 31th

48.38 -1.31
390397.42 390397.42 8069.40
SBI MAGNUM
SECTOR FUNDS
UMBRELLA -
PHARMA – GROWTH

SBI MAGNUM 44.81 189581.85 189581.85 4230.79
SECTOR FUNDS -0.88
UMBRELLA - EMERG
BUSS FUND –
GROWTH

BIRLA SUN LIFE 221.8 578558.39 578558.39 2608.47
MNC FUND –
GROWTH
-0.89
RELIANCE PHARMA 56.33 771828.86 -0.11 774167.84 13743.44
FUND – GROWTH

EQUITY 1930366.5 1932705.5



125000 3558.21 125533.732 3558.21
SUNDARAM BOND
SAVER -
INSTITUTIONAL
PLAN – GROWTH

RELIANCE MONTHLY
INCOME PLAN – 125000 5351.03 125588.613 5351.03
GROWTH

SAHARA SHORT 125000 9505.70 125570.342 9505.70
TERM BOND FUND –
GROWTH

HDFC MONTHLY 125000 5178.13 126190.969 5178.13
INCOME PLAN -
LONG TERM PLAN –
GROWTH
DEBT 500000 502883.656
2432705.5 2432705.5
TOTAL PORTFOLIO

On May31st 2012 even though the portfolio has fallen both equity and Debt have increased as
compared to revised portfolio as May 15th. Some of the Debt scheme have been sold, and is invested in
Equity giving least loss RELIANCE PHARMA FUND – GROWTH

REVISED PORTFOLIO AS ON June 15th 2012
Table 4.4
SCHEME NAME NAV as Rs Increase Revised on New
on 15th (Decrease) June 15th units on
June June 15th
SBI MAGNUM 47.65 384506.75 -1.51 384506.75 8069.40
SECTOR FUNDS
UMBRELLA - PHARMA
– GROWTH
SBI MAGNUM SECTOR 45.49 192458.791 1.52 195342.44 4294.18
FUNDS UMBRELLA -
EMERG BUSS FUND –
GROWTH
BIRLA SUN LIFE MNC 223.8 583775.324 0.90 583775.32 2608.47
FUND – GROWTH



RELIANCE PHARMA 56.698 779225.43 0.65 779225.43 13743.44
FUND – GROWTH
EQUITY 1939966.3 1942849.96
SUNDARAM BOND 35.28 125533.732 125000 3543.08
SAVER -
INSTITUTIONAL PLAN
– GROWTH
RELIANCE MONTHLY 23.47 125588.61 125000 5325.95
INCOME PLAN –
GROWTH
SAHARA SHORT TERM 13.21 125570.34 125000 9462.52
BOND FUND –
GROWTH
HDFC MONTHLY 24.37 126190.96 125000 5129.25
INCOME PLAN - LONG
TERM PLAN –
GROWTH
DEBT 502883.65 500000

TOTAL PORTFOLIO 2432705.50 2442849.96
On June 15th 2012 even though the portfolio has fallen both equity and Debt have increased as
compared to revised portfolio as May 31th.
Some of the Debt scheme have been sold and is invested in Equity giving least loss SBI
MAGNUM SECTOR FUNDS UMBRELLA - EMERG BUSS FUND – GROWTH



PORTFOLIO AS ON JUNE 29TH 2012
Table 4.5
SCHEME NAME NAV as on 15th Rs
June
SBI MAGNUM SECTOR FUNDS UMBRELLA - 50.13 404518.862
PHARMA – GROWTH
SBI MAGNUM SECTOR FUNDS UMBRELLA - 46.86 201225.48
EMERG BUSS FUND – GROWTH
BIRLA SUN LIFE MNC FUND – GROWTH 232.85 607381.967
RELIANCE PHARMA FUND – GROWTH 58.478 803688.749
EQUITY 2016815.06

SUNDARAM BOND SAVER - INSTITUTIONAL 35.38 125354.308
PLAN – GROWTH
RELIANCE MONTHLY INCOME PLAN – 23.58 125585.854
GROWTH
SAHARA SHORT TERM BOND FUND – GROWTH 13.26 125473.126
HDFC MONTHLY INCOME PLAN - LONG TERM 24.55 125923.26
PLAN – GROWTH
DEBT 502336.55

