DOC

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UTI ASSETS MANAGEMENT COMPANY LTD.

A
Summer Internship Project Report on

“Analysis of Mutual Fund Inddustry”

Under Guidance of: Submitted by:

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ACKNOWLEDMENT

It is a great sense of satisfaction and a matter of privilege to me to work with UTI
Mutual Fund, Bhopal. I wish to express my heartiest thanks to
………………………………………………. for providing me the opportunity to do
this project in the esteemed organization.

It is my pleasure to thank …………………………………………... to whom I owe a
lot for giving me time to do my project in this organization.

The project would not be a success without the constant and valuable guidance of
……………………, my project guide, who is rendering all sorts of help as and when
required.

Thank you

……………………

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CH. NO. CONTENT PG. NO.

1. Research Methodology:

1.1 Objective 5.

1.2 Methodology 5.

2. Industry Value Chain And Structure:

2.1 Industry Overcome 8.

2.2 Industry Value Chain 15.

2.3 Organized v/s Unorganized 16.

3. Market Size And Growth 17.

4. Industry Segment 21.

5. Competition:

5.1 Herfindahl Index 26.

5.2 Michael Portal Analysis 29.

6. Growth Drivers of Industry 30.

7. Issues and Concern 32.

8. Case Study 34.

9. Performance Sheet 64.

10. Findings and Recommendations 68.

11. References 70.

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CHAPTER 1
RESEARCH METHODOLOGY

1.1) OBJECTIVES:

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Objective of this study is to analyze the Past Performance of the various Mutual
Funds Schemes on the Basis of there Historical NAV‘s and application of statistical
tools on the same. This helps in understanding the performance of mutual fund
schemes in terms of risk adjusted Return.

1.2 METHODOLOGY:

A Sample of 30 Schemes from Top 15 Fund Houses has being taken.

Analysis has been done by using following Statistical tools:

Sharpe Ratio: It indicates the Risk-Return Performance of Portfolio. It uses
Standard deviation as the measurement of Volatility.
Treynor Ratio: It is a risk-adjusted measure of return based on systematic
risk. It uses Beta as the measurement of Volatility.
Risk free rate has been assumed as 6% pa.

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CHAPTER 2
INDUSTRY VALUE CHAIN AND STRUCTURE

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2.1 Industry Overcome:

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.

2.1(a) Global Mutual Fund Industry:

Over the past few decades, the mutual fund industry, both in the U.S. and elsewhere,
has exploded. While the global fund industry has flourished, academic studies of
mutual funds have remained geographically narrow. Almost all of the research has
focused on the U.S., with the exception of a few insightful studies of national fund
markets. Even those who study the fund industry are generally unaware that U.S.-
domiciled funds accounted for only 15% of the number of funds available globally and
60% of the world‘s fund assets in 2000 (see Investment Company Institute
(2001)).The second-largest fund industry (measured by fund assets) is Luxembourg,
with 6.5% of world mutual fund assets—part of the large and growing so-called
―offshore‖ market, or that France and Korea offer the second-largest number of mutual
funds available worldwide (13% of the world total for each country).

The mutual fund industry is among the most successful recent financial innovations.
In 2001, mutual funds held assets worth $11.7 trillion or 17% of our estimate of the
―primary securities‖ in their national markets. There is a recognizable mutual fund
―style‖ of intermediation in most countries, characterized by a transparent investment
vehicle whose underlying assets are identifiable, with the value of the fund marked-to-

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market on a regular (usually daily) basis and reflected in the Net Asset Value of the
fund, and with new shares created or redeemed upon demand. In contrast, in a
relatively opaque financial intermediary (like a bank or insurance company),
investors‘ claims are not contractually linked to the underlying asset, marked-to-
market, or created/redeemed upon demand.

Open-end funds have been around and visible for quite a long time. The first open-end
funds were created in the early twentieth century in America and were soon thereafter
adopted in the Netherlands and the U.K. The median national fund industry in our
sample is 36 years old, but this innovation was adopted more quickly and vigorously
in some countries than in others. By 2002, in some countries, the industry was a
formidable force in the national economic landscape; in other countries, it was small
or nonexistent.

The mutual fund industry holds 17% of the nations‘ primary financial assets, on
average, with a median of 4%.fund industries in Luxembourg and Ireland hold assets
that are 484% and 82% of their country‘s domestic primary assets.

When considering supply-side factors, we study characteristics of the financial sector
that would influence the speed of adoption of mutual funds. The effect of bank
concentration, restrictions placed on banks to enter the securities business, the number
of distribution channels available for funds, the presence of an explicit deposit
insurance system for banks, and the time and cost to set up a new fund. We find that
nations that restrict banks from entering the securities business have smaller equity
fund sectors, whereas countries with a more concentrated banking industry have
smaller bond fund sectors. Nations whose barriers to entry are higher have smaller
fund industries; in particular, the costs required to set up a new fund are negatively
related to industry size.

When considering demand-side factors, we find that wealthier countries, as measured
by GDP per capita, and countries with a more educated population have larger mutual

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fund industries. These effects are particularly pronounced for the equity funds, which
may require a higher level of investor sophistication. Internet penetration is also
positively related to the size of the mutual fund sector, but it is highly correlated with
the other demand-side variables. In addition, mutual funds control more national assets
in countries in which a larger fraction of pension plans are defined contribution plans.
The age of the national fund industry is also positively related to its size and recent
growth rate. Finally, the countries whose trading costs are lower, having a more
developed fund industry, which indicates that the ability to offer liquidity at a low cost
is important for the industry‘s growth. Overall, these results suggest that mutual funds
thrive in more developed economies.

At the end of 2001, the worldwide mutual fund industry held $11.7 trillion in assets.
The countries with the largest fraction of the global industry were the U.S. (60%),
Luxembourg (6.5%), France (6.1%), Italy (3.1%), and Japan (2.9%). Countries with
tiny, but existent, fund industries include Bangladesh, Romania, and Sri Lanka. In
addition, we identify five countries with no apparent fund sector: Algeria, Burma,
Libya, United Arab Emirates, and Yugoslavia (Serbia and Montenegro). Median assets
under management (AUM) as a function of the country‘s GDP are 9% with a high of
3991% for Luxembourg, followed by Ireland with 186% and a low of 0.011% for
Bangladesh (after excluding the countries with zero mutual fund assets).When we
measure assets under management relative to the universe of primary securities, the
fund industry holds 4% of all primary securities in the median country, with
Luxembourg once again at the high end with 485%, followed by Ireland with 82%.

