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    Chapter Chapter Document Transcript

    • 1 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR CHAPTER-1 EXECUTIVE SUMMARY:- The project work is pursued as a part of MBA (FINANCE) Curriculum at LOVELY PROFESSIONAL UNIVERSITY, JALANDHAR. It is undertaken as a traineeship at Reliance securities Ltd. The project is done under expert supervision and guidance of prof. Miss Razia sehdeva (Lecturer Finance) and Mr SANTOSH JHA (Centre Manager, Reliance Securities under Reliance capital) the project is about the marketing and sales of financial products and also the efforts done to make improvements in the customer acquisition process for better results. At RELIANCE SECURITIES, initially the trainees were imparted process and product knowledge. They were given sufficient time to know about the products such as demate and trading A/C, Equity, ADB, Life insurance, Mutual fund, Structure product, currency, Terminal portal also about sales and distribution channel, They had to work with the sales representatives of the Distributor and think of ways of improving the sales and distribution channel and implementing them. The main aim was to increase the marketing actual knowledge, interact to customer and pitch the product, and learn about the customer need and demand about the customer, also gain the financial product knowledge and deeply stock market knowledge. And learn briefly about those parameters and ratio which basis we choose the mutual fund scheme. For the study of selection of mutual fund schemes we are 5 different companies’ schemes and evaluate those on such parameter, CAGR, Standard deviation, Beta, Sharpe ratio on the basis of historical data. And after interpretation and finding result basis we come this stage where you can select the final fund.
    • 2 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR OBJECTIV OF STUDY:- Practical-work is very important in any professional-course it I well known that any professional- course give only 20% knowledge throw rest of 80% we got from practical tanning which concluded with the submission of “PROJECT REPORT “ is an important part of professional course. But we can’t avoid the importance of theoretical part of the course, because without knowledge of theory not perfect s for practical. Theory provide the base of the knowledge As a student of management I have also been strongly convened with the above concept of study. I also support that sound theoretical knowledge and good practical work both are the pillar of the profession. Before the tanning we have only theoretical knowledge which we can’t say complete knowledge. The main aim was to increase practical knowledge and face the actual problem of market where how implement our theoretical knowledge. They were provided with database and had to make cold calls from the data. Company activity was also one of the major sources for generating business. Initially they even accompanied sales representatives to the clients place. Main objective was to know the need of the customer and how to fulfil that in the best way. Objective of the study of key parameters and ratio to select the mutual fund scheme is evaluate the fund on scheme which give the good return to the investor. Investor are interested to know about the different type of return and risk. Being a student of financial management my main aim and basic objective of study key parameters and ratio was following:-
    • 3 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR 1) To know about the profit earnings ratio of investment. 2) To know about the risk of the fund. 3) Compare the different mutual fund. 4) Evaluate the ratio of profit earning. 5) To know about the different opportunity of investment in mutual fund. SCOPE OF THE STUDY:- The scope of the study refers to the job that to know about the activities of the organization. The study means that the analysis of the products of the company on which basis investor selects the scheme. During the summer training the volunteer need to find out the corporate strategies of the running company and the mile stone which the company has covered during its journey. In the summer training, it is necessary for the student that he involve with the experience guys to get the knowledge about the company. That is how the company has got the success, Or if it is going in the loss, why. In my training period I have found that the reliance group is the biggest group in Indian companies. I felt that I can learn the more in the METHDOLOGY USED:- A sample of 5 scheme each from 3 different type of fund taken are follows: Diversified fund, Large CAP fund, Sector fund analysis has been done by using following statistical tools: Sharpe ratio, Beta, standard deviation and return basis. To make a “project work” successful following aspect are required:- 1. A sound theoretical knowledge of the subject of the mutual fund. 2. Select the data from the historical data as a sample for knowledge. 3. And on the basis of the parameters and ratio analyse select the scheme.
    • 4 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR SIGNIFICANCE: - Able to learn the various analytical tools of Mutual Fund like Beta, Standard Deviation, Compounded annual growth rate (CAGR) and Sharp Ratio. Get complete overview of Mutual Fund industries in India. Able to know the past performance of various Mutual Funds Schemes. LIMITATIONS: Not single work is an exception to the limitation every work has got it limitations. The data collected here in this project is strictly confined to the secondary sources. No primary data was associated with the project. Collecting historical NAV and various details is very difficult. Selection of the schemes for the study is very difficult task because wide variety schemes. The result of the study are subjected to inconsistencies arising out of the assumption to make the portfolio comparable viz sample selection procedure, portfolio proportion assumption etc.
    • 5 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR ON-JOB-TRAINING INTRODUCTION I have been done my summer internship in Reliance Securities Private Limited to perform various activities undertaken by an E broking firm (Depository Participant). OBJECTIVE Reliance Securities Pvt. Ltd. Performs as intermediary between stock exchange and clients. Various task related to e broking has been assigned to me. The main objectives are as follows: · To understand various activities in E-Broking firm. (D P). · To get familiar with the working of online trading. · To gain practical knowledge in share trading. · To get an exposure TASK ASSIGNED · Market observation · Customer acquisition. · Technical Issues · Administrative tasks · Customer follow-up MARKET OBSERVATION It was the basic task assign during the SIP. While working with an e broking firm it very essential to be aware about the current market issues like current market news, Current market position, stock watch, global market condition, past trend of the market etc. It was also imperative to target particular stocks & track their daily movements. By targeting & tracking individual stocks & scripts, it helped me understand the various factors that lead to stocks price movements. Also taking with clients during market hours helped me to understand the investment psychology of the client.
    • 6 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR CUSTOMER ACQUISITION To acquire new customers for the company it was the task given to me. 2 new Demat accounts, 5 MGP account have been opened in this duration. Strategy in acquiring new customers · Reference by existing customers. · Lead by company guide · Tele calling (by lead data) · Cold callings TECHNICAL TASKS Various technical tasks has been performed like, software down loading, to give software demonstration to the clients, solving various problems of the clients regarding software handling etc. ADMINISTRATIVE TASK These were the secondary task given bellow, which has been performed during the training period. · Completion of account opening form. · Collection of requires documents from existing clients. · Margin funding form. · To transfer shares.
    • 7 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR CUSTOMER FOLLOW-UP Follow-up has been given to newly acquire as well as existing clients for various issues. Trading for offline clients under the relationship manager’s guidance. To give markets updates to newly acquire as well as existing clients in market duration, etc. ACHIEVEMENTS Stock Market observation has been done during internship period. · 2 new clients have been acquired. · Companies trading software has been downloaded. · Software demonstration has been given to newly acquire as well as existing clients. · Various administrative activities have been performed. · Follow-up to the customer has been given. · Company generated brokerage from the newly acquired customer by me during the internship period. · Offline customer’s orders have been taken in regular market schedule. LIMITATIONS · It was hard to acquire knowledge about this field in such short span of time · Share market is very vast & fast sector, it was very difficult to cope-up with the environment in such short span of time. · This field is requiring with very deep fundamental & technical knowledge. · Acquiring new clients it was the tough task to perform. · High risk involve while trading on behalf of the clients under the guidance of RM.
    • 8 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR CONCLUSION Learning Experience: In my summer training, I knew about the stock market and its nitty-gritty. And now I am confident about equity knowledge. Although nobody can claim complete expertise but there is a sea change at least from our point of view. I have learnt what are the various indices and their significance in market. I have learnt about various fundamentals and technical aspects, which affect the stock prices in short run and long run. Selling Experience: Apart from this my specific task is to sell the Demat accounts. During this venture I came across many people who came from different walks of life. I learnt how to deal with them, how to persuade them and guide them in trading. Selling an online trading account requires special focus on targeting the customers. Each and every person does not trade / invest in the stock market. Actually what I had to do was to identify the prospect and then convince them. As we met more and more people, we came to know more about how to talk to them, how much time be given to each person we met. Even, by solving the customer queries, my own understanding was enhanced. While selling the product in the market, I also came to know more about competitor’s product like, icicidirect.com, India bulls and their strategy of marketing and the consumer’s preference towards the competitor’s product. After forms were filled clients after the procedures were given client Id. After that, I was required to show the customer how to make a transaction and how to get access to the
    • 9 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR terminal. Also, other queries, which the customer faced, had to be solved by us. So, it was all a very good learning experience for me. There were senior trainees always to solve the difficulties I faced in approaching a customer, filling up the form, demonstrating the site, or solving their queries. I faced some bad and resentful experiences like being sent out of offices and waiting for hours for a customer and went to the customer again in case if a signature is left in the form or in occurrence of any proof problems. This was again a learning to increase my tolerance and be more careful while filling up the form.