TOTAL PORTFOLIO as May 29th 2012 2519152

CALCULATION OF RETURNS AS PER CONSTANT RUPEE PLAN
Table 4.6
PORTFOLIO
PORTFOLIO AS Excess Returns %
ND AS ON JUNE
ON MAY 2 2012 TH Returns
29 2012
25,00,000 2519152 19,152 0.73%

Opting for Constant Rupee Plan would give return of 0.73% in the span of 2months



9.2 PORTFOLIO REVISION AS PER CONSTANT RATIO PLAN
In Constant ratio Plan a fixed ratio is kept between Debt and Equity 60% and 40%
Portfolio as on 2nd May 2012
Table 5.1
SCHEME NAME NAV as Return Market Excess Rank % Rs Units
May
SBI MAGNUM 49.57 23.09 19 4.09 2 0.2 300000 6052.05
SECTOR FUNDS
UMBRELLA -
PHARMA –
GROWTH

SBI MAGNUM 46.89 22.73 19 3.73 1 0.1 150000 3198.98
SECTOR FUNDS
UMBRELLA -
EMERG BUSS
FUND – GROWTH

BIRLA SUN LIFE 230.02 24.28 19 5.28 3 0.3 450000 1956.35
MNC FUND –
GROWTH
RELIANCE 58.386 29.65 19 10.65 4 0.4 600000 10276.4
PHARMA FUND –
GROWTH

EQUITY 10 1500000
SUNDARAM BOND 34.752 250000 7193.83
SAVER -
INSTITUTIONAL
PLAN – GROWTH
RELIANCE 23.43 250000 10670.0
MONTHLY
INCOME PLAN –
GROWTH

SAHARA SHORT 13.06 250000 19142.4
TERM BOND FUND
– GROWTH



HDFC MONTHLY 24.35 250000 10266.9
INCOME PLAN -
LONG TERM PLAN
– GROWTH
DEBT 1000000 1000000

TOTAL 2500000
PORTFOLIO

Table 5.2
SCHEME NAME NAV as on Rs Increase/ Revised on New units on
15th May decrease May 15th May 15th
SBI MAGNUM SECTOR 49.02 296671.37 -1.11 589319.41 12022.02
FUNDS UMBRELLA -
PHARMA – GROWTH

FUNDS UMBRELLA -
EMERG BUSS FUND –
GROWTH
BIRLA SUN LIFE MNC 223.79 437811.93 -2.71 441989.56 1975.02
FUND – GROWTH
RELIANCE PHARMA 56.392 579508.79 -3.42 294659.71 5225.20
FUND – GROWTH
EQUITY 1458617.8 1473298.5 22481.03

SUNDARAM BOND 34.98 251640.19 245549.76 7019.72
PLAN – GROWTH
RELIANCE MONTHLY 23.22 247759.28 245549.76 10574.92
INCOME PLAN –
GROWTH
SAHARA SHORT TERM 13.1 250765.70 245549.76 18744.26
HDFC MONTHLY 24.03 246714.58 245549.76 10218.47
INCOME PLAN - LONG
DEBT 996879.75 982199.02



TOTAL PORTFOLIO 2455497.5 2455497.5

As on May 15th 2012 Portfolio has fallen, Debt and equity has fallen. Overall Portfolio has
been revised as Constant ratio Plan, fixed ratio of 60% equity and 40% debt. There Total
portfolio as on May 15th 2012 ie, Rs 24, 55,497.56 is allocated to equity 60% and Debt 40%
REVISED PORTFOLIO AS ON MAY 31st 2012
Table 5.3
SCHEME NAME NAV as RS Increase Revised on New
on 31st decrease May 31st units on
May May 31st
SBI MAGNUM SECTOR 581625.32 -1.31 146810.42 3034.53
FUNDS UMBRELLA - 48.38
PHARMA – GROWTH