As of the end of 2001, the $11.7 trillion of world fund assets were held in 55,160
funds, with a Median number of 285 funds per country. The U.S., which had the
largest fund industry in terms of the share of assets held, was also the largest in terms
of the number of available mutual funds (8,307 funds at the end of 2001). France and
Korea were second and third with 7,144 and 7,117 funds, respectively. It is intriguing
to note that there were over 55,000 different ―products‖ available—a staggering
number compared to almost any other industry.

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Evolution in India

The formation of Unit Trust of India marked the evolution of the Indian mutual fund
industry in the year 1963. The primary objective at that time was to attract the small
investors and it was made possible through the collective efforts of the Government of
India and the Reserve Bank of India.

The history of mutual fund industry in India can be better understood divided into
following phases:

Phase 1. Establishment and Growth of Unit Trust of India - 1964-87
Unit Trust of India enjoyed complete monopoly when it was established in the year
1963 by an act of Parliament. UTI was set up by the Reserve Bank of India and it
continued to operate under the regulatory control of the RBI until the two were de-
linked in 1978 and the entire control was tranferred in the hands of Industrial
Development Bank of India (IDBI). UTI launched its first scheme in 1964, named as
Unit Scheme 1964 (US-64), which attracted the largest number of investors in any
single investment scheme over the years.

UTI launched more innovative schemes in 1970‘s and 80‘s to suit the needs of
different investors. It launched ULIP in 1971, six more schemes were launched
between 1981 to 1984, Children's Gift Growth Fund and India Fund (India's first
offshore fund) in 1986, Market share (India‘s first equity diversified scheme) in 1987,
and Monthly Income Schemes (offering assured returns) during 1990‘s. By the end of
1987, UTI's assets under management grew ten times to Rs 6700 crores.

Phase II. Entry of Public Sector Funds - 1987-1993
The Indian mutual fund industry witnessed a number of public sector players entering
the market in the year 1987. In November 1987, SBI Mutual Fund from the State Bank
of India became the first non-UTI mutual fund in India. SBI Mutual Fund was later
followed by Canbank Mutual Fund, LIC Mutual Fund, Indian Bank Mutual Fund,
Bank of India Mutual Fund, GIC Mutual Fund and PNB Mutual Fund. By 1993, the

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assets under management of the industry increased seven times to Rs. 47,004 crores.
However, UTI remained to be the leader with about 80% market share.

Phase III. Emergence of Private Sector Funds - 1993-96
The permission given to private sector funds including foreign fund management
companies (most of them entering through joint ventures with Indian promoters) to
enter the mutual fund industry in 1993, provided a wide range of choice to investors
and more competition in the industry. Private funds introduced innovative products,
investment techniques and investor-servicing technology. By 1994-95, about 11
private sector funds had launched their schemes.

Phase IV. Growth and SEBI Regulation - 1996-2004
The mutual fund industry witnessed robust growth and stricter regulation from the
SEBI after the year 1996. The mobilization of funds and the number of players
operating in the industry reached new heights as investors started showing more
interest in mutual funds.

Investors‘ interests were safeguarded by SEBI and the Government offered tax
benefits to the investors in order to encourage them. SEBI (Mutual Funds)
Regulations, 1996 was introduced by SEBI that set uniform standards for all mutual
funds in India. The Union Budget in 1999 exempted all dividend incomes in the hands
of investors from income tax. Various Investor Awareness Programs were launched
during this phase, both by SEBI and AMFI, with an objective to educate investors and
make them informed about the mutual fund industry.

In February 2003, the UTI Act was repealed and UTI was stripped of its Special legal
status as a trust formed by an Act of Parliament. The primary objective behind this
was to bring all mutual fund players on the same level. UTI was re-organized into two
parts: 1. The Specified Undertaking, 2. The UTI Mutual Fund

Presently Unit Trust of India operates under the name of UTI Mutual Fund and its past
schemes (like US-64, Assured Return Schemes) are being gradually wound up.
However, UTI Mutual Fund is still the largest player in the industry. In 1999, there

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was a significant growth in mobilization of funds from investors and assets under
management.

Phase V. Growth and Consolidation - 2004 Onwards
The industry has also witnessed several mergers and acquisitions recently, examples
of which are acquisition of schemes of Alliance Mutual Fund by Birla Sun Life, Sun
F&C Mutual Fund and PNB Mutual Fund by Principal Mutual Fund. Simultaneously,
more international mutual fund players have entered India like Fidelity, Franklin
Templeton Mutual Fund etc. There were 29 funds as at the end of March 2006. This is
a continuing phase of growth of the industry through consolidation and entry of new
international and private sector players.

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2.2Industry value chain:

Mutual Fund value chain divided into three parts:

a) Retailer: He is the final customer of the Fund houses; he/she invest money in
various schemes which is providing by the Relationship Manager or the
Dealers of the Fund houses which may be Banks also.
b) Fund Houses: In Fund houses the Schemes of various funds has been prepared
by the Fund Managers. Fund houses have been tied up with various Education
and Technological institute for getting Skillful manpower.
c) Stock Market: The Performance of Various funds have been depending on the
performance of the Stock market. The Stock Market has been regulated by the
SEBI, so at some extent Mutual Fund industry is also regulated by SEBI, but
main regulatory body of Mutual fund Industry is AMFI (Association of
Mutual fund industry).

Retaile
r
Relationship
Management /Promotion

Fund
Tie up with Education
Houses
& Technical institutes

Stock Market Regulated by SEBI

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2.3Organized v/s Uunorganized structure:

Organized structure in Mutual fund industry means, it is the industry which is
following all the rules and regulation made by the market regulator SEBI. Mutual
fund industry is 100 percent organized.

Unorganized structure is a structure which does not follow any rules and
regulation, they do not maintain any records and accounts, and the payment can
be done in cash. In Mutual Fund industry the commission given by the company
to its dealers /distributers are unorganized which is not informed to the Market
regulator SEBI.