    • 10 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR CHEAPTER 2 INTRODUCTION:- Mutual fund: - An open- ended fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Mutual funds raise money by selling shares of the fund to the public, much like any other type of company can sell stock in itself to the public. Mutual funds then take the money they receive from the sale of their shares (along with any money made from previous investments) and use it to purchase various investment vehicles, such as stocks, bonds and money market instruments. In another words we can say that’s a mutual fund is 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 investors invest in a mutual fund, they are buying units or portions of the mutual fund and thus on investing becomes a 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. Mutual funds are set up to buy many stocks. Beyond that, investors can diversify even more by purchasing different kinds of stocks which helps to spreading out investors’ money across
    • 11 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR different types of investments and hence, reduces risk tremendously up to certain extent. It could take you weeks to buy all these investments, but if you purchased a few mutual funds you could be done in a few hours because mutual funds automatically diversify in a predetermined category of investments. CONCEPTUAL FRAME WORK OF MUTAL FUND:- A mutual fund is constituted as a public trust created under the Indian Trust Act, 1882. SEBI (mutual fund) regulations, 1996 regulate the structure of the mutual funds in India. As per these regulations should have the following three-tier structure: i) Sponsor ii) Trust/trustee iii) Asset Management Company
    • 12 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR Apart from this mutual fund consists Sponsors:- Sponsor is the person who acting alone or in combination with another body corporate establishes a mutual fund. The sponsor establishes the mutual fund and registers the same with SEBI. Sponsor appoints the Trustees, custodians and the AMC with prior approval of SEBI and in accordance with SEBI Regulations. Sponsor must have a 5-year track record of business interest in the financial markets. Sponsor must have been profit making in at least 3 of the above 5 years. Sponsor must contribute at least 40% of the net worth of the Investment Managed and meet the eligibility criteria prescribed under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996.The Sponsor is not responsible or liable for any loss or shortfall resulting from the operation of the Schemes beyond the initial contribution made by it towards setting up of the Mutual Fund. Trust:- The Mutual Fund is constituted as a trust in accordance with the provisions of the Indian Trusts Act, 1882 by the Sponsor. The trust deed is registered under the Indian Registration Act, 1908.
    • 13 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR Trustee:- Trustee is usually a company (corporate body) or a Board of Trustees (body of individuals). The main responsibility of the Trustee is to safeguard the interest of the unit holders and inter alia ensure that the AMC functions in the interest of investors and in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, the provisions of the Trust Deed and the Offer Documents of the respective Schemes. At least 2/3rd directors of the Trustee are independent directors who are not associated with the Sponsor in any manner. Asset Management Company (AMC) The AMC is appointed by the Trustee as the Investment Manager of the Mutual Fund. The AMC is required to be approved by the Securities and Exchange Board of India (SEBI) to act as an asset management company of the Mutual Fund. At least 50% of the directors of the AMC are independent directors who are not associated with the Sponsor in any manner. The AMC must have a net worth of at least 10 crore at all times. Registrar and Transfer Agent The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer Agent to the Mutual Fund. The Registrar processes the application form, redemption requests and dispatches account statements to the unit holders. The Registrar and Transfer agent also handles communications with investors and updates investor records. Custodian: A custodian is an agent, bank, trust company, or other organization which holds and safeguards an individual's, mutual funds, or investment company's assets for them.
    • 14 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR TYPES OF MUTUAL FUND SCHEMES There are a wide variety of Mutual Fund schemes that cater to your needs, whatever your age, financial position, risk tolerance and return expectations. Whether as the foundation of your investment program me or as a supplement, Mutual Fund schemes can help you meet your financial goals. TYPES OF MUTUAL FUND SCHEME (AI) By Structure Open-Ended Schemes These do not have a fixed maturity. You deal directly with the Mutual Fund for your investments and redemptions. The key feature is liquidity. You can conveniently buy and sell your units at Net Asset Value ("NAV") related prices. Close-Ended Schemes Schemes that have a stipulated maturity period (ranging from 2 to 15 years) are called close- ended schemes. You can invest directly in the scheme at the time of the initial issue and thereafter you can buy or sell the units of the scheme on the stock exchanges where they are listed. The market price at the stock exchange could vary from the scheme's NAV on account of demand and supply situation, Unit holders' expectations and other market factors. One of the characteristics of the close-ended schemes is that they are generally traded at a discount to NAV but closer to maturity, the discount narrows. Some close-ended schemes give you an additional option of selling your units directly to the Mutual Fund through periodic repurchase at NAV related prices. SEBI Regulations ensure that at least one of the two exit routes are provided to the investor.
    • 15 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR Interval Schemes These combine the features of open-ended and close-ended schemes. They may be traded on the stock exchange or may be open for sale or redemption during predetermined intervals at NAV related prices. (B) By Investment Objective Growth Schemes Aim to provide capital appreciation over the medium to long term. These schemes normally invest a majority of their funds in equities and are willing to bear short-term decline in value for possible future appreciation. These schemes are not for investors seeking regular income or needing their money back in the short term. Income Schemes Aim to provide regular and steady income to investors. These schemes generally invest in fixed income securities such as bonds and corporate debentures. Capital appreciation in such schemes may be limited. Ideal for Retired people and others with a need for capital Stability and regular income Investor who need some income to supplement their earnings.
    • 16 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR Balanced Schemes Aim to provide both growth and income by periodically distributing a part of the income and capital gains they earn. They invest in both shares and fixed income securities in the proportion indicated in their offer documents. In a rising stock market the NAV of these schemes may not normally keep pace, or fall equally when the market falls. Ideal for: Investors looking for a combination of income and moderate growth. Money Market/Liquid 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. Returns on these schemes may fluctuate, depending upon the interest rates prevailing in the market. Ideal for: Corporate and individual investors as a means to park their surplus funds for short periods or awaiting a more favorable investment alternative. Other Schemes Tax Saving Schemes These schemes offer tax rebates to the investors under tax laws as prescribed from time to time. This is made possible because the Government offers tax incentives for investment in specified avenues. For example, Equity Linked Savings Schemes (ELSS) and Pension Schemes. The details of such tax saving schemes are provided in the relevant offer documents.
    • 17 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR Ideal for: Investors seeking tax rebates. Special Schemes This category includes index schemes that attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE 50, or industry specific schemes (which invest in specific industries) or sectorial schemes (which invest exclusively in segments such as A Group shares or initial public offerings) Different Modes of Receiving the Income Earned From Mutual Fund Investments Mutual funds offer three methods of receiving income: Growth Plan: In this plan, dividend is neither declared nor paid out to the investors but it is built into the value of the NAV. In the other words, the NAV increases over time due to such incomes and the investor realizes only the capital appreciation on redemption of his investment. Income plan or Dividend Pay-out Plan: In this plan, dividends are paid-out to the investors. In other words, the NAV only reflects the capital appreciation or depreciation in the market price of the underlying portfolio.
    • 18 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR Dividend Reinvestment Plan: In this plan, dividend is declared but not paid out to the investors. Instead, it is reinvested back in to the scheme at the then prevailing NAV. In other words, the investor is given additional units and not cash as dividend. Mutual Fund Investment Strategies Systematic Investment Plan (SIP): SIPs entail an investor to invest a fixed sum of money at regular intervals in MF scheme the investor has chosen. This may help you gain from any appreciation in the event of upside or alternatively, average your cost during downside. Seeing the present volatility in the market SIP is the best option available to the investor due to regular entry into the market which causes rupee cost averaging and hence covers the volatility. Systematic Withdrawal Plan (SWPs): These plans are best suited for people nearing retirement. In these plans investor invest in a mutual fund scheme and is allowed to withdraw a fixed sum of money at regular intervals to take care of expenses. Systematic Transfer Plan (STP): They allow the investor to transfer on a periodic basis a specified amount from one scheme to another with in the same fund family meaning two schemes belonging to the same mutual fund. A transfer will be treated as redemption of units from the scheme from which the transfer is made.
