Indu finance

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Indu finance

  1. 1. 1 CHAPTER 1 INTRODUCTION1.1INDUSTRY PROFILE A Mutual Fund is a trust that pools the savings of a number ofinvestors who share a common financial goal. The money thus collected isthen invested in capital market instruments such as shares, debentures andother securities. The income earned through these investments and thecapital appreciation realized are shared by its unit holders in proportion tothe number of units owned by them. Thus a Mutual Fund is the most suitableinvestment for the common man as it offers an opportunity to invest in adiversified, professionally managed basket of securities at a relatively lowcost. The flow chart below describes broadly the working of a mutual fund: Mutual Fund Operation Flow Chart1.1.1 ORGANIZATION OF A MUTUAL FUND
  2. 2. 2 There are many entities involved and the diagram belowillustrates the organizational set up of a mutual fund:1.1.2 ADVANTAGES OF MUTUAL FUNDS • Professional Management • Diversification • Convenient Administration • Return Potential • Low Costs • Liquidity • Transparency • Flexibility • Choice of schemes • Tax benefits • Well regulated1.1.3 TYPES OF MUTUAL FUND SCHEMES
  3. 3. 3 Wide variety of Mutual Fund Schemes exists to cater to the needssuch as financial position, risk tolerance and return expectations etc. Thetable below gives an overview into the existing types of schemes in theIndustry.1.1.4 TERMS USED IN MUTUAL FUNDNet Asset Value (NAV)
  4. 4. 4 Net Asset Value is the market value of the assets of the scheme minusits liabilities. The per unit NAV is the net asset value of the scheme dividedby the number of units outstanding on the Valuation Date.Sale Price Is the price we pay when we invest in a scheme. Also called OfferPrice. It may include a sales load.Repurchase Price Is the price at which a close-ended scheme repurchases its units and itmay include a back-end load. This is also called Bid Price.Redemption Price Is the price at which open-ended schemes repurchase their units andclose-ended schemes redeem their units on maturity. Such prices are NAVrelated.Sales Load Is a charge collected by a scheme when it sells the units. Also called,‘Front-end’ load. Schemes that do not charge a load are called ‘No Load’schemes.Repurchase or ‘Back-end’ Load
  5. 5. 5 Is a charge collected by a scheme when it buys back the units from theunit holders.
  6. 6. 61.2 COMPANY PROFILE KRISH FINANCE, is a premier integrated financial servicesprovider. Krish finance has a professional management team and ranksamong the best in technology, operations and research of various industrialsegments. The group of professionals founded the parent company in 2002 andtoday it has evolved as integrated financial service company of repute,offering various financial services to suit every requirement/ need byinvestors. By virtue of its access to million of Indian share holders, inaddition to companies banks and financial institutions. Krish finance hasbeen in the process built up a positive reputation with regulatory authoritiesand other government agencies emphasis on the following factors has beeninstrumental in helping them attain the leadership in the financial servicesector.Financial services provided by Krish finance: 1. Stock broking 2. Depository Participants 3. Distribution of financial products o Mutual funds, o Bonds, o Fixed deposit, o Equities,
  7. 7. 74. Insurance Broking5. Commodities Broking6. Personal Finance Advisory Services7. Merchant Banking & Corporate Finance8. Placement of equity9. IPO’s
  8. 8. 8Quality Policy To achieve and retain leadership, Krish finance shall aim for completecustomer satisfaction, by combining its human and technological resources,to provide superior quality financial services. In the process, Krish financewill strive to exceed Customers expectations.Quality Objectives:1. Build in-house processes that will ensure transparent and harmonious relationships with its clients and investors to provide high quality of services.2. Establish a partner relationship with its investor service agents and vendors that will help in keeping up its commitments to the customers.3. Provide high quality of work life for all its employees and equip them with adequate knowledge & skills so as to respond to customers needs.4. Continue to uphold the values of honesty & integrity and strive to establish unparalleled standards in business ethics.5. Use state-of-the art information technology in developing new and innovative financial products and services to meet the changing needs of investors and clients.6. Strive to be a reliable source of value-added financial products and services and constantly guide the individuals and institutions in making a judicious choice of it.7. Strives to keep all stake-holders (shareholders, clients, investors, employees, suppliers and regulatory authorities) proud and satisfied.
  9. 9. 9 CHAPTER II STATEMENT OF THE PROBLEM, SCOPE OF THE STUDY, OBJECTIVES, LIMITATIONS AND METHODOLOGY OF THE STUDY2.1 STATEMENT OF THE PROBLEM Mutual funds pool the funds of small investor and invest it in thesecurities. As the investors do not know in which portfolio the fundmanagers will go investment, the performance such as the risk and the returnassociated with each fund type will only affect the investor. Here the riskassociated with each type will vary, hence the return will also vary. Since theinvestors are investing based on the scheme category such as private orpublic sector funds. Costs are the biggest problems with mutual funds. These costs eat intoour return and they are the main reason why the majority of funds reasonwhy the majority of funds end up with sub par performance. Some cities ofthe industry say that mutual funds companies get away with the fees theycharges only the average investors does not understand what he/she ispaying for: fees can be broken allow into two categories. 1. On going yearly fees to keep is invested in the fund. 2. Transaction fees paid when we buy or sell shares in a fund.2.2 SCOPE OF THE STUDY
  10. 10. 10 This study was undertaken with the existing mutual funds in thewebsites. These funds are already used by the researcher for the analysis. This study covers various schemes for analysis. They are Escortsmutual fund, GIC mutual fund, JM mutual fund, Kotak mutual fund, INGVysya mutual fund, Taurus mutual fund, Reliance mutual fund.2.3 OBJECTIVES OF THE STUDY The analysis on the performance of private and public sector mutualfunds is made with2.3.1 Primary Objective To compare the public sector and private sector mutual fund performance.2.3.2 Secondary Objectives 1. To evaluate the performance of the funds based on market risk. 2. To increase returns on the portfolio through successful prediction of future securing prices. 3. To protect a company’s current earnings from competitive pressure through economic moat. 4. To provide a steady cash flow to investors.
  11. 11. 115. To evaluate the performance of the funds based on total risk.
  12. 12. 122.4 LIMITATIONS OF THE STUDY • Analysis and interpretation is only based on the open - end schemes. • Dividend schemes were not taken into consideration in this study. • This study considers the period between 2008-2010 and before and after this period were not taken into consideration. • The analysis and interpretation of the fund is based only on the past performance.