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CHAPTER 3
MRKET SIZE AND GROWTH

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3.MARKET SIZE AND GROWTH

The domestic mutual fund industry (IMFI) which grew at a healthy pace of 18-19% in
the last eight years (2002-2010) against its worldwide growth rate of 13% is all set to
beat past time records and now poised for achieving 22-23% rate of growth by end of
current fiscal.

According to a Study on ‗Indian Mutual Fund Industry‘ undertaken by The Associated
Chambers of Commerce and Industry of India (ASSOCHAM), it is highlighted that
IMFI which owned assets worth around Rs.7 lace crores by the end of December
2010.

According to the ASSOCHAM Study, Asset Under Management (AUM) as
percentage of GDP in India is 4.12% as against Australia 88.22%, Germany 10.54%,
Japan 7.57%, UK 18.81%, USA 61.27%, Canada 34.33%, France 59.63%, Hong
Kong 101.085 and Brazil 19.95%.

GROWTH:

It was observed that IMFI is in fast growth phase; competition is becoming fierce with
mergers and takeovers and building of brand exercise through focused advertising,
better customer service, newer distribution channels, consistent return and newer
products offerings.

The mutual fund industry which witnessed downfall in 1991 when its declined to
Rs.4100 crore achieved significant growth in 1998 and the total industry became
worth Rs.72,000 crores and ever since this has kept increasing, revealing its efficient
growth. In fact, the months of February and March considered toughest due to large-
scale redemptions to meet tax liabilities also were active.

In March 2006, mutual funds were net buyers worth Rs.4,041.88 crores, gross
purchases being Rs.14889.15 crores and gross sales Rs.10847.27 crore making March
the most active month for the mutual fund industry in India. May of year 2005 was
considered the most active month when mutual funds were net buyers of worth
Rs.3,334.99 crore.

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It is also highlighted that in view of growing awakening and certainties prevailing in
MF industry, its market penetration would more than double by 2010 from about 4%
now as gradually mutual funds are becoming preferred savings instrument for urban
and rural folks.

Despite domestic MF growing at substantially higher rate in last 3 years, it is still
many times behind US MF industry, the size of which is estimated at over US$ 12
trillion as against about Rs.5 lakh crore of India with its market penetration of 4% of
total population, compared to 49% in the US and 20% in UK. In India, MF industry
manages nearly 700 schemes while US MF industry has more than 12,000 MF
schemes.

The public sector share in current MF industry size will go up from nearly 20% from
less than 10% now and that of joint sector to about 10% from 8% now. The emerging
trends in the MF would be that the Commodity funds will invest in commodities such
as metals, food grains, and crude oil, commodity companies, or commodity futures
contracts.

Likewise, Real estate funds will invest in real estate directly. As the competition in the
Indian MF industry will further intensify and go forward. Fund managers will,
therefore, need to deliver products that are relevant to investors. As the Indian markets
and investors mature, financial advice, product diversification, and multi-distribution
channels will become critical for long-term success.

Increasing investor awareness will help propel growth for the Indian MF industry.
Investors need to be however warned against the common fallacy of comparing
returns of debt-oriented fixed-income MFs and fixed-income products of small
savings schemes without considering the attendant risks.

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CHAPTER 4
INDUSTRY SEGMENT

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4. INDUSTRY SEGMENT:

Classification of Mutual Funds in India has been done on the basis of their investment
objective and structure. Classification of Mutual Funds in India has be done into main
types such as Income Funds, Sector- Specific Funds, Large Cap Funds, Fixed- Income
Funds, Interval Funds, Closed- End Funds, and Tax Saving Funds.

a) Income Funds in India are a kind of mutual fund whose aim is to provide to the
investors with steady and regular income. They usually invest their principal in
securities such as corporate debentures, bonds, and government securities. The debt
securities in which Fixed- Income Funds in India makes investments are also known
as commercial papers of deposit or treasury bills if the duration is less than one year
and in case the duration is more than one year then the debt securities are known as
bonds or debentures.

b) Sector- Specific Funds in India are funds that make investments in specified
sectors only. They give importance to one sector only such as pharmaceuticals,
software, infrastructure, and health care. The amount of returns that Sector- Specific
Funds in India give depends totally on the performance of the industries or sectors in
which investments have been made. Sector- Specific Funds in India give very high
returns but at the same time they are also very risky in comparison to the funds that are
diversified.

c) Large Cap Funds in India are a kind of mutual fund that makes investment in the
shares of large blue chip companies. The large cap companies in which Large Cap
Funds in India makes investments are usually companies that have a market
capitalization that is more than Rs. 1000 crores. The main advantage of Large Cap
Funds in India is that they are considered to be of low return and low risk category.
This ensures that the investments of the investors are relatively safe.

d) Fixed- Income Funds in India makes investment in debt securities that have been
issued either by the banks, government, or companies. They are also known as income
funds and debt funds. The advantage of Income Funds in India is that it provides
regular income to the investor either on a monthly or quarterly basis. Further the

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advantage of Income Funds in India is that it also provides stability of capital to the
investor.

e) Interval Funds in India are a combination of both the open and close ended funds.
They offer the investors flexibility for they can be sold and repurchased at the period
of time that has been predetermined. Interval Funds in India are usually repurchased
every six or twelve months at Net Assets Value (NAV) or as has been unveiled in the
annual report and prospectus of the fund.

f) Closed- End Funds in India are a kind of mutual fund that has a maturity period,
that has been specified and which usually varies from three to fifteen years. In Closed-
End Funds in India, the number of shares that are sold in the public offer is fixed and
after this the selling and buying of the units are possible only in the stock exchanges.

g) Tax Saving Funds in India offer tax rebates to the investor under the Section 88,
Income Tax Act. They are also known as equity- linked savings scheme.

h) Open- End Funds in India is such that the investors can sell as well as buy all
through out the year. The investors sell and buy units of Open- End Funds in India at
the related prices of Net Asset Value (NAV) each day. An investor can buy Open- End
Funds in India either from a brokerage house or through the mutual fund company.
Open- End Funds in India have no fixed date of maturity. The main advantage of
Open- End Funds in India is that it offers liquidity to the investors for they can sell the
units whenever they need the money.

i) International mutual funds are a very special type of mutual fund, wherein
investments are being made in the non-domestic securities markets across the world.
The popularity of the International mutual funds has gone up in the recent years since
it provides a high level of diversification of the portfolio. Further, the International
mutual funds also help in capitalizing on some of the world‘s best opportunities.
International mutual funds can offer its investors with high returns if chosen properly.
One of the significant features of the International mutual funds are that it accrues

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profit when some markets are rising and others are falling in the international market.
A strict vigil on the foreign currencies and world markets is needed while investing in
the International mutual funds.