    • 19 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR Advantage of mutual fund: a) Professional Management- The basic advantage fund is that, they are professionally managed by well qualified professional. Investors purchase funds because they have no time or the expertise to manage their own portfolio. b) Diversification- purchasing units in a mutual fund instead of buying individual stock or bonds, the inventors risk is spread out and minimized up to certain extent. The idea behind diversification is to invest in a large number of assets so that a loss in a particular investment in minimized by gains in others. c) Economic of scale –Mutual fund buy and sell large amounts of securities at time, thus help to reducing transaction costs, and help to bring down the average cost of the unit for their investors. d) Liquidity- just like an individual stock, mutual fund also allows investors liquidity their holdings as and when they want. e) Simplicity- investments in mutual fund is considered to be easy, compare to other available instruments in the market, and the minimum investment is small. Most AMC also have automatic purchase plans whereby as little as Rs. 2000, where SIP start with just Rs 50 per month basis. Disadvantages of mutual fund: a) Professional Management- some fund don’t perform according to market, as their management is not dynamic enough to explore the available opportunity in the market, thus investor loose their money.
    • 20 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR b) Costs- The biggest source of AMC income is generally from the entry & exit load which they charge from investors, at the time of purchase. The mutual fund industries are thus charging extra cost under layers of jargon. c) Dilution- because fund have small holdings across different companies, high returns from a few investments often don’t make much difference on the overall return. Dilution is also the result of successful fund getting too big. When money pours into funds that have had strong success, the manager often has trouble finding a good investment for all the new money. d) Taxes – when making decisions about your money, fund manager don’t consider your personal tax situation, for example, when a fund manager sell a security, a capital-gain tax is triggered, which affects how profitable the individual is from the sale. It might have been more advantageous for the individual to defer the capital gains liability.
    • 21 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR History of mutual fund: Unit Trust of India is the first Mutual Fund set up under a separate act, UTI Act in 1963, and started its operations in 1964 with the issue of units under the scheme US-641. In 1978 UTI was delinked from the RBI and Industrial Development Bank of India (IDBI) took over the Regulatory and administrative control in place of RBI. • In the year 1987 Public Sector banks like State Bank of India, Punjab National Bank, Indian Bank, Bank of India, and Bank of Baroda have set up mutual funds.• Apart from these above mentioned banks Life Insurance Corporation [LIC] and General Insurance Corporation [GIC] too have set up mutual fund. LIC established its mutual fund in June 1989.while GIC had set up its mutual fund in December 1990. The mutual fund industry had assets under management of Rs. 47,004 crores.• With the entry of Private Sector Funds a new era has started in Mutual Fund Industry [e.g.:- Principal Mutual Fund.] Mutual Fund Regulations the second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76, 000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.
    • 22 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR CHAPTER -3 COMPANY PROFILE About the Company Reliance Securities Ltd (Reliance Securities), a Reliance Capital company is one of the leading brokerage houses and distribution arms of the Reliance Anil Dhirubhai Ambani Group (RDAG). The firm was established in 2005 and offers comprehensive services such as trading in equity, derivatives, investment banking, portfolio management services (PMS), wealth management services (WMS), research & distribution of financial products such as mutual funds, insurance and IPO’s among others. Reliance Securities is present in the currency and debt market segment as well. Company History: Reliance Capital Limited (RCL) was incorporated in year 1986 at Ahmadabad in Gujarat as Reliance Capital & Finance Trust Limited. The name RCL came into effect from January 5, 1995. In 2002, RCL shifted its registered office to Jamnagar in Gujarat before it finally moved to Mumbai in Maharashtra, in 2006. In 2006, Reliance Capital Ventures Limited merged with RCL and with this merger the shareholder base of RCL rose from 0.15 million shareholders to 1.3 million. RCL entered the Capital Market with a maiden public issue in 1990 and in subsequent years further tapped the capital market through rights issue and public issues. The equity shares were initially listed on the Ahmadabad Stock Exchange and The Stock Exchange Mumbai. Presently the shares are listed on The Stock Exchange Mumbai and the National Stock Exchange of India. RCL in the initial years engaged itself in steady annuity yielding businesses such as leasing, bill discounting, and inter-corporate deposits. Later, in 1993 diversified its business in the
    • 23 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR areas of portfolio investment, lending against securities, custodial services, money market operations, project finance advisory services, and investment banking. RCL was accredited a Category 1 Merchant banker by the Securities Exchange Board of India (SEBI). It had lead managed/co-managed 15 issues of an aggregate value of Rs. 400 crore and had underwritten 33 issues for an aggregate value of Rs. 550 crore. All these companies were listed on various exchanges. RCL obtained its registration as a Non-banking Finance Company (NBFC) in December 1998. In view of the regulatory requirements RCL surrendered its Merchant Banking License. Market & Network Reliance Securities acquired memberships of the premium stock exchanges in India, namely BSE and NSE in 2005 and 2006 respectively. It offers trading facilities in the cash and derivatives market segment of both NSE and BSE. The company provides trading in the debt market segment as well. It also acts as a DP with CDSL. Reliance Securities’ website – www.rsec.co.in also facilitates trading in commodities for its partner company, Reliance Commodities Ltd which holds memberships in NCDEX, MCX and NMCE Reliance Securities is headquartered in Mumbai with operations across all major Indian cities. Majority of the company’s terminals are located in Mumbai. It has a vast network spread across 3,393 cities, with 116 offices, and 2,822 equity broking terminals allocated to 2,943 registered sub-brokers.
    • 24 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR As on Dec 31, 2009, Reliance Securities had 73 NEAT terminals, 40 BOLT terminals and 2,709 CTCL licenses. During the same period, the company added 1, 84, 550 client accounts of which 1, 82,720 were e-broking accounts. Products and Services Trading: Reliance Securities facilitates trading activities in all the major market segments including, cash, derivatives, and debt, currency futures. The company offers online trading facility through its website, www.rsec.co.in. Reliance Securities has recently migrated all its customers to its new trading platform, Insta Plus and Insta Express. Apart from internet trading, customers are also provided with the option of trading through the Call & Trade facility and through RSec.mobi, a personal mobile phone service. Clients can place and track their orders on BSE and NSE on a real time basis with access to RSec.mobi. This facility is available to Reliance Securities trading account holders across all mobile platforms independent of device, operator and the underlying carrier technology. Investment Banking: Reliance Securities also offers Investment Banking services. Distribution of Financial Products: Reliance Securities is involved in the distribution of financial products such as mutual funds, insurance and IPO’s. DEMAT Services: The company offers DEMAT services through Reliance Capital and is a registered member with NSDL and CDSL. PMS: Reliance Securities is a SEBI registered portfolio manager and offers customized services to their client which is designed to meet their investment objectives. These services cover all administrative aspects while providing periodic reporting to clients.