  13. 13. 132.5 METHODOLOGY OF THE STUDY The present study was conducted at Krish finance Private Limitedusing the secondary data. The main sources of secondary data are obtainedfrom company websites. Informal discussions were made with the industrystaff. During the course of discussions the staff expresses their opinionsregarding the funds.2.5.1 Data collection method Secondary data were used for analyses such as (NAV) andperformance of various schemes of the asset management companies. The net asset value (NAV) of the funds were collected from variouswebsites. The benchmark indices were collected from the respectivecompany’s fact sheets and also from the company’s common applicationforms.2.5.2 Research design "Analytic", it is important to clearly identify the objectives of the study (preferably identifying the specific parameters to be measured – see Rothman and Greenland) and the rationale (i.e., the case for conducting the research). There are innumerable decisions, judgments, and compromises that must be made during the design, conduct, analysis, and interpretation of a study, and the principal guideposts for making them are the study objectives and rationale. For example, if the objective is to test hypotheses,
  14. 14. 142.6 TOOLS USED FOR ANALYSISSharpe, Treynor and Jensen Method Portfolio performance was measured mostly in terms of returns inearly days, though there was an awareness of the concept of risk, which wasdifficult to quantify. Risk could not be incorporated in evaluation, as therewas no measures that combined both return and risk. Returns on portfoliosperformance are Sharpe Ratio, Treynor measure and Jensen measure. Theseare absolute measure of portfolio performance that can be used to rankdifferent portfolios.2.6.1 RETURN For each mutual fund scheme under study, the monthly returns arecomputed as: NAVt − NAVt −1 Ri = NAVt _ 12.6.2 AVERAGE R = ΣRi / n I = 1,2,3 …………….. n
  15. 15. 152.6.3 RISK Standard deviation : Measurement of Total Risk Financial analysts and statisticians prefer to use a quantitative risksurrogate called the clash of returns, denoted by αI. The standard deviation and he variance are equally acceptable andequivalent quantitative measures of an asset’s total risk. The variance andstandard deviation are computed from logarithmic monthly returns. [( ) σI = Σ Ri − R / n 2 ] 1/ 22.6.4 BETA Measurement of Systematic Risk To obtain the measure of systematic risk (Beta) of the mutual fundscheme, Market Model is applied. NΣ XY − EΣ ΣY β = NΣX 2 − (ΣX) 2
  16. 16. 162.6.5 RISK-LESS ASSET By definition, a risk less asset has zero variability of returns. If aninvestor buys an asset at the beginning of the holding period with the knownterminal value, such type of asset can be called as risk-less or risk free asset.Government securities and nationalized bank deposits fall under thiscategory. As the government securities are not easily available to thecommon man, we take the nationalized bank deposits as the risk free assetand the interest rate on such deposits are considered as risk free return.2.6.6 SHARPE RATIO This is a measure of risk-adjusted return on a portfolio. It is a ratio ofexcess return to the standard deviation of portfolio returns. An implicitassumption of the Sharpe ratio is that the portfolio is not combined withother risky portfolios. It is relevant for performance evaluation whencomparing mutually exclusive portfolios. The Sharpe measure follows his earlier work on capital asset pricingmodel (CAPM) dealing specifically with capital market line (CML).
  17. 17. 17 The Sharpe measure of performance denoted by S is given by Ri − Rf S = σiWhere,Ri = the average rate of return on portfolio ‘i’ during a specified timeperiod.Rf = the average rate of return on a risk free investment during the sameperiod
  18. 18. 182.6.7 TREYNOR MEASURE This is also a measure of risk-adjusted return on a portfolio. It is aratio of excess return to the systematic risk (β) of the portfolio. It is relevantfor performance measurement when evaluating portfolios separately or incombination with other portfolios. A high treynor measure indicated afavourable relationship between risk and return on the portfolio. Sharpe Ratio and Treynor measure give the same results in the case ofhighly diversified portfolios as the total risk of portfolios approaches that ofa market portfolio. Ri − Rf T = βWhere,Ri = the average rate of return on portfolio ‘i during a specified timeperiod.Rf = the average rate return on a risk free investment during the sameperiod.β = the slope of the fun’s characteristic line during that time period (thisindicates portfolio’s relative volatility with respect to market portfolio).
  19. 19. 19 A larger ‘T’ value indicates a better portfolio performance for allinvestors regardless of their risk performances. The numerator of this ratio(Ri-Rf) is the risk premium and the denominator is a measure of market risk.The Treynor measure is risk premium per unit of systematic risk.
  20. 20. 202.6.8 JENSEN’S ALPHA This is the difference between a fund’s actual return and the return ona benchmark portfolio with the same systematic risk (β) of the portfoliowhose performance is being valuated. It measures the ability of active fundmanagement to earn returns in excess of the reward for market risk. We caninfer meaningful results if it is used to compare two portfolios with similarbetas. Jensen’s measure is also based on capital asset pricing model. CAPMestimates the expected return on any security or portfolio by the followingexpression: E (Ri) = Rf + βi [E(Rm-Rf)Where, E (Ri) = expected return on security or portfolio I Rf = Risk free return βI = Systematic risk (beta) of security E (Rm) = expected return on the market portfolio IJensen’s alpha (α) is defined as: Ri – Rf = αI + βI (Rm-Rf) + εI
  21. 21. 21 The value of ‘aj’ suggests whether the portfolio manager possessessuperior (inferior) market timing and stock selection skills. A positive (α) isan indication of superior fund management ability.
  22. 22. 22 CHAPTER III REVIEW OF LITERATURE We cannot find only project on the comparison of the various types offunds. But a related project is found, the fund families being rated on theirperformance. This study was done by value research.3.1 METHODOLOGY OF THE STUDY Methodology is a way to systematically solve the research problem. Itexplains the various steps that are generally adopted by the researcher instudying the research problems along with the logic behind it.3.2 RESULTS OF THE STUDY The rating scores of a fund house majority of whose funds are un-rated may not depict the complete story.