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CHAPTER 5
COMPETITION

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5.1 Herfindahl Index

The Herfindahl index is a measure of the size of firms in relation to the industry and
an indicator of the amount of competition among them.

Average Assets under Management (AAUM) for the month of Mar-2011 (Rs in Lakhs)

Market
Sr. No. Mutual Fund Name Average AUM share (%) HHI
AEGON Mutual
1 Fund N/A
AIG Global
Investment Group
2 Mutual Fund 79589.78 0.113612416 0.012908
3 Axis Mutual Fund 830169.78 1.185046549 1.404335
Baroda Pioneer
4 Mutual Fund 258479.18 0.36897255 0.136141
Benchmark Mutual
5 Fund 340363.29 0.485860064 0.23606
Bharti AXA Mutual
6 Fund 28857.55 0.041193429 0.001697
Birla Sun Life
7 Mutual Fund 6369619.52 9.092472182 82.67305
BNP Paribas Mutual
8 Fund 467418.11 0.667227634 0.445193
Canara Robeco
9 Mutual Fund 782363.49 1.116804269 1.247252
10 Daiwa Mutual Fund 24390.25 0.03481647 0.001212
Deutsche Mutual
11 Fund 818660.04 1.168616684 1.365665
DSP BlackRock
12 Mutual Fund 3060071.21 4.368174938 19.08095
Edelweiss Mutual
13 Fund 18196.96 0.025975704 0.000675
Escorts Mutual
14 Fund 19685.4 0.028100415 0.00079

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Fidelity Mutual
15 Fund 907440.44 1.295348479 1.677928
Franklin Templeton
16 Mutual Fund 3788271.74 5.407662939 29.24282
Goldman Sachs
17 Mutual Fund N/A
18 HDFC Mutual Fund 8628224.46 12.31657411 151.698
19 HSBC Mutual Fund 445219.73 0.635540003 0.403911
ICICI Prudential
20 Mutual Fund 7346610.81 10.48710276 109.9793
21 IDBI Mutual Fund 352780.47 0.503585277 0.253598
22 IDFC Mutual Fund 2101865.66 3.000360537 9.002163
23 ING Mutual Fund 130132.46 0.185760824 0.034507
JM Financial
24 Mutual Fund 591783.18 0.844755654 0.713612
JPMorgan Mutual
25 Fund 340957.1 0.486707713 0.236884
Kotak Mahindra
26 Mutual Fund 3220247.1 4.596822006 21.13077
27 L&T Mutual Fund 402984.3 0.575249986 0.330913
LIC NOMURA
28 Mutual Fund 1119557.16 1.598139779 2.554051
Mirae Asset Mutual
29 Fund 37950.32 0.05417313 0.002935
Morgan Stanley
30 Mutual Fund 207609.65 0.296357571 0.087828
Motilal Oswal
31 Mutual Fund 30051.9 0.042898334 0.00184
Peerless Mutual
32 Fund 420214.03 0.599844993 0.359814
Pramerica Mutual
33 Fund 162936.5 0.232587769 0.054097
PRINCIPAL Mutual
34 Fund 524622.65 0.748885681 0.56083
Quantum Mutual
35 Fund 12359.94 0.017643504 0.000311
Reliance Mutual
36 Fund 10157660.46 14.49980566 210.2444
Religare Mutual
37 Fund 1150495.91 1.642304069 2.697163
38 Sahara Mutual Fund 17920.9 0.025581635 0.000654
39 SBI Mutual Fund 4167180.19 5.948545253 35.38519
40 Sundaram Mutual 1447858.09 2.066781127 4.271584

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Fund
41 Tata Mutual Fund 2268110.53 3.237670921 10.48251
42 Taurus Mutual Fund 255976.85 0.365400536 0.133518
43 UTI Mutual Fund 6718882.58 9.591036445 91.98798
Grand Total 70053769.67 100 790.135

It is calculated by squaring the market share of each firm competing in a market, and
then summing the resulting numbers. The HHI number can range from close to zero
to 10,000. It expressed as:
HHI = s1^2 + s2^2 + s3^2 + ... + sn^2 (where sn is the market share of the ith firm).

The closer the Herfindahl index towards the 10000 is to being a monopoly, the higher
the market's concentration (and the lower its competition). If, for example, there were
only one firm in an industry, that firm would have 100% market share, and the HHI
would equal 10,000 (100^2), indicating a monopoly. Or, if there were thousands of
firms competing, each would have nearly 0% market share, and the HHI would be
close to zero, indicating nearly perfect competition.

After calculation the Herfindahl index of Mutual Fund, I have found it to be 790.13
which indicate the Perfect competition in the Mutual Fund industry.

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7.1 Michael Portal Analyses:

1) Competitive Rivalry: In Mutual fund industry, competition is too high. Many
Fund houses offer large number of schemes.

2) Threat of Substitute Products: It means many companies offer similar types
of product, which create threats for new companies because of substitute of
there product is being offered by there major competitors.

3) Bargaining Power of Supplier: In Mutual Fund industry, Supplier would be
the Stock Market which provides valuable stock to the various schemes of
Fund houses. Fund Manager has Bargaining power in the form of analytical
skill to select most valuable and inexpensive scripts for its Portfolios.

4) Bargaining Power of Customer: Customers of Mutual Funds industry would
Bargain on the basis of returns and Expense ratio (Expense incurred in
managing the Fund) of various schemes. Customer would choose the funds,
which have low Expense ratio and probably give high return in future.

5) Threats of New Entrance: In Mutual Fund Industry, new players would be
abandon due to Market regulator SEBI‘s policy like removing the entry load,
many legal requirement ect. Also, volatility in the Stock market and high
competition level would force new player to keep themselves away form the
industry.