    • 25 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR WMS: The Company makes available Wealth Management Solutions to its customers Research: Reliance Securities offers research based services to its clients. Its research wing encompasses 100 companies across 20 sectors. This division offers complete research solutions on IPOs, mutual funds, economic research and other special reports and newsletters. Insurance: Reliance Securities also provides a range of insurance products including life insurance and general insurance through Reliance Composite Insurance Broking. NRI Services: NRI clients can place orders using the new their trading platform such as Insta plus and Insta Express. NRI’s can execute their securities transactions under the provisions of the RBI guidelines for NRI Portfolio Investment Scheme (PIS). FUTURE PLAN:- PLAN FOR CHILDREN’S FUTURE: Children future planning is all about arranging a corpus to meet known expenses like there higher education & wedding. Children’s education & marriage is amongst the most important goal in our life. If cost of higher education e.g. MBA is Rs. 5 lakh today, After 18 years when your child is ready to pursue higher education, the same higher education will cost you Rs. 14.27 lakhs Our innovative tool will help you to find out • Whether your current savings set aside for this goal are sufficient enough to meet these goals or
    • 26 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR • How much additional amount you need to save & invest to achieve these goals. CALCULATE YOUR SAVINGS: Systematic Investment Planning (SIP) may get complicated if you have just lost track, with our SIP Calculator, calculate NAV, number of units purchased, SIP Value & Index Value, all in a bifurcated systematic manner. ASSET PURCHASE GOAL: Owning your own house / car, whether it’s your first one or the one which you have dreamt of, can create a great sense of pride and accomplishment. Accomplishing of these goals requires planning. You should plan for these goals early. Our innovative tools will help you to plan for these goals. LIVE COMFORTABLY POST RETIREMENT: Dying too early is a risk & living too long is another risk. Retirement planning cater to the latter. People generally think of retirement planning as distant future goal however it is important to understand that this goal cannot be deferred for long. It is important to plan for your post retirement due to shift to nuclear families & knowing that longevity is on increasing side. You need to know • What is the corpus required to meet your post retirement expenses? • Whether your current savings set aside for retirement is sufficient enough to meet that corpus? • How much additional amount you need to save & invest to achieve that corpus?
    • 27 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR COMPARE FUNDS FOR BETTER INVESTMENTS: There are a number of Mutual Funds available, confused which one to buy? With Reliance Securities Fund Compare Tool, you can now compare various available funds and invest in the best one suited for you. Success sutras of Reliance securities. The success story of the company is driven by 8 success sutras adopted by it namely trust, integrity, dedication, commitment, enterprise, hard work and team play, learning and Innovation, empathy and humility. These are the values that bind success with Reliance securities. Vision of Reliance securities Reliance securities achieve & sustain market leadership, Reliance securities shall aim for complete customer satisfaction, by combining its human and technological resources, to provide world class quality1services. In the process Reliance securities shall strive to meet and exceed customer's satisfaction and set industry standards. Mission statement “Our mission is to be a leading and preferred service provider to our customers, and we aim to achieve this leadership position by building an innovative, enterprising , and technology driven organization which will set the highest standards of service and business ethics.”
    • 29 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR CHEAPTER-4 STUDY ABOUT PARAMETERS AND RATIO: Return:- Return on a typical investment consist of two components. The basis is the periodic cash receipts (or income) on the investments, 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. The elements of returns is difference between purchase price and the price which the assets can be or sold: there for it can be gain or loss . The return has been calculated as under NAV1- NAV2 Portfolio return: Rit=…………. Where Rit is the difference between net assets values for two consecutive days dividends by the NAV of the preceding day. M.indt - M-indt-1 Market return: Rmt=………………………………. Risk: - Risk neither good nor bad. Risk is holding securities is generally associated with the possibility that realized return will be less than expected returns. The difference between the required rate of returns on the mutual funds investment and the risk free return is the premium. Risk can be measured in terms of Beta & standard deviation.
    • 30 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR Standard deviation:- it is use to measure the variation in individual returns from the average expected return over a certain period. Standard deviation is used in the concept of risk of a portfolio of investment. Higher standard deviation means great fluctuation in expected return. SD= Beta:- Beta measure the systematic risk and 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 riskier than market. If beta is greater 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. Β = cover/(SD)2 Where, covariance (cover) is the average of the product of deviations for each data point pair. And, cover is calculated as: Covar= 1/n∑ (xi -µx) (Yi - µy) Where, x= scheme returns. Y= market returns. µ= mean. β= n∑xy-(∑x) (∑y) n∑x2-(∑x) 2 Where, n=number of years X= rolling return of the BSE index Y= rolling return of the schemes
    • 31 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR Sharpe index:- Sharpe index measure risk premium of a portfolio, relative to the total amount of risk in the portfolio. Sharp index summarizes the risk and return of a portfolio in a single measure that categorizes the performance of funds of on the risk adjusted basis. The larger the Sharpe’s index the portfolio over performs the market vise versa. Formula to calculated Sharpe’s measure is: St= Rp-Rf Where, St= Sharpe’s index Rp= portfolio return R= Risk free rate of return SD= standard deviation of the portfolio Treynor’s index; - Treynor’s models is on the concept of the characteristics line. The characteristics line has drawn relationship between market return and a specific portfolio without taking into considerations any direct adjustment for risk. It is also known as reward to volatility ratio and is defined as: The formula for the treynor’s index is: = Portfolio avg return (Rp)-risk free rate of interest (Rf) Beta coefficient of portfolio (Bp) Alpha:-
    • 32 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR The size of alpha exhibits the stock unsystematic return and average return independent market return. If the fund produced the excepted return at level of risk assumed, the fund would have an alpha equal to zero. A positive alpha indicates that the manager produced return greater than excepted for the risk taken. Alpha is calculated by comparing the fund’s actual performance with the risk- adjusted excepted return. Where Rp= portfolio Rf= risk free return (5%) Rn= Average market return Type of fund taken for analysis: a) Large cap fund: These are those type of funds which invest their money in large blue chip companies, having with a market capitalization of more than Rs 1000 crores. Investing in large cap is a low risk- return proportion because such funds are widely research and information available. One of the advantage of large cap funds are that they are less volatile than mid cap and small cap fund because investors are investing in this type of fund for a long term prospective and help to keep these fund away from the volatile of the markets. Top performer under this category: 1) HDFC Top 200 its compounded annualized returns of last 5 years is 24.5% 2) Reliance large cap fund: its compound annual returns of last 5 years is 22.6% 3) Franklin India blue chip : its compounded annual returns of last 5years 20.7% 4) Kotak 30: it’s compounded annualized returns of last 5 years 19% 5) DSPML top 100 equity: it’s returns last 5 years is 18.4% Sectors funds:
    • 33 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR These type of fund are investing their money in particular sector of the economy. Such as infrastructure, Banking, Retail, FMCG, etc. these funds are more volatile than diversified fund having stocks of many sectors. These short term investors, who are able to high risk ability. TOP performer under this category: 1) Reliance diversified power sectors fund (g): it’s compounded annualized returns of last 5 years 27.8% 2) Reliance Banking fund (G): it’s compounded annual returns of last 5 years 25.7%. 3) Reliance Pharms (G): it’s compounded annual reports of last five years 5 years 25.4%. 4) ICICI Prudential infrastructure Fund (G): it’s compounded annual reports of last five years is 20.5. 5) UTI Banking sectors fund (G): it’s compounded annual reports of last 5 years is 20.4%. Diversified funds: These are a kind of fund which invest their money in different sectors like FMCG, infrastructure, pharms, etc. this help to diversified there Risk into various sectors. If one sectors is going down then other sector may volatile in long term. TOP performer funds under this categories: 1) IDFC Premium equity fund- plan (G): It’s compounded annual reports of last 5 years is 26.9%. 2) Reliance regular saving fund- equity growth: it’s compounded annual reports of last 5 years is 26%. 3) HDFC Top 200 Growth: it’s compounded annual reports of last five year is 21.5%. 4) HDFC equity fund growth: it’s compounded annual report of last 5 year is 21.3% 5) Birla sun life frontline equity fund: it’s compounded annual reports of last 5 years is 21.2%.
    • 34 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR RELIANCE MUTUAL FUND: Reliance mutual fund is India’s leading mutual fund with the quarter average assets under management (AAUM) of Rs 102066 crores. Reliance mutual funds, a parts of the reliance – Anil dherubhai ambani group is one of the fastest growing mutual funds in the country. RMF offers investors a well- rounded portfolio of product to meet varying investor requirements and has presence in 159 cities across the country. Reliance Mutual fund constantly endeavours to launch innovative product and customer service initiatives to increase value to investors. Reliance mutual fund scheme managed by Reliance capital assets management limited. A subsidiary of reliance capital limited, which holds 93.37% of the paid- up capital of RCAM. The scheme that I have taken for analysis from reliance mutual fund are: RELIANCE BANKING FUND (G): 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 sectors. Fund overview: Fund type open Ended Investment plan Growth Assets sizes Rs1466Crores Launches date May 21, 2003 Benchmark Bank Nifty Fund manager Mr. Sunil singhania RELIANCE MEDIA & ENTERAINTMENT FUND (G): The primary investment objective of the scheme is to generate consistent returns by investing in equity/ equity related or fixed income securities of media & entertainment and other associated companies.