  23. 23. 23 EQ Dbt Hybrid STEscort Growth plan 12 - - 17Escort income bond 6 4 13 6Escort Income Plan 14 19 - 17GIC Growth Plus II 22 21 14 1Escort Tax Plan 10 10 - 21GIC DMAT - 20 - 5Taurus star share 5 3 6 12LIC MF Equity Fund 11 1 7 -LIC Bond Fund 4 5 1 7LIC MF Govt. Security Fund 16 25 8 24Escort Balanced Fund 2 9 2 23Kotak Gilt Fund - 22 - 14GIC Opportunity Fund 23 23 17 3GIC Fortune 94 19 11 4 18JM Equity Fund 15 2 5 8Kotak Bond Fund 21 16 10 4ING Financial 9 6 15 9JM Balanced Fund 8 8 9 19JM Basic Fund 1 14 - 16Kotak Tech 20 24 - 2Kotak MNC 18 15 16 11LIC - MF Growth Fund - 17 - 22Reliance Retail Plan Fund 3 7 3 20 It concusses, that Reliance Equity fund is performing well, and Escortmutual fund is doing good in case of debt funds is performing well in hybridfunds. In short term funds, LIC mutual funds performance is good.
  24. 24. 24 CHAPTER IV DATA ANALYSIS AND INTERPRETATION Table 4.1 Escorts Growth Plan 2008 2009 2010 Month Return Index Return Index Return Index Jan 2.654 3.645 1.615 4.986 12.003 3.187 Feb 2.624 0.637269 3.212 2.078 8.251 2.290 Mar 5.967 7.78365 6.712 3.636 7.997 2.355 Apr 2.476 3.91725 0.984 0.386 5.707 7.890 May 6.078 9.293456 12.282 16.583 10.699 8.805 Jun 7.791 11.55789 0.757 0.081 3.067 5.426 Jul 4.644 5.869298 7.607 5.973 10.888 5.262 Aug 10.761 13.31084 3.626 0.128 6.665 2.756 Sep 3.140 3.696144 5.150 6.963 3.895 7.624 Oct 15.648 9.291876 0.870 0.390 10.739 10.198 Nov 1.329 1.621901 6.262 9.221 7.754 12.835 Dec 9.519 14.45042 10.559 7.039 7.382 4.974 S.D 6.22 6.33 6.23 Beta 0.772 0.842 0.401 Sharpe 5.26 0.01 0.34 Treynor 7.64 0.05 5.62 Jensen 0.36 3.75 5.72Correlatio n 0.91 0.93 0.08
  25. 25. 25INTERPRETATION In Sharpe method, the Escorts Growth plan 2008 Portfolio hashigher return than other portfolio. That means the company performs betterfund in the year 2008. In Treynor’s method, the Portfolio of 2008 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2010 has higher return thanother portfolio. It is known from the correlation that the relationship between theEscorts Growth plan stock return and stock market index return is high in2009.
  26. 26. 26 Table 4.2 Escorts Income Bond 2008 2009 2010 Month Return Index Return Index Return Index Jan 0.054 1.368 2.584 1.165 2.039 0.232 Feb 0.843 0.361 0.370 0.003 0.462 0.375 Mar 3.040 0.198 0.445 0.507 1.401 0.363 Apr 1.699 0.856 1.030 0.164 2.427 0.372 May 2.594 1.304 1.419 0.068 4.369 0.361 Jun 5.574 0.744 1.205 0.701 0.779 0.418 Jul 0.091 0.274 0.066 1.423 2.977 0.728 Aug 2.508 1.394 1.402 0.697 1.555 0.960 Sep 0.704 1.775 3.221 0.355 0.057 0.279 Oct 0.157 0.134 1.404 1.138 3.226 0.444 Nov 4.202 0.405 2.102 0.135 1.736 0.765 Dec 3.586 0.391 7.761 0.230 1.762 0.450 S.D 2.38 2.77 2.31 Beta 0.302 0.725 2.582Sharpe 3.39 6.41 16.21Treynor 7.17 6.28 2.16Jensen 0.32 5.01 14.95Correlation 0.08 0.19 0.40
  27. 27. 27INTERPRETATION In Sharpe method, the Escorts Income Bond 2010 Portfolio hashigher return than other portfolio. That means the company performs betterfund in the year 2010. In Treynor’s method, the Portfolio of 2008 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2010 has higher return thanother portfolio. It is known from the correlation that the relationship between thestock return and stock market index return is high in 2010.
  28. 28. 28 Table 4.3 Escorts Income Plan 2008 2009 2010 Month Return Index Return Index Return Index Jan 0.803 5.299 0.228 5.360 0.391 2.714 Feb 0.464 0.768 0.666 1.769 0.566 2.107 Mar 1.205 7.617 0.865 4.361 0.400 2.339 Apr 1.579 5.105 0.363 1.294 0.374 7.987 May 1.044 7.300 0.275 16.024 0.416 8.911 Jun 0.612 11.722 0.127 0.153 0.324 6.374 Jul 0.580 4.878 0.174 6.187 0.214 4.539 Aug 0.490 13.448 0.448 0.445 0.328 2.873 Sep 0.546 2.991 0.147 6.729 0.402 8.133 Oct 0.502 9.505 0.232 0.662 0.353 9.852 Nov 0.856 0.849 0.526 8.958 0.427 11.124 Dec 1.324 13.398 0.435 6.037 0.110 5.098 S.D 0.37 0.27 0.11 Beta 0.018 0.005 0.001Sharpe 0.83 0.86 0.88Treynor 3.47 1.44 6.90Jensen 0.94 0.37 0.36Correlation 0.36 0.12 0.05
  29. 29. 29INTERPRETATION In Sharpe method, 2010 Portfolio has higher return than otherportfolio. That means the company performs better fund in the year 2010. In Treynor’s method, the Portfolio of 2010 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2008 has higher return thanother portfolio. It is known from the correlation that the relationship between thestock return and stock market index return is high in 2008.