Bargaining Threats of
power of New
Customers Entrance

Bargaining Threats of
Competitive
Power of Substitute
Rivalry within
Supplier products
an Industry

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CHAPTER 6
GROWTH DRIVERS OF INDUSTRY

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6. GROWTH DRIVERS:

Although several macroeconomic and development factors affect the growth of the
industry, the key underlying driver for all the categories of fund is the key economic
indicator – the GDP growth rate.

The Growth Drivers of Customer segments are follows:

a) Retail Segment
Rising disposable income and savings.
Favorable demographics such as increasing proportion of working
population (20-59 years) and increasing urbanization resulting in
increased levels of financial savviness.
Innovation in distribution.
Increasing awareness level.
Quality financial planning.
b) Institutional Segment:
Rising corporate earning
Maturing capital market
Interest rate cycle
Call money market rate
Corporate debt and commercial paper

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CHAPTER 7
ISSUE AND CONCERN

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7. ISSUE AND CONCERN:

LOW customer awareness level and financial literacy pose the biggest challenge to
channelizing household saving into mutual find. Further fund houses have shown
limited focus on increasing retail penetration and building retail AUM. Most of the
AUMs and distributers have a limited focus beyond the top 20 cities that is
manifested in limited distribution channels and investors servicing, The Indian
mutual fund industry has largely been product –led and not sufficiently customer
focused with limited focus being accorded by players to innovative and new
product development .Further there is limited flexibility in fees and pricing
structure currently.

Distributors and the mutual fund houses have exhibited limited interest in
continuously engaging with customer post closure of sale as the commission and
incentive have been largely in the form of upfront fees from product sales. Limited
focus of the public sector network including public sector banks, Indian post, ect
on the Distribution of mutual funds has also impeded the growth of the industry.
Further multiple regulatory framework govern different verticals within the
financial services sectors ,such as different policies pertaining to the PAN card
requirement, KYC(Know your client) requirement , mode of payment (cash v/s
cheque), funds management by insurance companies and commission structure,
among others.

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Major Assets Management Companies (AMC’s)

8.1. UTI MUTUAL FUND:

UTI Mutual Fund was started in 14, January 2003 by UTI Trustee Co, Pvt. Ltd. for
managing the schemes of UTI Mutual Fund. UTIAMC provides professionally
managed back office support for all business services of UTI Mutual Fund in
accordance with the provisions of the Investment Management Agreement, the Trust
Deed, the SEBI Regulations and the objectives of the schemes.

Since February 3, 2004, UTIAMC is also a registered portfolio manager under the
SEBI for undertaking portfolio management services. UTIAMC also acts as the
manager and marketer to offshore funds through its 100 % subsidiary, UTI
International Limited, registered in Guernsey, Channel Islands.

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 variety of
schemes catering to the needs of every class of citizens. It has a nationwide network
consisting 148 UTI Financial Centers (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 funds with greater efficiency and accountability in the
sole interest of the unit holders.

UTIMF has consistently reset and upgraded transparency standards. All the branches,
UFCs and registrar offices are connected on a robust IT network to ensure cost-
effective quick and efficient service.

Schemes taken for analysis from UTI Mutual Fund are:

8.1.1 UTI Divided Yield Fund(G) : The investment objective of the Scheme is "to
provide medium to long term capital gains and/or dividend distribution by investing
predominantly in equity and equity related instruments, which offer high dividend

34

yield. There can be no assurance that the investment objectives of the scheme will be
realized."

Fund overview:

Fund Types- Open Ended
Investment Plan- Growth
Assets Sizes- 2,998.41 (Mar-31-2011)
Launch date- May 03, 2005
Bench mark- BSE 100
Fund Manager- Swati Kulkarni

8.1.2 UTI Large Equity Fund (G): The Scheme is designed specifically for large
corporate investors and as well as high net worthy investors who would like to invest
large amount in exclusive Scheme which allows entry and exit at NAV.

Fund overview:

Assets Sizes- 2,006.93 (Mar-31-2011)
Launch date- May18, 1992
Bench mark- BSE sensitive index
Fund Manager- Mr. Anoop Bhaskar

8.2. BIRLA SUNLIFE MUTUAL FUND:

Birla Sun Life Asset Management Company Ltd. (BSLAMC) is a joint venture
between the Aditya Birla Group and the Sun Life Financial Services Inc. of Canada.
The joint venture brings together the Aditya Birla Group's experience in the Indian
market and Sun Life's global experience.

35

Birla Sunlife Mutual Fund is established in 1994 .It offer a range of investment
options, including diversified and sector specific equity schemes, fund of fund
schemes, hybrid and monthly income funds, a wide range of debt and treasury
products and offshore funds. BSLAMC is one of the largest team of research analysts
in the industry, dedicated to tracking down the best companies to invest in. BSLAMC
strives to provide transparent, ethical and research-based investments and wealth
management services.

Schemes taken for analysis from BIRLA SUNLIFE MUTUAL FUND are:

8.2.1Birlasunlife Advantage Fund: To achieve long-term growth of capital through
investments mainly in equity and equity related instruments.

Fund overview:
Assets Sizes- 347.31 (Mar-31-2011)
Launch date- Feb 24, 1995
Bench mark- BSE Sensitive index
Fund Manager- Mr. Ajay Argal

8.2.2BirlaSunlife Small & Midcap Fund:

It objective is to generate consistent long-term capital appreciation by investing
predominantly in equity and equity related securities of companies considered to be
small and mid cap. It may also invest a certain portion of its corpus in fixed income
securities including money market instruments, in order to meet liquidity requirements
from time to time.

Fund overview

Assets Sizes- 143.73 (Mar-31-2011

36

Launch date- Apr 9, 2007
Bench mark- CNX MID CAP
Fund Manager- Mr. Ankit Sancheti

8.3. FRANKLIN TEMPLETION MUTUAL FUND:

Franklin Templeton Investments is one of the largest financial services groups in the
world based at San Mateo, California USA. The group has US$ 642.3 billion in assets
under management globally. Franklin Templeton has offices in 33 locations across
India and manages average AUM of Rs. 42142.21 crores for over 22 lakhs investors
(as on September 30, 2010).