    • 35 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR Fund overview: Fund type open Ended Investment plan Growth Assets sizes Rs112.05crores Launch date Sep 27, 2007 Benchmark NA Fund manager Mr. Sailesh Raj Bha RELIANCE VISION (G): its objective is seeks to provide long term capital appreciation by primarily investing in growth oriented stocks. Fund overview: Fund type open Ended Investment plan Growth Assets sizes Rs 61 crores Launches date Aug’8, 2007 Benchmark BSE 100 Fund manager Mr. Ashwni Kumar UTI MUTUAL FUND: UTI mutual fund was started in14, January 2003 by UTI trustee co, pvt, ltd. For managing the scheme of UTI mutual fund. UTIAMC provides professionally managed back office support for all business service of UTI mutual fund in accordance with the previous of the investment management agreement, the trust Deed, the SEBI Regulators and the objective of the schemes. Since February 3, 2004, UTIAMC is also registered portfolio management services. UTIAMC also acts as the manager and marketer to offshore funds through is 100% subsidiary. UTI international limited, registered in Guemsey, Channel Islands.
    • 36 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR UTIAMC presently manages a capital of over Rs. 65, 38,724.42 lakhs as on 31st December 2010. UTI mutual fund has a track record of managing a verity of scheme catering to the needs of every class of citizens. It has a nationwide network consisting 148 UTI financial centres (UFCs) and UTI international offices in London, Dubai and Bahrain. UTIAMC has a well-qualified, professional fund management team, which has been fully empowered to manage fund with greater efficiency and accountability in the sole interest of the unit holders. UTIMF has consistently rest and upgrade transparency standards. All the branches, UFCs and register offices are connected on a robust it network to ensure cost- efficiency quick and efficient service. The scheme that I have taken for analysis from UTI mutual fund are: UTI INFRASTRUCTURE FUND (G): Investment objective is capital appreciation by investing in the companies engaged in the sectors like Metals, Real Estate, and oil: Gas, power, chemicals, Engineering etc. Fund overview Fund type open Ended Investment plan Growth Assets sizes Rs 1581 crores Launch date Aor7, 2004 Benchmark BSE 100 Fund manager Mr. Sanjay Dongre UTI LARGE EQUITY FUND (G): the scheme is designed specially for large corporate investors who would like to invest large corporate investors and as well as high net worth investors who like to invest large amount in executive scheme which allows entry and exit at NAV. Fund overview Fund type open Ended Investment plan Growth
    • 37 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR Assets sizes Rs2170 crores Launch date may18, 1992 Benchmark BSE sensitive index Fund manager Mr. Anoop Bhaskar UTI MID CAP FUND: It’s aims to provide to investors growth of capital over the period of time by investing in mid cap stock as well as to make periodical distribution of income from investment in stocks of respective sectors of the Indian economy. Fund overview: Fund types open Ended Investment plan Growth Assets sizes Rs375 crores Launch date Apr 07, 2004 Bench mark CNX mid cap Fund manager Mr. Anoop Bhaskar SBI MUTUAL FUND: SBI Mutual fund is India’s largest bank sponsored mutual fund and has a track record in judicious investments and consistent and wealth creation. The fund traces its lineage to SBI India largest banking enterprise. The institution has grown immensely since its inception and today it is India largest bank, patronized by over 80% of the top corporate houses of the country. SBI mutual fund is a joint venture between the state bank of India and society General assets management, one of the world’s leading fund management companies that manages over USS$500 Billion worldwide. In twenty years of operation, the fund has launched 38 schemes and successfully redeemed fifteen of them. In the process it has rewarded it’s investors handsomely with consistent returns.
    • 38 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR A total of over 5.8 million investors have respond their faith in the wealth generation expertise of the mutual fund. Today the fund manager over Rs 42100 crores of assets and has diverse profile of investors actively parking their investments across 38 active schemes. The fund serves this vast family of investors by reaching out to them through network of over 130 points of acceptance, 29 investor service centres, 59 investor service desks and 6 investor service points. SBI mutual is the first bank-sponsored fund to launch an offshore fund – resurgent India opportunity fund. The schemes that’s I have taken for analysis from SBI mutual fund are: SBI MAGNUM SECTOR UMBRELLA- PHARMA (G): It provides the investor’s maximum growth opportunity through equity investments in stocks of growth oriented sectors called pharms in long run. Fund overview: Fund types open Ended Investment plan Growth Assets sizes Rs 39.69 crores Launch date jul14, 1991 Benchmark BSE health care Fund manager Mr. Sohini Andani SBI MAGNAM EQUITY FUND (G): To provide investors long term capital appreciation along with the liquidity of an open-ended scheme. The scheme will invest in a diversified portfolio of equities of high growth companies. Fund overview: Fund types open Ended Investment plan Growth
    • 39 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR Assets sizes Rs 469 crores Launches date jan1, 1991 Bench mark BSE100 Fund manager Mr.srinivas SBI MAGNUM MID CAP: To provide investors with opportunities for long term growth in capital along with the liquidity of an open ended scheme by investing predominantly in a well-diversified basket of equity stocks of companies and in debt and money market instruments. Fund overview: Fund type open ended Investment plan Growth Assets sizes Rs 303 crores Launch date Mar 17, 2005 Benchmark CNX MID CAP Fund manager Mr. Sohini Andani FRANKLINE TEMPELTION MUTUAL FUND: Franklin tempeltion investment is one of the largest financial service group in the world based at san matco, California USA. The group has US$ 642.3 billion in assets under management globally. Franklin tempeltion has offices in 33 location across India and manages average AUM of Rs. 42142.21crores for over 22 lakhs investors (as on September 30, 2010). The schemes that I have taken for analysis from FRANKLINE TEMPLETION mutual fund are:
    • 40 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR FRANKLIN TEMPLETION FMCG FUND: The scheme aim to long term capital appreciation through exclusively investing in shares of fast moving consumer Goods companies. Fund overview: Fund types open Ended Investment plan Growth Assets plan Rs 51crores Bench mark NA Fund manager Anil prabhudas JM FINANCIAL MUTUAL FUND: It is one of India’s first private sector mutual funds an integral part of the first wave that commenced operations in 1993-1994.it is a part of JM financial Group, which has a rich heritage, built over three decade. Groups origins can be traced back to the 1950s when the company family began to get involved in India’s the capital markets. JM financial & investment consultancy service was founded on September 15, 1973. JM financial Assets management private limited started operations in December 1994 with a simultaneous launch of three funds-JM liquid fund (now JM income fund), JM equity fund and JM balanced fund. Today, JM financial mutual fund offers a bouquet of fund that caters to the diverse needs for both its institutional and individual investors. Its mission is manage risk while generating top quartile returns across all products categories. We believe that cultivate investors loyalty, we must provide a safe haven for their investment. We focused on helping our investors realize that investment goal through the prudent advice,
    • 41 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR judicious fund management, accurate research and strong system of managing risk scientifically. The scheme that I have taken for analysis from JM financial mutual fund are: JM LARGE CAP FUND (G): the scheme aim to provide long term capital appreciation from a portfolio that is invested predominantly in liquid and equity related instruments in the health care sectors. Fund overview: Fund type open ended Investment plan Growth Assets sizes Rs 51 crores Bench mark BSE health care sectors. Fund manager Mr. Sanjay chhabaria JM MID CAP FUND: the investment objective of the scheme is to provide capital appreciation by primarily investing in small and mid-cap stocks. Fund type open ended Investment plan Growth Assets sizes Rs 9.7 crores Launch date Jun 9, 2004 Fund manager MR. Sanjay chhabaria
    • 42 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR JM SMALL & MID CAP FUND: the investment objective of the scheme is to provide capital appreciation by primarily investing in small and mid-cap stocks Fund overview: Fund type open ended. Investment plan Growth Assets sizes Rs 5.8crores Launch date Mar9, 2007 Bench mark CNX MID CAP Fund manager MR. Sanjay chhabaria BIRLA SUN LIFE MUTUAL FUND: Birla Sun Life Assets Management Company Ltd (BSLAMC) between the Aditya Birla Group and the sun life financial service Inc. of Canada. The joint venture bring together Aditya Birla Group’s experience in the Indian market and sun life global experience. Birla Sun life mutual fund is established in 1994. It offer a range of investment opportunities, including diversified fund and sector specific equity scheme fund, hybrid scheme fund and monthly income fund, a wide range of debt and treasury products and offshore funds. BSLAMC is one of the largest team of research analysis in the industries, dedicated to taking down the best companies to invest in. BSLAMC strive to provide transparent, ethical and research based investments and wealth management services. The scheme I have taken to analysis from sun life mutual fund are: BIRLA SUNLIFE ADVANTAGE FUND: To achieve long term growth of capital through investment mainly in equity and equity related instrument.