  30. 30. 30 Table 4.4 Escorts Tax Plan 2008 2009 2010 Month Return Index Return Index Return Index Jan 3.762 5.299 1.491 5.360 1.206 2.714 Feb 4.959 0.768 4.517 1.769 5.135 2.107 Mar 5.904 7.617 5.714 4.361 5.792 2.339 Apr 2.851 5.105 0.306 1.294 6.441 7.987 May 6.628 7.300 16.432 16.024 6.963 8.911 Jun 8.696 11.722 1.583 0.153 4.078 6.374 Jul 5.421 4.878 6.676 6.187 7.712 4.539 Aug 12.412 13.448 2.581 0.445 5.382 2.873 Sep 2.413 2.991 3.226 6.729 9.789 8.133 Oct 15.191 9.505 0.003 0.662 9.193 9.852 Nov 1.357 0.849 5.595 8.958 7.888 11.124 Dec 15.060 13.398 8.143 6.037 4.595 5.098 S.D 7.10 6.61 6.57 Beta 0.907 0.908 0.803Sharpe 5.35 0.45 2.41Treynor 4.90 3.21 1.12Jensen 0.39 4.62 2.81Correlation 0.95 0.94 0.81INTERPRETATION In Sharpe method, 2008 Portfolio has higher return than otherportfolio. That means the company performs better fund in the year 2008.
  31. 31. 31 In Treynor’s method, the Portfolio of 2008 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2009 has higher return thanother portfolio. It is known from the correlation that the relationship between thestock return and stock market index return is high in 2008.
  32. 32. 32 Table 4.5 Escort Balanced Fund 2008 2009 2010 Month Return Index Return Index Return Index Jan 1.7970 8.452 4.370 4.078 4.400 2.962 Feb 3.1779 2.164 0.618 5.298 0.630 5.863 Mar 4.6906 5.747 6.015 0.835 6.004 5.221 Apr 1.2131 2.214 0.519 4.073 0.506 4.998 May 4.3139 8.495 11.183 0.488 11.274 1.886 Jun 5.9484 3.237 0.758 3.418 0.681 2.893 Jul 4.0678 6.972 5.820 0.615 5.829 4.094 Aug 11.1112 4.914 3.787 9.794 3.690 5.674 Sep 3.9788 2.368 7.027 0.602 6.951 4.945 Oct 11.5740 4.665 6.503 2.153 6.891 1.206 Nov 0.3638 1.396 5.650 3.488 5.547 1.583 Dec 12.4841 3.523 4.569 3.235 5.050 0.425 S.D 5.56 5.83 5.90 Beta 0.639 0.181 0.134Sharpe 4.95 1.60 1.06Treynor 33.19 35.74 28.57Jensen 7.83 0.94 0.96Correlation 0.51 0.13 0.09INTERPRETATION
  33. 33. 33 In Sharpe method, 2008 Portfolio has higher return than otherportfolio. That means the company performs better fund in the year 2008. In Treynor’s method, the Portfolio of 2009 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2008 has higher return thanother portfolio. It is known from the correlation that the relationship between thestock return and stock market index return is high in 2008.
  34. 34. 34 Table 4.6 GIC Growth Plus II 2008 2009 2010 Month Return Index Return Index Return Index Jan 3.083 3.609 7.934 6.600 7.754 3.624 Feb 0.889 0.680 2.785 2.796 3.846 2.952 Mar 2.857 7.917 3.027 1.799 0.308 2.155 Apr 1.715 1.274 4.771 1.096 4.719 6.462 May 3.959 14.863 8.956 17.108 7.888 8.235 Jun 8.238 10.303 2.961 0.032 10.253 3.685 Jul 7.394 4.983 0.917 7.027 1.096 6.016 Aug 7.742 16.419 4.495 1.695 2.783 4.253 Sep 0.148 1.489 3.050 6.877 3.032 6.083 Oct 5.048 6.653 1.576 0.250 1.735 10.074 Nov 2.282 3.428 5.739 9.440 5.609 10.625 Dec 10.740 16.617 7.265 8.814 6.851 4.991 S.D 4.67 5.26 5.53 Beta 0.512 0.590 0.186Sharpe 3.48 0.22 0.03Treynor 52.18 2.62 1.09Jensen 0.21 2.76 0.43Correlation 0.88 0.83 0.21
  35. 35. 35INTERPRETATION In Sharpe method, 2008 Portfolio has higher return than otherportfolio. That means the company performs better fund in the year 2008. In Treynor’s method, the Portfolio of 2008 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2009 has higher return thanother portfolio. It is known from the correlation that the relationship between thestock return and stock market index return is high in 2008.
  36. 36. 36 Table 4.7 GIC DMAT 2008 2009 2010 Month Return Index Return Index Return Index Jan 2.284 3.645 1.179 4.986 0.181 3.187 Feb 0.774 0.637 2.058 2.078 2.110 2.290 Mar 3.585 7.784 2.536 3.636 6.184 2.355 Apr 0.265 3.917 0.483 0.386 3.761 7.890 May 6.842 9.293 11.983 16.583 8.612 8.805 Jun 8.712 11.558 2.596 0.081 4.666 5.426 Jul 6.208 5.869 2.115 5.973 9.572 5.262 Aug 10.267 13.311 1.698 0.128 2.618 2.756 Sep 1.332 3.696 5.034 6.963 10.151 7.624 Oct 15.543 9.292 2.609 0.390 2.499 10.198 Nov 1.031 1.622 7.543 9.221 2.521 12.835 Dec 11.695 14.450 9.007 7.039 2.510 4.974 S.D 6.16 5.52 5.56 Beta 0.753 0.690 0.428Sharpe 5.18 0.21 0.93Treynor 48.06 1.99 14.25Jensen 0.11 3.41 0.86Correlation 0.89 0.87 0.53
  37. 37. 37INTERPRETATION In Sharpe method, 2008 Portfolio has higher return than otherportfolio. That means the company performs better fund in the year 2008. In Treynor’s method, the Portfolio of 2008 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2009 has higher return thanother portfolio. It is known from the correlation that the relationship between thestock return and stock market index return is high in 2008.