Schemes taken for analysis from Franklin Templation Mutual Fund are:

8.3.1 Franklin Templation FMCG Fund (G): The scheme aims to achieve long term
capital appreciation through exclusively investing in shares of Fast Moving Consumer
Goods Companies.

Fund overview:
Assets Sizes- Rs 54.22crores
Launch date- Mar 31, 1999
Bench mark- NA
Fund Manager- Anil Prabhudas

8.3.2 Franklin Bluechip Fund (G): Scheme aim is to achieve a high degree of
capital appreciation through investments in well-established, large size blue chip
companies.

Fund Overview:


37

Assets Sizes- 3,396.49
Launch date- Nov 30, 1993
Bench mark- BSE Sensitive Index
Fund Manager- Anand Radhakrishnan / Anand Vasudevan /

8.4. HDFC MUTUAL FUND:

HDFC Asset Management Company Ltd (AMC) was incorporated under the
Companies Act, 1956, on December 10, 1999, and was approved to act as an Asset
Management Company for the HDFC Mutual Fund by SEBI vide its letter dated July
3, 2000.

In terms of the Investment Management Agreement, the Trustee has appointed the
HDFC Asset Management Company Limited to manage the Mutual Fund. The paid up
capital of the AMC is Rs. 25.161 crore. The AMC is managing 28 open-ended
schemes of the Mutual Fund some are HDFC Growth Fund, HDFC Equity Fund,
HDFC Top 200 Fund, HDFC Capital Builder Fund, HDFC Core & Satellite Fund,
HDFC Premier Multi-Cap Fund, and HDFC Index Fund.

The AMC is also managing 7 closed ended Schemes some are HDFC Long Term
Equity Fund, HDFC Infrastructure Fund, and HDFC Fixed Maturity Plans - Series XI,
HDFC Fixed Maturity Plans - Series XII.The AMC is also providing portfolio
management / advisory services.

The schemes taken for analysis from HDFC MUTUAL FUND are:

8.4.1 HDFCTop200 Fund: It objective is to generate long term capital appreciation
by investing in a portfolio of equities and equity linked instruments drawn from the
BSE 200 Index.

Fund Overview:


38

Assets Sizes- Rs. 9,591.26 (Mar-31-2011)
Launch date- Oct 27, 2004
Bench mark- BSE 200 index
Fund Manager- Mr. Prashant Jain

8.4.2 HDFC Balance Fund (G): The primary objective of the Scheme is to generate
capital appreciation along with current income from a combined portfolio of equity
& equity related and debt & money market instruments.

Fund Overview:

Assets Sizes- 260.12 (April 29, 2011)
Launch date- September 11, 2000
Bench mark- NA
Fund Manager- Mr. Chirag Setalvad

8.5. KOTAK MAHINDRA MUTUAL FUND:

Kotak Mahindra is one of India's leading financial institutions, offering complete
financial solutions that encompass every sphere of life. From commercial banking, to
stock broking, to mutual funds, to life insurance, to investment banking, the group
caters to the financial needs of individuals and corporate.
The group has a net worth of Rs.7,911 crore and employs around 20,000 employees
across its various businesses, servicing around 7 million customer accounts through a
distribution network of 1,716 branches, franchisees and satellite offices across more
than 470 cities and towns in India and offices in New York, California, San Francisco,
London, Dubai, Mauritius and Singapore.

Kotak Mahindra Asset Management Company Limited (KMAMC), a wholly owned
subsidiary of KMBL, is the Asset Manager for Kota Mahindra Mutual Fund (KMMF).

39

KMAMC started operations in December 1998 and has over 10 Lac investors in
various schemes. KMMF offers schemes catering to investors with varying risk -
return profiles and was the first fund house in the country to launch a dedicated gilt
scheme investing only in government securities.

The schemes taken for analysis from KOTAK MAHINDRA Mutual Fund are:

8.5.1 Kotak Mahindra Midcap Fund (G): The investment objective of Kotak
Midcap is to generate capital appreciation from a diversified portfolio of equity &
equity related securities. The scheme predominantly invests in companies in the mid
market capitalization segment across sectors. The scheme is well positioned to provide
the benefit of potential growth offered by mid cap stocks which are likely to become
tomorrows large caps.

Fund overview:

Launch date- Jan 28, 2005
Bench mark- CNX Nifty junior
Fund Manager- Mr. Pankaj Tibrewal

8.5.2 Kotak Equity FOF: To generate long-term capital appreciation from a portfolio
created by investing predominantly in open-ended diversified equity schemes of
Mutual Funds registered with SEBI.

Fund overview:


40

Launch date- Aug 09, 2004
Bench mark- NA

Fund Manager- Mr. Sajit Pisharodi

8.6. RELIANCE MUTUAL FUND:

Reliance Mutual Fund is India‘s leading Mutual Fund with Quarter Average Assets
under management (AAUM) of Rs 102066Crores.

Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is one
of the fastest growing mutual funds in the country. RMF offers investors a well-
rounded portfolio of products to meet varying investor requirements and has presence
in 159 cities across the country. Reliance Mutual Fund constantly endeavors to launch
innovative products and customer service initiatives to increase value to investors.
"Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management
Limited., a subsidiary of Reliance Capital Limited, which holds 93.37% of the paid-up
capital of RCAM.

The schemes taken for analysis from Reliance Mutual Fund are:

8.6.1 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 Sector.

Fund overview:

Assets sizes- 1,647.46 (Mar-31-2011
Launches date- May21, 2003
Benchmark- Bank Nifty
Fund Manager- Mr. Sunil Singhania

41

8.6.2Rliance Media & Entertainment Fund (G) : It generate consistent returns by
investing in equity / equity related or fixed income securities of media &
entertainment and other associated companies.

Fund overview:

Investment Plain- Growth
Assets sizes- 77.47 (Mar-31-2011)
Launch date- Sep 27, 2007
Benchmark- NA
Fund Manager- Mr. Sailesh raj Bhan

8.7. SBI MUTUAL FUND:

SBI Mutual Fund is India‘s largest bank sponsored mutual fund and has a track record
in judicious investments and consistent wealth creation. The fund traces its lineage to
SBI - India‘s largest banking enterprise. The institution has grown immensely since its
inception and today it is India's 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 Asset Management, one of the world‘s leading fund management
companies that manages over US$ 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 its investors handsomely with
consistent returns.