    • 43 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR Fund overview: Fund type open ended Investment plan Growth Assets sizes Rs414 crores Launch date Feb 24, 1995 Bench mark BSE sensitive index Fund manager Mr. Ajay Agral BIRLA SUN LIFE SMALL AND MID CAP FUND: its objective is to generate consistent long term capital appreciation by investing predominantly in equity and equity related securities of companies considered to small and mid-cap it may also invest in certain portion of its corpus in fixed income securities including money market instrument in order to meet liquidity requirement of time to time. Fund overview: Fund type open ended Investment plan Growth Assets sizes Rs189 crores Launch date Apr 9, 2007 Bench mark CNX MID CAP Fund manager Mr. Ankit sancheti KOTAK MAHINDRA MUTUAL FUND: kotak Mahindra is one of the leading financial institutions, offering complete financial solution encompass every sphere of life. From commercial banking, to stock broking, to mutual fund, to life insurance, to invest banking, the group cater to financial need of individual and corporate. The group has net worth of Rs 7,911crore and employs around 20000 employees across its various business, servicing around 7 million customer accounts through a distribution network of 1716 Branches, franchise and satellite offices across more than 470 cities and towns in India and offices in New York, Caledonia, San Francisco, London, Mauritius and Singapore.
    • 44 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR Kotak Mahindra Assets Management Company Limited (KAMAMC), a wholly owned subsidiary of KMBL, is the asset manager for kotak Mahindra mutual fund (KMMF). KMAMC, is started operation in December 1998 and has over 10 lac investors in various scheme. KMMF offers schemes creating to investors with varying risk – return profile and was the first fund house in the country to launch a dedicated gilt scheme investing only in government securities. Fund overview: Fund type open ended Investment plan Growth Launch date Jan 28, 2005 Bench mark CNX Nifty junior Fund Manager Mr. Pankaj Tibrewal KOTAK EQUITY FUND: To generate long term capital appreciation from a portfolio creating by investing predominately in open-ended diversified equity schemes of mutual fund registered with SEBI. Fund overview: Fund type open ended Investment plan Growth Assets sizes Rs 49 crores Launch date Aug 09, 2004 Bench Mark NA Fund manager Mr. Sanjit Pishordi SUNDRAM BNB PARIBAS MUTUAL FUND:
    • 45 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR Sundram mutual fund identifying an investment opportunity long before as one is the heart of our business belief. Being in the financial sector for a long time has given as a great understanding of the Indian economy and that guides us while picking the companies for its fund. Once unearth a potential opportunity, its financial experts spend countless time to research the companies, to see what will deliver the best return to your money. Its financial experts are fine tuned to large global picture and all its complexities as well as intricacies of Indian market. We track global economy and market behaviour to better understand the domestic market. We are constantly on the trail of promising opportunities and once identified, a new theme is thoroughly researched and tested on various platform before being offered to the investing public. The fund schemes that have taken for analysis from sundram BNB PARIBAS mutual fund are: SUNDRAM BNB PARIBAS GROWTH FUND: It seek to achieve capital appreciation by investing in a well diversified basket of equities and equities related instruments. Income generation would be the secondary consideration. Fund overview: Fund type open ended Investment plan Growth Assets sizes - Launch date - Bench mark - Fund Manager - TATA MUTUAL FUND: Tata mutual fund has earned the trust of lakhs of investors with consistent performance and world class services.
    • 46 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR It manage round Rs20, 85400 crores (average AUM for the quarter of October- December 2010) worth of assets across its varied offering. Tata mutual fund offers an investment option for everyone, whether you are a businessman or salaried capital builder. The Tata assets Management philosophy is centred on seeking consistent, long term result. Tata Assets management aims at overall excellence, within the Frame work of transparent and rigorous risk control. Tata mutual fund offers investors a board range of managed investment products in various assets classes and risk parameters, with operational flexibility to suit their varied investment needs. It offer a wide range of service to assets investors have a fulfilling and rewarding financial planning experience with us. It have designed our services keeping in mind the need of our investors, giving them a smooth and hassle free financial planning process. The schemes that have taken for analysis from Tata mutual fund are: TATA DIVIDENT YIELD FUND: To provide income distribution and / medium to long term capital gains by investing predominantly in high dividend yield stocks. Fund overview: Fund type open ended Investment plan Growth Assets sizes Rs 177crores Launch date Oct 27 2004 Bench mark BSE sensitive index Fund manager Mr. Mahindra Jajoo/ Sachin relekar
    • 47 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR HDFC MUTUAL FUND: HDFC assets management companies’ ltd (AMC) was incorporated under companies Act, 1956 on December 10, 1999 and was approved to act as an assets management company for the HDFC mutual fund by SEBI vide its letter at July 3, 2000. In terms of the investment management Agreement, the trustee has appointed the HDFC assets management companies limited to manage the mutual fund. The paid up capital of AMC is Rs 25161crorer .the AMC is managing28 0pen –ended schemes of mutual fund some are Growth fund, HDFC EQUITY fund, HDFC TOP200: Its objective is to generate long term capital appreciation by investing in a portfolio of equities and equities linked instruments drawn from the BSE200 index. Fund overview Fund type open ended Investment plan Growth Launch date Oct 27 2004 Bench mark BSE 200 index Fund manager Mr, parshant Jain
    • 48 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR CHAPTER-4 DATA ANALYSIS: 1) CAGR INTERPRETATIONS: A)In last 1 year HDFC, TATA and Reliance gave maximum return of 102.2%, 103.7% and 96% respect, followed by Kotak and sundram by 86.03% and 71.5% respectively. 103.78 86.03 96 71.52 102.25 20.3 13.08 32.07 12.61 20.7 19.14 21.11 40.16 16.47 29.14 T A T A DIVIDE ND Y IE LDK OT A K E QUIT Y F OFRE LIA NC E DIVE RS IF IE D P OW E RS UNDRA M BA LA NC E F UNDH DF C T OP 200 Year/ schemes Tata Dividend yield Kotak Equity FOF Reliance Diversified Power Sundram Balance Fund HDFC TOP 200 Last 1 year 103.78 86.03 96 71.52 102.25 Last 3 year 20.3 13.08 32.07 12.61 20.7 Last 5 tear 19.14 21.11 40.16 16.47 29.14