FUNDS UMBRELLA -
EMERG BUSS FUND –
GROWTH
BIRLA SUN LIFE MNC 221.8 438059.27 -0.89 293620.85 1323.81
FUND – GROWTH
RELIANCE PHARMA FUND 56.33 294335.74 -0.11 587241.69 10425.03
– GROWTH
EQUITY 1460046 1468104.2
SUNDARAM BOND SAVER 35.13 246602.71 244684.04 6965.10
- INSTITUTIONAL PLAN –
GROWTH

HDFC MONTHLY INCOME 24.14 246673.79 244684.04 10136.04
PLAN - LONG TERM PLAN
– GROWTH
DEBT 986793.72 978736.16
TOTAL PORTFOLIO 2446840.3 2446840.3

As on May 31st 2012 Portfolio has fallen, Debt has increased and equity has fallen. Overall



Portfolio has been revised as Constant ratio Plan, fixed ratio of 60% equity and 40% debt. There
Total portfolio as on May 31st2012 ie, Rs 2446840.39 is allocated to equity 60% and Debt 40%

REVISED PORTFOLIO AS ON June 15th 2012
Table 5.4
SCHEME NAME NAV as Rs Increase/ Revised on New
on June decrease June 15th units on
15th June 15th
FUNDS UMBRELLA -
PHARMA – GROWTH
SBI MAGNUM SECTOR 45.49 447114.90 1.52 591225 12996.81
FUNDS UMBRELLA -
EMERG BUSS FUND –
GROWTH
BIRLA SUN LIFE MNC 223.8 296268.47 0.90 443418.7 1981.32
FUND – GROWTH
RELIANCE PHARMA 56.698 591078.10 0.65 295612.50 5213.81
FUND – GROWTH
EQUITY 1479056.6 1478062
SUNDARAM BOND 35.28 245728.80 246343.75 6982.53
PLAN – GROWTH
HDFC MONTHLY 24.37 247015.33 246343.75 10108.48
INCOME PLAN - LONG
DEBT 984380.84 985375.01
TOTAL PORTFOLIO 2463437.52 2463437.52

As on June 15th 2012 Portfolio has increased, Debt equity has increased. Overall Portfolio has
been revised as Constant ratio Plan, fixed ratio of 60% equity and 40% debt. There Total
portfolio as on June 15th 2012 ie, Rs 2463437.52is allocated to equity 60% and Debt 40%



Table 5.5
NAV as on Rs
SCHEME NAME
29th June
SBI MAGNUM SECTOR FUNDS UMBRELLA -
PHARMA – GROWTH
50.13 155499.00
SBI MAGNUM SECTOR FUNDS UMBRELLA -
46.86 609030.64
BIRLA SUN LIFE MNC FUND – GROWTH
232.85 461349.67
RELIANCE PHARMA FUND – GROWTH
58.478 304893.08
EQUITY 1530772.39
SUNDARAM BOND SAVER - INSTITUTIONAL
PLAN – GROWTH
35.38 247042.01
RELIANCE MONTHLY INCOME PLAN – GROWTH
23.58 247498.32
SAHARA SHORT TERM BOND FUND – GROWTH
13.26 247276.17
HDFC MONTHLY INCOME PLAN - LONG TERM
PLAN – GROWTH
24.55 248163.28
DEBT 989979.77
TOTAL PORTFOLIO as May 29th 2012 2520752.17

CALCULATION OF RETURNS AS PER CONSTANT RATIO PLAN
Table 5.6
PORTFOLIO
ND AS ON JUNE
ON MAY 2 2012 TH Returns
29 2012
20752.17
25,00,000 2520752.17 0.83%

Opting for Constant Ratio Plan would give return of 0.83% in the span of 2month



9.3 PORTFOLIO REVISION AS PER VARIABLE PLAN
A s p e r V a r i a b l e P l a n , t h e r a t i o s a r e v a r i e d w h e n e v e r t h e r e is a change in the
economic or market index. As on May 2nd, Portfolio is divided into 60% equity 40% debt. In
Equity, Schemes are allocated on basis of comparing its returns with market returns. Scheme giving
higher returns are given more weightage
PORTFOLIO AS ON 2ND MAY 2012