42

A total of over 5.8 million investors have reposed their faith in the wealth generation
expertise of the Mutual Fund.

Today, the fund manages over Rs. 42,100 crores of assets and has a 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 centers, 59 investor service desks
and 6 Investor Service Points.

SBI Mutual is the first bank-sponsored fund to launch an offshore fund – Resurgent
India Opportunities Fund.

The schemes that I have taken for analysis from SBI Mutual Fund are:

8.7.1SBI Magnum Sector Umbrella Pharma(G):

It provides the investor‘s maximum growth opportunity through equity investments
in stocks of growth oriented sector called Pharma in long run.

Fund overview:

Assets Sizes- 38.70 (Dec-31-2010)
Launch date- JUL 14, 1999
Bench mark- BSE health care
Fund Manager- Mr. Sohini Andani

8.7.2 SBI Magnum 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:


43

Launch date- jan 1, 1991
Bench mark- BSE 100
Fund Manager- Mr. R Srinivasan

8.8. SUNDARAM BNB PARIBAS MUTUAL FUND:

Sundaram Mutual, identifying an investment opportunity long before it manifests as
one, is the heart of our business belief. Being in the financial sector for a long time has
given us a great understanding of the Indian economy and that guides us while picking
the companies for its Funds. Once it unearth a potential opportunity, its Financial
Experts spend countless time to research the companies, to see what will deliver the
best returns for your money. Its financial experts are fine tuned to the larger global
picture and all its complexities as well as the intricacies of the Indian market. We track
global economic trends and market behavior to better understand the domestic
markets. We are constantly on the trail of promising opportunities and once identified,
a new theme is thoroughly researched and tested on various platforms before being
offered to the investing public.

The schemes taken for analysis from SUNDARAM BNB PARIBAS Mutual Fund
are:

44

8.8.1 Sundaram Select Midcap Fund (G): Sundaram Select Mid Cap Fund is an
open ended equity scheme that seeks capital appreciation by investing in diversified
stocks that are generally termed as mid -caps.

Fund overview:

Assets Sizes- 2,074.10 (Mar-31-2011)
Launch date- Jul 19, 2002
Bench mark- BSE Mid cap index
Fund Manager- Mr. Satish Ramanathan

8.8.2 Sundaram BNB Paribas select Smallcap Fund(G): The primary investment
objective of the scheme is to generate consistent long-term returns by investing
predominantly in equity/equity related instruments of companies that can be termed as
small cap.

Fund objective:

Bench mark- BSE Small cap index
Fund Manager- Mr. Satish Ramanathan

8.9. RELIGARE MUTUAL FUND:

Religare Mutual Fund is managed by Religare Asset Management Company Limited,
a subsidiary of Religare Securities Limited (RSL). The AMC was incorporated on
May 20, 2005 and the mutual fund was set up on July 24, 2006.

45

It manages Assets around Rs104 billion dollars. Religare Asset Management aims to
serve investment needs of individual investors, corporate and institutions through
mutual funds and sub-advised portfolios. Its product portfolio is managed by
individually focused management teams to create optimum balance and results. They
are committed to providing financial care and top class service. They subscribe to
sustainable business models and process that factor in the dynamism of the business in
fast changing market scenarios.

The schemes taken for analysis from Religare Mutual Fund are:

8.9.1 Religare Small & Midcap Fund: The Scheme seeks to provide long term
capital appreciation by investing in a portfolio that is predominantly constituted of
equity and equity related instruments of mid and small cap companies.
Fund overview:
Bench mark- NA
Fund Manager- Mr. Vinay Paharia

8.9.2 Religare Equity Fund (G): The investment objective of the Scheme is to
generate long-term capital growth from a focused portfolio of predominantly equity
and equity-related securities.

Fund overview:

46

Bench mark- BSE 100

Fund Manager- Vetri Subramaniam

8.10. TATA MUTUAL FUND:

Tata Mutual Fund has earned the trust of lakhs of investors with its consistent
performance and world-class service.

It manages around Rs20,854.00 crores (average AUM for the quarter of October-
December 2010) worth of assets across its varied offerings. Tata Mutual Fund offers
an investment option for everyone, whether you are a businessman or salaried
professional, a retired person or housewife, an aggressive investor or a conservative
capital builder.

The Tata Asset Management philosophy is centered on seeking consistent, long-term
results. Tata Asset Management aims at overall excellence, within the framework of
transparent and rigorous risk controls.

Tata Mutual Fund offers investors a broad range of managed investment products in
various asset classes and risk parameters, with operational flexibility to suit their
varied investment needs.

It offer a wide range of services to assist investors have a fulfilling and rewarding
financial planning experience with us. It has designed our services keeping in mind the
needs of our investors, giving them a smooth and hassle-free financial planning
process.

The schemes taken for analysis from TATA Mutual Fund are:

8.10.1 Tata Dividend yield Fund (G): To Provide income distribution and / or
medium to long term capital gains by investing predominantly in high dividend yield
stocks.

Fund overview:

47

Fund Manager- Mr. Mahendra Jajoo / Sachin Relekar

8.10.2 TATA OPPORTUNITY FUND (G): It aims to provide a vehicle to enable
investors to avail tax benefits u/s 88 and distributing a reasonable annual dividend if
any, and at the same time making an attempt for capital appreciation.

Fund overview:

Launch date- Mar 30, 1993
Fund Manager- Mr. M Venugopal

8.11. DSP BlackRock Mutual Fund

DSP BlackRock Investment Managers Pvt. Ltd. is the investment manager to DSP
BlackRock Mutual Fund.

The philosophy of DSP BlackRock Investment Managers Pvt. Ltd. has been grounded
in the belief that experienced investment professionals, using a disciplined process and
sophisticated analytical tools, can consistently add value to client portfolios.

48

DSP BlackRock Investment Managers Pvt. Ltd. takes a three dimensional approach to
the management of the organization, incorporating functional, product and regional
elements in support of clients' goals. The functional dimension looks at the company's
operations by specific task, such as portfolio management, account management or
operations. The product dimension brings together the cross-disciplinary expertise
critical to managing client assets in each class. Finally, the regional aspect of the
company's model recognizes the unique, geography-specific needs of clients as well as
the importance of local regulatory issues.