    • 49 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR B)In last 3&5 year, Reliance gave maximum return against its competitors. Standard Deviation: INTERPRETATION: 0.08549113 0.09292427 0.101266115 0.068953248 0.09332788 0.099664831 0.09966483 0.111054683 0.082246954 0.0968572 0.087110732 0.11201375 0.09839249 0.082246954 0.0841035 T A T A DIVIDE ND Y IE LDK OT A K E QIT Y F OFRE LIA NC E DIVE RS IF IE D F UNDS UNDRA M BA LA NC E F UNDH DF C T OP 200 STANDARD DEVIATION last 1 year last 3 year last 5 year Year/ schemes Tata Dividend yield Kotak Equity FOF Reliance Diversified Power Sundram Balance Fund HDFC TOP 200 Last 1 year 0.0711419205 0.09292427 0.101266115 0.068953248 0.09332788 Last 3 years 0.099664831 0.09966483 0.111054683 0.082246954 0.0968572 Last 5 years 0.087110732 0.11201375 0.09839249 0.08549113 0.0841035
    • 50 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR A) As for as the standard deviation in last 1 year is concerned, it is high in Reliance which is .1 and low .o68. B) In the last 3 years, again Reliance has high standard deviation about .0.011 followed by kotak and Tata by 0.09 both. C) But in last 5 year Kotak is highly volatile followed by Reliance and Tata. D) BETA: 0.685522556 0.915633 0.970784506 0.839178531 0.889744 0.173402004 0.1508907 0.100171515 0.839178531 0.12755 -0.01188823 0.198572 0.970784506 0.120147547 0.1671198 T A T A DIVIDE ND Y IE LD K OT A K E QUIT Y F OF RE LIA NC E DIVE RS IF IE D P OW E R S UNDRA M BA LA NC E D F UND H DF C T OP 200 BETA last 1 years last 3 years last 5 years Year/ schemes Tata Dividend yield Kotak Equity FOF Reliance Diversified Power Sundram Balanced Fund HDFC TOP 200 Last 1 year 0.685522556 0.915633 0.97078450 6 0.839178531 0.889744 Last 3 years 0.173402004 0.1508907 0.10017151 5 0.094652253 0.127550 Last 5 tear -0.01188823 0.1985720 0.97078450 6 0.120147547 0.1671198
    • 51 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR INTERPRETATIONS: A) In last one year reliance has high beta .97 as compare to others. B) In last three years all the fund are less volatile with Nifty, but in last five years Reliance has high beta. Of .97, so it is high volatile. C) Tata dividend has low beta in all the year. Sharp Ratio: INTERPRATION: 2.82288 1.92184 1.941195962 1.78291329 2.18963153 0.54053 0.36523 0.75575441 0.34489246 0.551588391 0.46532 0.68236 0.991355024 0.50778455 0.82590418 T A T A DIVIDE ND K OT A K E QUIT Y F OF RE LIA NC E DIVE RS IF IE D P OW E R S UNDRA M BA LA NC E D F UND H DF C T OP 200 SHARP RATIO last 1 years last 3 years last 5 years Year/ schemes Tata Dividend yield Kotak Equity FOF Reliance Diversified Power Sundram Balance Fund HDFC TOP 200 Last 1 year 2.82288 1.92184 1.941195962 1.78291329 2.18963153 Last 3 year .54053 .36523 .75575441 .34489246 0.551588391 Last 5 tear .46532 .68236 .991355024 .50778455 0.82590418
    • 52 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR A) As for as last 1 year is concern, Tata has highest Sharpe ratio (2.8), followed by HDFC (2.1), Reliance (1.94), Kotak (1.92) and sundram (1.7). B) In last 3 years & 5 years, Reliance has highest Sharpe ratio against its competitors, C) Tata has low Beta in all the years. Sector fund: 1) CAGR (in %) Years/scheme Reliance Banking Franklin FMCG UTI Infrastructure SBI magnum pharma Reliance Media & Ent Last 1 years 120.55 68.77 66.77 112.96 18.94 Last 3 years 30.21 17.52 10.89 3.61 2.07 Last 5 years 25.37 21.73 23.23 12.31 88.77 INTERPRATATION: 120.55 68.77 66.77 112.96 18.94 30.21 17.52 10.89 3.61 2.07 25.37 21.73 23.23 12.31 88.77 BA NK ING F MC G INF RA S T RUC T URE P H A RMA ME DIA & E NT last 1 year last 3 years last 5 years
    • 53 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR A) In last years, banking and SBI gave highest return of 120% and 112.9% respective against competitors. B) In last three years Reliance banking gave highest return of 30.2 %. And in last 5 years reliance media & ENT maximum return of 88.7%. STANDARD DEVIATION: Years/sche me Reliance Banking Franklin FMCG UTI Infrastructu re SBI magnum pharma Reliance Media & Ent Last 1 years 0.1289433 75 0.05415499 4 0.094154994 0.0956267 97 0.1079924 07 Last 3 years 0.1158294 28 0.01158294 28 0.104597968 0.1045979 68 0.1187578 26 Last 5 years 0.1024895 84 0.06020592 2 0.09752141 0.0947086 4 0.1045544 54
    • 54 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR INTERPRATATION: A) In all the three years is concern Reliance Banking has highest standard Deviation, so it is highly volatile as compare to its competitors. B) Franklin FMCG is less volatile as compare to its competitors, so it is less risky to invest in this fund. Beta: Years/sche me Reliance Banking Franklin FMCG UTI Infrastructu re SBI magnum pharma Reliance Media & Ent Last 1 years 1.23072293 1 0.16291949 6 0.914220081 0.85286803 1.03158908 3 Last 3 years 0.21388727 7 0.05444464 5 0.096699523 0.13046722 8 0.23178450 3 Last 5 years 0.24802596 1 0.09334030 7 0.014594994 1 0.16879446 2 0.26664004 0.128943375 0.054154994 0.094154994 0.095626797 0.107992407 0.115829428 0.011582943 0.104597968 0.104597968 0.118757826 0.102489584 0.060205922 0.09752141 0.09470864 0.104554454 BA NK ING F MC G INF RA C S T RUC T URE P H A RMA ME DIA & E NT STANDARD DEVIATION last 1 year last3 years last 5 years
    • 55 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR INTERPRATATION: A) In last 1 years, Reliance Banking has high Beta of 1.2, so it is highly volatile as compare to its competitors. B) Overall, Franklin FMCG is less volatile as compare to its competitors, so it’s less risky to invest in this fund. Sharpe ratio: Years/schem e Reliance Banking Franklin FMCG UTI Infrastructur e SBI magnum pharma Reliance Media & Ent Last 1 years 1.86721063 6 2.6086068 3 1.550735632 1.91977976 6 1.73819063 7 Last 3 years 0.70161671 3 0.5940665 9 0.296815592 0.12578490 2 - 0.04470273 9 Last 5 years 0.64209473 0.7668029 8 0.611539329 0.33900012 2 0.40984207 1.230722931 0.162919496 0.914220081 0.85286803 1.031589083 0.213887277 0.054444645 0.096699523 0.130467228 0.231784503 0.248025961 0.093340307 0.014594994 0.168794462 0.26664004 BA NK ING F MC G INF RA S T URA C T URE P H A RMA ME DIA & E NT last 1 years last 3 years last 5 years
    • 56 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR INTERPRATATION: A) In last 1 years Franklin FMCG has highest Sharpe ratio of 2.6 as compare to its competition, so it is good indicator for it. B) In last 3 years Reliance Banking & Franklin FMCG has high Sharpe ratio of 0.7 and 0.5 respectively and reliance Media & Ent has lowest of -0.4. C) In last 5 years Franklin has highest Sharpe ratio of 0.7 and SBI has lowest of 0.3. Large cap fund: Years/scheme Reliance Vision UTI Equity JM large Cap Birla Sun life adv fund SBI magnum equity Last 1 years 88.44 82.65 48.28 14.48 94.09 Last 3 years 14.1 16.34 0.8 8.24 37.61 Last 5 years 23.39 18.02 7.94 18.16 21.11 1.867210636 2.60860683 1.550735632 1.919779766 1.738190637 0.701616713 0.59406659 0.296815592 0.125784902 -0.044702739 0.64209473 0.76680298 0.611539329 0.339000122 0.40984207 BNA K ING F MC G INF RA S T UC T URE P H A RMA ME DIA & E NT last 1 years last 3 years last 5 years