SCHEME NAME NAV as Return Market Excess Rank % Rs Units
May
SBI MAGNUM SECTOR 49.57 23.09 19 4.09 2 0.2 300000 6052.05
FUNDS UMBRELLA -
PHARMA – GROWTH

SBI MAGNUM SECTOR 46.89 22.73 19 3.73 1 0.1 150000 3198.98
FUNDS UMBRELLA -
EMERG BUSS FUND –
GROWTH
BIRLA SUN LIFE MNC 230.02 24.28 19 5.28 3 0.3 450000 1956.35
FUND – GROWTH
RELIANCE PHARMA FUND 58.386 29.65 19 10.65 4 0.4 600000 10276.4
– GROWTH
EQUITY 10 1500000
SUNDARAM BOND SAVER 34.752 250000 7193.83
GROWTH
RELIANCE MONTHLY 23.43 250000 10670
SAHARA SHORT TERM 13.06 250000 19142
HDFC MONTHLY INCOME 24.35 250000 10266
PLAN - LONG TERM PLAN
– GROWTH
DEBT 10,00,000
Table 6.1



Table 6.2
SCHEME NAME NAV as RS Increase/ Revised New
on 15th decrease on May units
May 15th on
May
15th
SBI MAGNUM SECTOR 49.02 296671.4 -1.11 40% 491099.51 10018.35
FUNDS UMBRELLA -
PHARMA – GROWTH
SBI MAGNUM SECTOR 45.21 144625.7 -3.58 10% 122774.88 2715.658
FUNDS UMBRELLA -
EMERG BUSS FUND –
GROWTH
BIRLA SUN LIFE MNC 223.79 437811.9 -2.71 30% 368324.63 1645.849
FUND – GROWTH
RELIANCE PHARMA 56.392 579508.8 -3.42 20% 245549.76 4354.337
FUND – GROWTH
EQUITY 1458618 1227749
SUNDARAM BOND 34.98 251640.2 306937.2 8774.648
SAVER -
INSTITUTIONAL PLAN
– GROWTH
INCOME PLAN –
GROWTH
BOND FUND –
GROWTH
HDFC MONTHLY 306937.2 12773.08
INCOME PLAN - LONG 246714.6
TERM PLAN –
GROWTH 24.03
DEBT 996879.8 1227749

TOTAL PORTFOLIO 2455498 2455498

As on May 15th 2012 Portfolio has fallen, Debt has fallen by 0.31% and equity has fallen by



2.75%. Therefore Overall Portfolio has been revised given equal allocation of Portfolio to Debt
and equity. There Total portfolio as on May 15th 2012 ie, 50% Debt Rs 1227749 and 40% equity
Rs 12, 27,749
REVISED PORTFOLIO AS ON MAY 31st 2012
Table 6.3
SCHEME NAME NAV as RS Increase rank Revised New units
on 31st decrease on May on May
May 31st 31st

SBI MAGNUM
SECTOR FUNDS
UMBRELLA -
PHARMA –
GROWTH 48.38 484687.8 -0.01 0.1 98007.91 2025.79
SBI MAGNUM
SECTOR FUNDS
UMBRELLA -
EMERG BUSS
FUND – GROWTH 44.81 121688.6 -0.01 0.2 196015.82 4374.38
BIRLA SUN LIFE
MNC FUND –
GROWTH 221.8 365049.4 -0.01 0.3 294023.73 1325.63
RELIANCE
PHARMA FUND –
GROWTH 56.33 245279.8 0.00 0.4 392031.63 6959.55
EQUITY 1216706 980079.08
SUNDARAM
BOND SAVER -
INSTITUTIONAL
PLAN – GROWTH 35.13 308253.4 367529.66 10462
RELIANCE
MONTHLY
INCOME PLAN –
GROWTH 23.36 308787.8 367529.66 15733.3
SAHARA SHORT
TERM BOND
FUND – GROWTH 13.15 308108.7 367529.66 27949
HDFC
MONTHLY
INCOME PLAN - 24.14 308342.2 367529.66 15224.9



LONG TERM
PLAN – GROWTH
DEBT 1233492 1470118
TOTAL
PORTFOLIO 2450198 2450198

As on May 31st 2012 overall Portfolio has fallen, Debt has increased by 0.004% and equity has
fallen by 0.89%. Therefore Overall Portfolio has been revised given more allocation of
Portfolio to Debt 70% and equity 30%. There Total portfolio as on May 31st 2012 ie, 70% Debt
Rs 1470118.63 and 40% equity Rs 980079.08.