  38. 38. 38 Table 4.8 GIC Fortune 94 2008 2009 2010 Month Return Index Return Index Return Index Jan 2.384 0.465 8.144 1.030 2.803 0.340 Feb 0.142 0.459 0.357 0.056 5.689 0.408 Mar 6.553 0.288 0.554 0.098 1.681 0.442 Apr 1.064 0.646 0.334 0.299 2.105 0.440 May 14.941 0.817 15.275 0.302 8.621 0.297 Jun 10.831 0.728 4.341 0.266 1.385 0.297 Jul 5.011 0.328 0.749 0.210 6.337 0.748 Aug 11.966 0.699 1.706 0.352 4.193 0.918 Sep 1.692 1.720 5.716 0.241 5.209 0.283 Oct 8.303 0.474 0.341 0.621 0.680 0.575 Nov 7.635 0.190 12.349 0.209 0.401 0.367 Dec 17.408 0.255 7.310 0.359 0.683 0.375 S.D 7.30 7.09 3.99 Beta 0.348 1.904 0.179Sharpe 6.00 3.12 18.20Treynor 6.76 0.50 28.03Jensen 7.87 10.39 2.75Correlation 0.02 0.09 0.01
  39. 39. 39INTERPRETATION In Sharpe method, 2010 Portfolio has higher return than otherportfolio. That means the company performs better fund in the year 2010. In Treynor’s method, the Portfolio of 2010 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2009 has higher return thanother portfolio. It is known from the correlation that the relationship between thestock return and stock market index return is high in 2009.
  40. 40. 40 Table 4.9 LIC MF Equity Fund 2008 2009 2010 Month Return Index Return Index Return Index Jan 1.210 5.299 4.011 5.360 2.219 2.714 Feb 2.853 0.768 6.131 1.769 5.212 2.107 Mar 4.515 7.617 3.590 4.361 0.431 2.339 Apr 0.138 5.105 1.590 1.294 2.278 7.987 May 8.642 7.300 14.867 16.024 7.738 8.911 Jun 8.657 11.722 0.154 0.153 5.173 6.374 Jul 7.471 4.878 5.387 6.187 3.419 4.539 Aug 14.590 13.448 3.024 0.445 9.789 2.873 Sep 2.857 2.991 5.000 6.729 3.393 8.133 Oct 11.459 9.505 0.455 0.662 9.727 9.852 Nov 4.180 0.849 5.416 8.958 10.068 11.124 Dec 13.379 13.398 8.815 6.037 3.930 5.098 S.D 5.98 6.36 5.70 Beta 0.781 0.881 0.747Sharpe 4.70 0.40 2.35Treynor 42.68 2.95 19.97Jensen 1.09 4.08 1.58Correlation 0.97 0.94 0.87INTERPRETATION In Sharpe method, 2008 Portfolio has higher return than otherportfolio. That means the company performs better fund in the year 2008.
  41. 41. 41 In Treynor’s method, the Portfolio of 2008 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2009 has higher return thanother portfolio. It is known from the correlation that the relationship between thestock return and stock market index return is high in 2008.
  42. 42. 42 Table 4.10 LIC MF Bond Fund 2008 2009 2010 Month Return Index Return Index Return Index Jan 0.995 1.368 0.211 1.165 2.262 0.232 Feb 0.737 0.361 0.075 0.003 1.530 0.375 Mar 0.723 0.198 1.306 0.507 1.577 0.363 Apr 1.742 0.856 0.255 0.164 3.512 0.372 May 1.382 1.304 0.598 0.068 0.055 0.361 Jun 0.358 0.744 1.143 0.701 4.548 0.418 Jul 0.430 0.274 0.191 1.423 0.397 0.728 Aug 1.247 1.394 0.131 0.697 1.698 0.960 Sep 0.774 1.775 0.191 0.355 0.223 0.279 Oct 0.238 0.134 0.376 1.138 0.338 0.444 Nov 0.218 0.405 0.398 0.135 5.121 0.765 Dec 1.183 0.391 0.210 0.230 0.211 0.450 S.D 0.84 0.60 2.54 Beta 0.234 0.052 2.768Sharpe 5.68 8.26 16.74Treynor 12.52 13.47 2.08Jensen 0.87 0.30 1.67Correlation 0.19 0.06 0.39
  43. 43. 43INTERPRETATION In Sharpe method, 2010 Portfolio has higher return than otherportfolio. That means the company performs better fund in the year 2010. In Treynor’s method, the Portfolio of 2009 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2010 has higher return thanother portfolio. It is known from the correlation that the relationship between thestock return and stock market index return is high in 2010.
  44. 44. 44 Table 4.11 LIC MF Govt. Securities Fund 2008 2009 2010 Month Return Index Return Index Return Index Jan 1.552 0.864 0.324 0.524 0.984 0.244 Feb 0.019 0.022 0.384 0.343 0.883 0.316 Mar 1.474 0.284 1.300 0.018 0.311 0.298 Apr 1.874 0.674 0.307 0.314 1.216 0.441 May 1.888 0.688 0.813 0.094 1.117 0.425 Jun 0.826 0.555 0.738 0.120 0.563 0.468 Jul 1.033 0.219 0.025 0.279 0.538 0.421 Aug 2.050 0.574 0.253 0.060 0.321 0.464 Sep 1.073 0.723 0.237 0.391 0.354 0.313 Oct 0.006 0.288 1.954 0.807 0.538 0.444 Nov 0.806 0.433 0.481 0.060 0.669 0.478 Dec 2.054 0.143 1.077 0.054 0.563 0.438 S.D 1.34 0.87 0.59 Beta 0.307 1.739 0.855Sharpe 14.71 34.96 46.07Treynor 12.38 5.65 10.27Jensen 1.24 10.11 5.52Correlation 0.06 0.59 0.29
  45. 45. 45INTERPRETATION In Sharpe method, 2010 Portfolio has higher return than otherportfolio. That means the company performs better fund in the year 2010. In Treynor’s method, the Portfolio of 2008 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2009 has higher return thanother portfolio. It is known from the correlation that the relationship between thestock return and stock market index return is high in 2009.
  46. 46. 46 Table 4.12 LIC MF Growth Fund 2008 2009 2010 Month Return Index Return Index Return Index Jan 4.071 0.864 1.386 0.524 2.716 0.244 Feb 1.107 0.022 3.382 0.343 1.761 0.316 Mar 4.509 0.284 0.080 0.018 3.633 0.298 Apr 3.579 0.674 3.143 0.314 5.468 0.441 May 13.099 0.688 15.491 0.094 3.980 0.425 Jun 7.974 0.555 0.447 0.120 0.419 0.468 Jul 12.389 0.219 3.957 0.279 9.916 0.421 Aug 15.199 0.574 1.090 0.060 5.542 0.464 Sep 4.611 0.723 4.998 0.391 2.834 0.313 Oct 11.827 0.288 1.394 0.807 9.906 0.444 Nov 0.715 0.433 7.651 0.060 8.627 0.478 Dec 11.447 0.143 7.678 0.054 5.672 0.438 S.D 7.02 5.99 5.93 Beta 1.183 0.496 7.805Sharpe 22.64 11.65 13.44Treynor 4.95 6.60 3.33Jensen 12.92 1.36 14.71Correlation 0.05 0.02 0.26
  47. 47. 47INTERPRETATION In Sharpe method, 2008 Portfolio has higher return than otherportfolio. That means the company performs better fund in the year 2008. In Treynor’s method, the Portfolio of 2009 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2010 has higher return thanother portfolio. It is known from the correlation that the relationship between thestock return and stock market index return is high in 2010.