    • 57 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR INTERPRATATION: A) In last 1 years CAGR of SBI, Reliance Vision & UTI has high by 94%, 88.4%, and 82.6% respectively, as compare to its competitors. B) In last 3 & 5 years SBI gave highest returns of about 37.6% & 21.1 % respectively. C) Overall, Birla sun life adv fund gave least return. Standard Deviation: Years/schem e Reliance Vision UTI Equity JM large Cap Birla Sun life adv fund SBI magnum equity Last 1 years 0.0999137 6 0.074428 8 0.078338 3 0.11597324 2 0.097667 168 Last 3 years 0.1001844 0.083351 0.088863 0.11269396 0.105668 88.44 82.65 48.28 14.48 94.09 14.1 16.34 0.8 8.24 37.61 23.39 18.02 7.94 18.16 21.11 RE LIA NC E VIS ION UT I E QUIT Y JM LA RGE C A P BIRLA S UN LIF E F UND S BI MA GNUM E QUIT Y CAGR last 1 years last 3 years last 5 years
    • 58 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR 8 2 8 883 Last 5 years 0.0886405 9 0.078008 3 0.081352 2 0.09687164 2 0.095151 301 INTERPRATATIONS: A) In last 1, 3&5 years, Birla sun life adv, fund has high standard Deviation, so it is highly volatile as compare to its competitors. B) Overall, UTI Equity is least volatile fund among its competitors, so it is better to invest in such a less risky fund. Beta: 0.09991376 0.0744288 0.0783383 0.115973242 0.097667168 0.10018448 0.0833512 0.0888638 0.11269396 0.105668883 0.08864059 0.0780083 0.0813522 0.096871642 0.095151301 RE LIA NC E VIS ION UT I E QUIT Y JM LA RGE C A P BIRLA S UNLIF E A DV F UND S BI MA GNUM STANDARD DEVIATION last 1 year last 3 years last5 years
    • 59 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR INTERPRATATION: A) In last 1 year Birla sun life has a high beta of 1.1 as compare to its competitors, which shows high volatility. B) In last 1 year, Reliance vision has low Beta(0.17) C) JM large CAP in last 3&5 year also has low Beta about 0.7&0.1respectively, so its is less risky and safer to invest. 0.17248455 0.70786 0.7575292 1.128608674 0.93092074 0.13229572 0.1190345 0.0703577 0.165711517 0.13980907 0.17248455 0.1607937 0.1049985 0.206156923 0.182037128RE LIA NC E VIS ION UT I E QUIT Y JM LA RGE C A P BIRLA S UNLIF E A DV F UND S BI MA GNUM E QUIT Y BETA Series 1 Series 2 Series 3 Years/scheme Reliance Vision UTI Equity JM large Cap Birla Sun life adv fund SBI magnum equity Last 1 years 0.17248455 0.7078600 0.7575292 1.128608674 0.93092074 Last 3 years 0.13229572 0.1190345 0.0703577 0.165711517 0.13980907 Last 5 years 0.17248455 0.1607937 0.1049985 0.206156923 0.182037128
    • 60 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR SHARPE RATIO: Years/schem e Reliance Vision UTI Equity JM large Cap Birla Sun life adv fund SBI magnum equity Last 1 years 2.19170308 0.0140956 0 0.384419 6 1.74102981 3 1.80743058 Last 3 years 0.37702979 2 0.4621830 2 - 0.015875 8 0.23701981 3 0.20060521 5 Last 5 years 0.64603402 7 0.5301262 0.209397 7 0.48583637 8 0.53402252 INTERPRATATION: A) In last 1 year Reliance vision, SBI Equity & Birla sun life has high Sharpe Ratio about 2.1, 1.8, & 1.7 respectively, which shows good indicators. UTI has low which is .01. B) In last 3&5 years, JM large CAP has a less Sharpe ratio about -.01 & .2 respectively, which shows its poor performance. 2.19170308 0.0140956 0.3844196 1.741029813 1.80743058 0.377029792 0.46218302 -0.0158758 0.237019813 0.200605215 0.646034027 0.5301262 0.2093977 0.485836378 0.53402252 RE LIA NC E VIS ION UT I E QUIT Y JM LA RGE C A P BIRLA S UN LIF E A DV F UND S BI MA GNUM E QUIT Y SHARPE RATIO last 1 year last 3 years last 5 years
    • 61 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR FINDING & SUGGESTION: PERFORMANCE SHEET OF DIVERSIFIED FUNDS: Scheme CAGR (1Yr) CAGR (3yrs) CAGR (5Yrs) Rank (1yr) Rank (3yrs) Rank (5yrs) Tata dev 100 20.3 19.14 2 3 4 Kotak equity 86.03 13.08 21.11 4 4 3 Reliance diversified 100 32.07 40.16 3 1 1 Sundram balance 71.52 12.61 16.47 5 5 5 HDFC TOP200 102.25 20.7 29.14 1 2 2 Diversified funds: a) The performance of Tata Dividends & HDFC top 200 are better than their competitors because there Sharpe ratio & CAGR are relatively high against their competitors, there Beta & standard Deviation both are low. b) The performance of Reliance Diversified & sundram are poor because of their low Sharpe ratio & CAGR. Also they are more risky as compare to their competitors because of their high Beta. c) I would suggest giving first priority to HDFC TOP200 and second to Tata Dividend.
    • 62 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR PERFORMANCE SHEET (SECTOR FUNDS): Scheme CAGR (1Yr) CAGR (3yrs) CAGR( 5Yrs) Rank(1 yr.) Rank(3 yrs) Rank( 5yrs) Reliance Banking 120.55 25.37 25.37 1 1 2 Franklin FMCG 68.68 17.52 21.73 3 4 4 UTI Infrastructure. 66.77 10.89 23.23 2 3 3 SBI Pharma 112.96 3.61 12.31 4 5 5 Reliance Media & Ent 18.94 20.9 88.77 5 2 1 SECTOR FUND: a) The performance of Reliance banking on the Basis of CAGR is outperforming as compare to its competitors. Its Sharpe ratio is also good after Franklin FMCG. b) Those who wants take high returns as well as risk Reliance banking is good for them because its Beta is also high among its competitors. c) Those who wants keep them safe and able to take less risk, for them Franklin is better option..
    • 63 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR PERFORMACE SHEET (LARGE CAP FUND): LARGE CAP FUND: a) SBI & Reliance vision both have good CAGR and Sharpe ratio, but Reliance have very less Beta as compare to SBI, so Reliance should be the priority for investment. b) Large cap & Birla sun life adv both is poor performance as far as CAGR and Sharpe ratio is concerned, so try to avoid them CONCLUSION Mutual fund investment is better than other arising fund Reliance and SBI fund have good return under the large cap companies and you can also invest in HDFC TOP 200 and we have also opportunities in Reliance banking (sector fund), Tata Dividend yield . But the return of company and risk is not certain it vary time to time, in simple word we can say that other factor have also impact. The expectations of the customers are regularly increasing because of the increasing competition and emergence of global market. In such conditions it becomes very necessary for a company to fulfil all the expectations of the customers and give them a delightful experience. Scheme CAGR (1Yr) CAGR (3yrs) CAGR( 5Yrs) Rank(1 yr.) Rank(3 yrs) Rank(5 yrs) Reliance Vision 88.44 14.1 23.39 2 3 1 UTI Equity 82.65 16.34 18.02 3 2 4 JM large CAP 48.58 o.8 7.94 4 5 5 Birla sun life 14.48 8.24 18.16 5 4 3 SBI equity 94.19 37.61 21.11 1 1 2
    • 64 LOVELY PROFESSIONAL UNIVERSITY,JALANDHAR These financial instruments are risky and it is very essential to make the customer feel that you are taking care of his money. This can be done only in mutual fund scheme compare other financial scheme because mutual fund have professional management. REFERNCE BOOKS: 1) Donald E fisher, security analysis & portfolio management. 2) Business research methodology.( Naval Bajpayee) 3) Marketing Management. ( flip Kotler) WEBSITE: 1) http://www.bluechipindia.co.in 2) http://www.Franklintempletionindia .com 3) http://www. Utimf.com 4) http://www. Hdfc.com. 5) http://mutualfund.birlasunlife .com 6) http://www. reliancemutual.com 7) http://www.Investopedia.com 8) http://www.Money .rediff.com 9) http://www.Money control.com