REVISED PORTFOLIO AS ON JUNE 15th 2012
Table 6.4
SCHEME NAME NAV as Rs Increase Revised on New units
on15th decrease May 31st on 15th
June June
SBI MAGNUM SECTOR 47.65 96529.08 -1.51 0.1 147923.1 3104.37
FUNDS UMBRELLA -
PHARMA – GROWTH
SBI MAGNUM SECTOR 45.49 198990.4 1.52 0.4 591692.3 13007.1
FUNDS UMBRELLA -
EMERG BUSS FUND –
GROWTH
BIRLA SUN LIFE MNC 223.8 296675 0.90 0.3 443769.2 1982.88
FUND – GROWTH
RELIANCE PHARMA FUND 56.698 394592.7 0.65 0.2 295846.1 5217.93
– GROWTH
EQUITY 986787.2 1479231
SUNDARAM BOND SAVER 35.28 369099 246538.4 6988.05
GROWTH
SAHARA SHORT TERM 13.21 369206.6 246538.4 18663
HDFC MONTHLY 24.37 371031.4 246538.4 10116.5
INCOME PLAN - LONG



DEBT 1478597 986153.8
TOTAL PORTFOLIO 2465384 2465384

As on June 15th 2012 overall Portfolio has increased, Debt has increased by 0.68% and equity
has increased by 0.57%. Therefore Overall Portfolio has been revised given more allocation of
Portfolio to equity 60% and Debt40% because equity is giving more returns than Debt.. There
Total portfolio as on May 31st 2012 ie Rs 24, 65,384, 40% Debt Rs 986153.8 and 60% equity
Rs 1479230.67



Table 6.5
SCHEME NAME NAV as on 15th Rs
June
SBI MAGNUM SECTOR FUNDS UMBRELLA – 50.13 155621.90
PHARMA – GROWTH
SBI MAGNUM SECTOR FUNDS UMBRELLA – 46.86 609511.98
BIRLA SUN LIFE MNC FUND – GROWTH 232.85 461714.29
RELIANCE PHARMA FUND – GROWTH 58.478 305134.05
EQUITY 1531982.21
SUNDARAM BOND SAVER – INSTITUTIONAL 35.38 247237.25
PLAN – GROWTH
RELIANCE MONTHLY INCOME PLAN – 23.58 247693.93
GROWTH
SAHARA SHORT TERM BOND FUND – GROWTH 13.26 247471.60
HDFC MONTHLY INCOME PLAN – LONG TERM 24.55 248359.41
PLAN – GROWTH
DEBT 990762.19
th
TOTAL PORTFOLIO as May 29 2012 2522744.40

CALCULATION OF RETURNS AS PER VARIABLE PLAN
Table 6.6
PORTFOLIO
AS ON JUNE
ON MAY 2ND 2012 Returns
29TH 2012
2522744.40 22744.40
25,00,000 0.90%

Opting for Variable would give return of 0.90% in the span of 2months



9.4 CALCULATION OF PORTFOLIO RETURNS
Table 7

PLAN NAME RETURNS RANKINGS

CONSTANT RUPEE 0.73% 3

CONSTANT RATIO 0.83% 2

VARIABLE PLAN 0.90% 1

Variable Plan gives highest returns of 0.90% compared to other two plans in span of 2months
2nd May 2012 to 29th June2012 because in variable plan continous revision is done according to
market Fluctuation.

Therefore Null hypothesis of the project has been proved wrong through analysis done above.

Here in variable plan active management style is adopted where continous revision is required
to get higher returns. of 0.90%.



10 MUTUAL FUND COMPARISON

The Five mutual funds taken for comparison are open ended funds and equity in nature.