  48. 48. 48 Table 4.13 ING Financial 2008 2009 2010 Month Return Index Return Index Return Index Jan 7.642 0.936 6.660 2.129 2.242 0.555 Feb 0.963 0.004 7.621 1.016 2.750 0.773 Mar 7.854 0.412 5.000 0.345 1.581 0.683 Apr 12.254 0.722 2.279 0.297 2.778 0.328 May 1.365 1.822 15.085 0.385 11.111 0.278 Jun 11.960 0.970 1.095 1.072 2.215 0.554 Jul 2.530 0.634 4.272 1.815 9.406 1.270 Aug 7.407 1.409 3.145 0.356 6.220 1.530 Sep 4.948 2.004 5.966 0.475 1.145 1.553 Oct 9.789 2.269 0.662 1.335 7.203 0.779 Nov 2.305 1.043 9.201 0.109 8.422 1.094 Dec 10.972 1.237 12.340 0.216 7.834 0.635 S.D 7.87 7.61 5.72 Beta 0.471 1.500 1.724Sharpe 0.18 2.40 10.89Treynor 0.40 1.63 4.63Jensen 0.90 10.34 7.24Correlation 0.07 0.21 0.23
  49. 49. 49INTERPRETATION In Sharpe method, 2010 Portfolio has higher return than otherportfolio. That means the company performs better fund in the year 2010. In Treynor’s method, the Portfolio of 2010 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2009 has higher return thanother portfolio. It is known from the correlation that the relationship between thestock return and stock market index return is high in 2010.
  50. 50. 50 Table 4.14 Kotak Gilt 2008 2009 2010 Month Return Index Return Index Return Index Jan 0.261 1.498 0.242 5.138 0.194 0.679 Feb 0.422 0.588 0.278 1.451 1.545 0.709 Mar 0.528 0.594 0.370 2.699 0.321 0.907 Apr 0.731 1.082 0.183 0.044 0.191 0.439 May 0.392 2.815 0.190 0.112 0.190 0.355 Jun 0.309 1.164 1.940 1.703 1.879 0.035 Jul 0.416 0.954 1.641 3.652 1.645 1.879 Aug 0.506 2.044 0.191 1.515 0.192 3.481 Sep 0.368 3.066 0.191 1.515 0.190 3.376 Oct 0.238 0.728 0.194 1.812 0.194 0.801 Nov 0.244 2.055 0.197 0.069 0.194 2.140 Dec 0.234 0.973 0.191 0.235 0.379 0.490 S.D 0.15 0.62 0.84 Beta 0.034 0.121 0.016 Sharpe 3.49 2.19 3.53 Treynor 15.23 9.54 5.68 Jensen 0.18 1.20 0.24Correlation 0.36 0.45 0.03
  51. 51. 51INTERPRETATION In Sharpe method, 2010 Portfolio has higher return than otherportfolio. That means the company performs better fund in the year 2010. In Treynor’s method, the Portfolio of 2008 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2009 has higher return thanother portfolio. It is known from the correlation that the relationship between thestock return and stock market index return is high in 2009.
  52. 52. 52 Table 4.15 Kotak Opportunities 2008 2009 2010 Month Return Index Return Index Return Index Jan 1.078 3.609 1.270 6.600 0.511 3.624 Feb 0.817 0.680 2.113 2.796 3.189 2.952 Mar 2.228 7.917 1.598 1.799 4.592 2.155 Apr 0.670 1.274 0.308 1.096 2.978 6.462 May 4.623 14.863 7.579 17.108 2.625 8.235 Jun 3.993 10.303 0.815 0.032 0.759 3.685 Jul 2.682 4.983 2.934 7.027 2.260 6.016 Aug 3.993 16.419 1.080 1.695 2.196 4.253 Sep 1.885 1.489 1.854 6.877 3.571 6.083 Oct 6.038 6.653 0.596 0.250 6.358 10.074 Nov 0.051 3.428 3.361 9.440 3.148 10.625 Dec 9.683 16.617 5.017 8.814 3.051 4.991 S.D 3.40 3.21 3.40 Beta 0.368 0.418 0.486Sharpe 2.31 0.09 0.93Treynor 18.11 1.45 11.42Jensen 0.31 1.93 2.34Correlation 0.87 0.96 0.90INTERPRETATION
  53. 53. 53 In Sharpe method, 2010 Portfolio has higher return than otherportfolio. That means the company performs better fund in the year 2008. In Treynor’s method, the Portfolio of 2008 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2008 has higher return thanother portfolio. It is known from the correlation that the relationship between thestock return and stock market index return is high in 2009.
  54. 54. 54 Table 4.16 Kotak Bond Fund 2008 2009 2010 Month Return Index Return Index Return Index Jan 0.939 1.368 0.231 1.165 0.386 0.232 Feb 0.312 0.361 0.027 0.003 0.550 0.375 Mar 0.464 0.198 1.258 0.507 0.288 0.363 Apr 1.736 0.856 0.133 0.164 0.189 0.372 May 1.460 1.304 0.729 0.068 0.916 0.361 Jun 0.380 0.744 1.124 0.701 0.440 0.418 Jul 0.754 0.274 0.344 1.423 0.635 0.728 Aug 1.584 1.394 0.079 0.697 0.292 0.960 Sep 0.965 1.775 0.234 0.355 0.317 0.279 Oct 0.295 0.134 0.162 1.138 0.389 0.444 Nov 0.512 0.405 0.050 0.135 0.384 0.765 Dec 1.382 0.391 1.030 0.230 0.308 0.450 S.D 0.92 0.65 0.31 Beta 0.509 0.009 0.381Sharpe 2.42 8.30 11.32Treynor 3.05 19.19 10.22Jensen 2.48 0.04 1.89Correlation 0.37 0.01 0.45INTERPRETATION In Sharpe method, 2010 Portfolio has higher return than otherportfolio. That means the company performs better fund in the year 2010.
  55. 55. 55 In Treynor’s method, the Portfolio of 2009 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2008 has higher return thanother portfolio. It is known from the correlation that the relationship between thestock return and stock market index return is high in 2010.
  56. 56. 56 Table 4.17 Kotak Tech 2008 2009 2010 Month Return Index Return Index Return Index Jan 9.393 0.465 8.995 1.030 2.099 0.340 Feb 1.079 0.459 0.504 0.056 4.502 0.408 Mar 8.729 0.288 7.499 0.098 1.809 0.442 Apr 14.926 0.646 2.249 0.299 12.888 0.440 May 1.853 0.817 0.585 0.302 14.537 0.297 Jun 11.157 0.728 2.115 0.266 5.168 0.297 Jul 4.774 0.328 6.637 0.210 1.509 0.748 Aug 7.270 0.699 4.740 0.352 6.403 0.918 Sep 17.595 1.720 4.768 0.241 2.783 0.283 Oct 1.523 0.474 5.090 0.621 5.941 0.575 Nov 5.933 0.190 8.946 0.209 7.713 0.367 Dec 6.553 0.255 0.576 0.359 9.229 0.375 S.D 9.31 5.37 7.32 Beta 10.282 4.014 3.539Sharpe 9.07 5.95 7.26Treynor 6.06 4.26 5.48Jensen 59.20 25.17 23.39Correlation 0.45 0.24 0.14INTERPRETATION In Sharpe method, 2008 Portfolio has higher return than otherportfolio. That means the company performs better fund in the year 2008.
  57. 57. 57 In Treynor’s method, the Portfolio of 2008 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2008 has higher return thanother portfolio.It is known from the correlation that the relationship between the stockreturn and stock market index return is high in 2008.
  58. 58. 58 Table 4.18 Kotak MNC 2008 2009 2010 Month Return Index Return Index Return Index Jan 2.729 3.609 9.812 6.600 0.739 3.624 Feb 0.471 0.680 4.875 2.796 19.191 2.952 Mar 7.951 7.917 1.556 1.799 0.745 2.155 Apr 5.388 1.274 4.179 1.096 3.413 6.462 May 13.788 14.863 10.335 17.108 8.640 8.235 Jun 4.853 10.303 4.037 0.032 1.717 3.685 Jul 7.394 4.983 3.862 7.027 6.025 6.016 Aug 8.780 16.419 6.923 1.695 8.649 4.253 Sep 4.943 1.489 8.460 6.877 0.446 6.083 Oct 5.718 6.653 0.398 0.250 6.832 10.074 Nov 7.770 3.428 6.983 9.440 10.886 10.625 Dec 18.635 16.617 8.152 8.814 6.365 4.991 S.D 7.67 6.44 8.30 Beta 0.814 0.781 0.576Sharpe 5.93 0.73 1.38Treynor 55.91 6.64 14.29Jensen 0.12 2.44 2.21Correlation 0.85 0.90 0.43
  59. 59. 59INTERPRETATION In Sharpe method, 2008 Portfolio has higher return than otherportfolio. That means the company performs better fund in the year 2008. In Treynor’s method, the Portfolio of 2009 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2008 has higher return thanother portfolio. It is known from the correlation that the relationship between thestock return and stock market index return is high in 2009.
  60. 60. 60 Table 4.19 JM Equity Fund 2008 2009 2010 Month Return Index Return Index Return Index Jan 1.210 5.299 4.011 5.360 2.219 2.714 Feb 2.853 0.768 6.131 1.769 5.212 2.107 Mar 4.515 7.617 3.590 4.361 0.431 2.339 Apr 0.138 5.105 3.446 1.294 2.278 7.987 May 8.642 7.300 14.867 16.024 7.738 8.911 Jun 8.657 11.722 0.154 -0.153 5.173 6.374 Jul 7.471 4.878 5.387 6.187 3.419 4.539 Aug 14.590 13.448 3.024 0.445 9.789 2.873 Sep 2.857 2.991 5.000 6.729 3.393 8.133 Oct 11.459 9.505 0.455 0.662 9.727 9.852 Nov 4.180 0.849 5.416 8.958 10.068 11.124 Dec 13.379 13.398 8.815 6.037 3.930 5.098 S.D 5.98 6.40 5.70 Beta 0.781 0.875 0.747Sharpe 4.70 0.38 2.35Treynor 42.68 2.81 19.97Jensen 1.09 3.89 1.58Correlation 0.97 0.93 0.87
  61. 61. 61INTERPRETATION In Sharpe method, 2008 Portfolio has higher return than otherportfolio. That means the company performs better fund in the year 2008. In Treynor’s method, the Portfolio of 2008 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2009 has higher return thanother portfolio. It is known from the correlation that the relationship between thestock return and stock market index return is high in 2008.
  62. 62. 62 Table 4.20 JM Balanced Fund 2008 2009 2010 Month Return Index Return Index Return Index Jan 2.226 8.452 3.519 4.078 2.306 2.962 Feb 1.105 2.164 3.170 5.298 2.431 5.863 Mar 3.961 5.747 1.301 0.835 1.760 5.221 Apr 0.631 2.214 0.345 4.073 2.754 4.998 May 6.946 8.495 10.193 0.488 3.777 1.886 Jun 5.377 3.237 0.484 3.418 1.665 2.893 Jul 5.824 6.972 3.920 0.615 3.481 4.094 Aug 5.071 4.914 1.382 9.794 5.480 5.674 Sep 34.058 2.368 3.258 0.602 3.269 4.945 Oct 6.063 4.665 0.173 2.153 6.977 1.206 Nov 2.468 1.396 4.041 3.488 8.402 1.583 Dec 21.589 3.523 5.998 3.235 3.119 0.425 S.D 12.65 4.31 4.20 Beta 1.426 0.083 0.238Sharpe 8.15 1.36 0.13Treynor 24.48 66.43 1.99Jensen 10.79 1.08 0.08Correlation 0.50 0.08 0.21INTERPRETATION In Sharpe method, 2008 Portfolio has higher return than otherportfolio. That means the company performs better fund in the year 2008.