HDFC TOP 200 – GROWTH
Objective: To generate long term capital appreciation by investing in a portfolio of equities and
equity linked instruments drawn from the BSE 200 Index.
Type of Scheme Open Ended
Nature Equity
Option Growth
Inception Date Sep 11, 1996
Face Value (Rs/Unit) 10

STANDARD
MEAN SHARPE TREYNOR BETA
DEVIATION
0.38 3.64 0.08 0.31 0.87

ICICI PRUDENTIAL FOCUSED BLUECHIP EQUITY FUND - INSTITUTIONAL -
GROWTH
Objective: Seeks to generate long-term capital appreciation and income distribution to unit holders
from a portfolio that is invested in equity and equity related securities of about 20 companies
belonging to the large cap
Nature Equity
Option Growth
Inception Date May 23, 2008
Minimum Investment (Rs) 10000000
Exit Load If redeemed bet. 0 Year to 1 Year; Exit load is 1%.

MEAN STANDARD SHARPE TREYNOR BETA
DEVIATION
0.44 3.62 0.09 0.38 0.87



DSP BLACKROCK SMALL AND MIDCAP FUND - GROWTH
Objective: The primary investment objective is to seek to generate long term capital appreciation
from a portfolio that is substantially constituted of equity related securities

Nature Equity
Option Growth
Inception Date Nov 14, 2006
Exit Load If redeemed bet. 0 Months to 12 Months; Exit load is 1%
Fund Manager Anup Maheshwari, Apoorva Shah .

Standard
Mean SHARPE TREYNOR BETA
Deviation
0.49 3.74 0.10 0.44 0.87

FRANKLIN INDIA BLUECHIP - GROWTH
Objective: Aims to achieve a high degree of capital appreciation through investments is well-
established, large size blue chip companies
Nature Equity
Option Growth
Exit Load If redeemed bet. 0 Months to 12 Months; Exit load is 1%
Fund Manager Sanjay Parekh , Shrey Loonkar, Sunil Singhania .

STANDARD
MEAN SHARPE TREYNOR BETA
DEVIATION
0.36 3.40 0.07 0.31 0.81



RELIANCE BANKING FUND – GROWTH

Objective: The primary investment objective of the Scheme is to seek to generate continuous
returns by actively investing in equity and equity related or fixed income securities of
companies in the banking sector.

Nature Equity
Option Growth
If redeemed bet. 0 Months to 12 Months; Exit load is
Exit Load
1%
Fund Manager Sanjay Parekh , Shrey Loonkar, Sunil Singhania .

Standard
Mean SHARPE TREYNOR BETA
Deviation
0.52 4.63 0.09 0.49 0.84



RETURNS OF 5 MUTUAL FUNDS
HDFC TOP 200 – GROWTH

25
20
15
10
5
0
-5
-10
Since
1 Month 3 Months 6 Months 1 Year 3 Years 5 Years
Inception
RETURNS 3.45 -0.82 13.36 -6.97 10.19 10.37 20.67

Fig 5.1

ICICI PRUDENTIAL FOCUSED BLUECHIP EQUITY FUND

15

10

5

0

-5
Since
1 Month 3 Months 6 Months 1 Year 3 Years
Inception
RETURNS 3.46 -0.42 8.66 -3.06 14.12 12.89
Fig 5.2
DSP BLACKROCK SMALL AND MIDCAP FUND - GROWTH

20
15
10
5
0
-5
-10
6 Since
1 Month 3 Months 1 Year 3 Years 5years
Months Inception
RETURNS 0.43 -1 18.11 -6.36 16.44 7.21 9.21

Fig 5.3



FRANKLIN INDIA BLUECHIP – GROWTH

25

20

15

10

5

0

-5
Since
1 Month 3 Months 6 Months 1 Year 3 Years 5years
Inception
RETURNS 5.14 0.26 12.06 -2.09 10.73 8.02 22.44

Fig 5.4

RELIANCE BANKING FUND – GROWTH

35
30
25
20
15
10
5
0
-5
-10
6 Since
1 Month 3 Months 1 Year 3 Years 5years
Months Inception
RETURNS 6.7 4.22 28.35 -5.84 16.08 15.93 28.22

Fig 5.5


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