  63. 63. 63 In Treynor’s method, the Portfolio of 2009 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2008 has higher return thanother portfolio. It is known from the correlation that the relationship between thestock return and stock market index return is high in 2008.
  64. 64. 64 Table 4.21 JM Basic Fund 2008 2009 2010 Month Return Index Return Index Return Index Jan 3.941 3.645 17.542 4.986 7.759 3.187 Feb 4.936 0.637 2.941 2.078 1.382 2.290 Mar 30.000 7.784 6.255 3.636 4.541 2.355 Apr 1.472 3.917 1.408 0.386 4.631 7.890 May 13.281 9.293 19.508 16.583 3.603 8.805 Jun 8.236 11.558 1.762 -0.081 0.749 5.426 Jul 4.889 5.869 8.082 5.973 0.472 5.262 Aug 17.305 13.311 2.075 0.128 4.757 2.756 Sep 6.038 3.696 3.946 6.963 7.143 7.624 Oct 0.736 9.292 2.000 0.390 9.136 10.198 Nov 15.195 1.622 3.114 9.221 12.156 12.835 Dec 7.205 14.450 3.584 7.039 2.893 4.974 S.D 12.90 8.40 6.24 Beta 1.351 0.982 0.817Sharpe 8.77 0.44 2.17Treynor 45.38 2.98 17.48Jensen 8.11 8.32 4.36Correlation 0.76 0.81 0.90INTERPRETATION
  65. 65. 65 In Sharpe method, 2008 Portfolio has higher return than otherportfolio. That means the company performs better fund in the year 2008. In Treynor’s method, the Portfolio of 2008 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2009 has higher return thanother portfolio. It is known from the correlation that the relationship between thestock return and stock market index return is high in 2010.
  66. 66. 66 Table 4.22 Taurus Star Share 2008 2009 2010 Month Return Index Return Index Return Index Jan 3.934 3.645 10.184 4.986 5.172 3.187 Feb 0.333 0.637 6.648 2.078 13.901 2.290 Mar 10.265 7.784 7.082 3.636 2.683 2.355 Apr 4.936 3.917 3.153 0.386 4.569 7.890 May 12.132 9.293 5.487 16.583 10.268 8.805 Jun 14.352 11.558 6.290 0.081 3.073 5.426 Jul 2.838 5.869 9.357 5.973 12.000 5.262 Aug 17.318 13.311 14.184 0.128 16.955 2.756 Sep 0.657 3.696 6.376 6.963 0.039 7.624 Oct 9.189 9.292 0.216 0.390 12.187 10.198 Nov 10.572 1.622 6.938 9.221 14.493 12.835 Dec 10.445 14.450 16.040 7.039 7.227 4.974 S.D 8.22 8.62 9.63 Beta 0.938 0.830 0.995Sharpe 6.64 0.23 3.35Treynor 49.47 1.89 22.15Jensen 0.01 2.08 1.96Correlation 0.83 0.67 0.71
  67. 67. 67INTERPRETATION In Sharpe method, 2008 Portfolio has higher return than otherportfolio. That means the company performs better fund in the year 2008. In Treynor’s method, the Portfolio of 2008 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2009 has higher return thanother portfolio. It is known from the correlation that the relationship between thestock return and stock market index return is high in 2008.
  68. 68. 68 Table 4.23 Reliance Retail Plan Fund 2008 2009 2010 Month Return Index Return Index Return Index Jan 1.294 5.299 0.298 5.360 0.556 2.714 Feb 0.441 0.768 0.044 1.769 0.787 2.107 Mar 0.982 7.617 1.506 4.361 0.502 2.339 Apr 1.682 5.105 0.512 1.294 0.271 7.987 May 1.378 7.300 0.700 16.024 0.860 8.911 Jun 0.437 11.722 1.353 0.153 0.626 6.374 Jul 0.840 4.878 0.313 6.187 0.488 4.539 Aug 1.559 13.448 0.573 0.445 0.246 2.873 Sep 1.097 2.991 0.474 6.729 0.302 8.133 Oct 0.342 9.505 0.282 0.662 0.231 9.852 Nov 0.471 0.849 0.367 8.958 0.354 11.124 Dec 1.610 13.398 0.692 6.037 0.189 5.098 S.D 1.02 0.75 0.22 Beta 0.080 0.027 0.010Sharpe 0.27 0.88 0.82Treynor 24.40 13.45 54.11Jensen 0.08 0.06 0.39Correlation 0.58 0.24 0.28INTERPRETATION
  69. 69. 69 In Sharpe method, 2009 Portfolio has higher return than otherportfolio. That means the company performs better fund in the year 2009. In Treynor’s method, the Portfolio of 2010 has higher return thanother portfolio. In Jensen’s method, the Portfolio of 2010 has higher return thanother portfolio. It is known from the correlation that the relationship between thestock return and stock market index return is high in 2008. CHAPTER V FINDINGS, SUGGESTIONS AND CONCLUSION
  70. 70. 705.1 FINDINGS1. The ability of the portfolio manager to minimize the amount of insurable risk.2. Incase of Security fund LIC MF govt. security fund showed increase in performance based on both sharpe ratio under the period of analysis.3. Incase of mutual plan Reliance retail plan showed increase in performance based on both treynor ratio under the period of analysis.4. Investors treat their holdings like rented goods.5. Most of the investors ignore the long – term periods.6. Economic moat prevents competitors from stealing market share.7. Bond / income fund is to provide a steady cashflow to investors.
  71. 71. 715.2 SUGGESTIONS 1. Investors should know about the basic elements of mutual fund. 2. Investors should choose their risk level and according to that they have to choose the funds. 3. Investors should analyze the company performance and then invest the funds. 4. Investors should know the market trends. 5. Investors should wait for the long - term returns. 6. Effects of differential degrees of risk on the return of the portfolios must be taken into account.
  72. 72. 725.3 CONCLUSION It can be easily concluded that most of the fund returns can beattributed to the market that were in direct correlation with the market. Butin the sample of 23 funds considered for this study one fund; it perform asthe market and for this fund the return generated can be attributed to themarket Mutual funds are funds that pool the money of several investors toinvest in equity or debt markets. Mutual Funds could be Equity funds, Debtfunds or balanced funds. Funds are selected on quantitative parameters likederivatives, risk adjusted returns, and market analysis of fund performanceand investment styles through regular interactions due diligence processeswith fund managers.

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