With our three-dimensional approach to managing the organization, we seek to:

Ensure consistency on a global basis;
Allow for the tailoring of products and services according to client or local
needs;
Promote teamwork among our employees worldwide; and
Facilitate operational integrity and efficiency

The schemes taken for analysis from DSP Black Rock Mutual Fund are:

8.11.1 DSP Black Rock Balance Fund(G): It Seeks to generate long term capital
appreciation and current income from a portfolio constituting equity and equity related
securities as well as fixed income securities

Fund overview:

Bench mark- NA
Fund Manager- Mr. Apoorva Shah

8.11.2 DSP Equity Fund Institutional Plan(G): The DSP Merrill Lynch Equity Fund
is an open-ended growth scheme seeking to generate long-term capital appreciation,

49

from a portfolio which is substantially constituted of equity and equity related
securities of issuers domiciled India. The scheme may also invest a certain portion of
its corpus in debt and money market securities, in order to meet liquidity requirements
from time to time.

Fund overview:

Launch date- Apr 01, 2007
Bench mark- BSE 100
Fund Manager- Mr. Apoorva Shah

8.12.ICICI Prudential Mutual Fund:

ICICI Prudential Asset Management Company Ltd. is a joint venture between ICICI
Bank, India‘s second largest commercial bank & a well-known and trusted name in
the financial services in India, & Prudential Plc, one of the United Kingdom‘s largest
players in the financial services sectors.

In a span of just over 12 years, the company has forged a position of preeminence as
one of the largest Asset Management Company‘s in the country, contributing
significantly towards the growth of the Indian mutual fund industry.

50

Our Average Assets under Management (AAUM) as on Mar 2011 Month-end in
Mutual Fund Schemes stood at Rs. 73551.95 Crores. This is in addition to our
Portfolio Management Services, inclusive of EPFO*, and International Advisory
Mandates for clients across international markets in asset classes like Debt, Equity and
Real Estate with primary focus on risk adjusted returns.

As an Asset Management Company, we have over 15 years of experience and are
currently managing a comprehensive range of schemes of more than 46 Mutual funds
and a wide range of PMS Products for our investors, spread across the country. We
service this investor base with our own branch network of over 160 branches and a
distribution reach of over 42,000 channel partners.

The schemes taken for analysis from ICICI Prudential Mutual Fund are:

8.12.1 ICICI Prudential Balance (G): To seek to generate long term capital
appreciation and current income from a portfolio that is invested in equity and equity
related securities as well as in fixed income & money market securities.

Fund overview:

Bench mark- NA
Fund Manager- Rahul Goswami/Munzal Shah/Mrinal Singh

8.12.2 ICICI Prudential Blended Plan (G): To generate efficient risk adjusted return
for the investor by using arbitrage opportunity in equity and equity derivative market.

Fund overview:

51

Assets Sizes- 60.90 (March 31, 2011)
Bench mark- NA
Fund Manager- Mr. Devang Shah

8.13. IDFC Mutual Fund

IDFC is a leading private sector diversified financial institution established by a
consortium of strong global and local institutions with the support and sponsorship of
the Government of India.
A majority of IDFC‘s shareholding (67% as of March 31, 2008) is held by reputed
global stalwarts that include respectable names like Government of India, International
Finance Corporation (IFC) - a member of the World Bank Group, Government of
Singapore, AIG, Morgan Stanley, Goldman Sachs, Citigroup, JP Morgan among
others. The best Indian financial institutions such as HDFC, LIC, SBI, and IDBI are
owners in IDFC, making it an institution of high repute and standing.

The schemes taken for analysis from IDFC Mutual Fund are:

8.13.1 IDFC Fixed Maturity Plan – 3Plan A(G):

Fund overview:

Bench mark- NA
Fund Manager- Anupam Joshi

52

8.13.2 IDFC Equity (G): To generate long-term capital growth from an actively
managed portfolio of predominantly equity and equity related instruments. The
Scheme portfolio would acquire, inter alia, small and medium size businesses with
good long term potential, which are available at cheap valuations. Such securities
would be identified through disciplined fundamental research keeping in view medium
to long-term trends in the business environment.

Fund overview:

Launch date- September 28, 2005
Bench mark- NA
Fund Manager- Mr. Kenneth Andrade

8.14. Canara Robeco Mutual Fund:

Canara Robeco Asset Management Company Limited (CRAMC), the investment
managers of Canara Robeco Mutual Fund, is a joint venture between Canara Bank and
Robeco of the Netherlands, a global asset management company that manages about
US$180 Billion worldwide. The joint venture brings together Canara Bank's
experience in the Indian market and Robeco's global experience in asset management.
Canara Robeco Mutual Fund is the oldest Mutual Fund in India, established in
December 1987 as Canbank Mutual Fund. Subsequently, in 2007, Canara Bank
partnered Robeco and the mutual fund was renamed as Canara Robeco Mutual Fund.
Since then, it has consistently been one of the fastest growing mutual funds in India in
terms of AuM, having grown 94% year-on-year from March 2009 to March 2010. Our
solutions offer a range of investment options, including diversified and thematic
equity schemes, hybrid and monthly income funds and a wide range of debt and
treasury products.

53

Canara Robeco AMC manages the assets of Canara Robeco Mutual Fund by virtue of
an investment management agreement dated 16th June 1993 (as amended from time to
time). As of 31 December 2010, the AMC has Rs. 7,392 crores of average assets under
management and has a diverse profile of investors invested across 20 active schemes.

8.14.1 Canara Robeco Balance Growth Plan: The investment objective of the
scheme is to generate long-term capital appreciation and/or income from a portfolio
constituted of equity and equity related securities as well as fixed income securities.

The schemes taken for analysis from Canara Robeco Mutual Fund are:

Fund overview:

Assets Sizes- NA
Launch date- March 31, 2000
Bench mark- NA
Fund Manager- Mr. Soumendra Nath Lahiri

8. 14.2 Canara Robeco Infrastructure (G): To generate income/capital appreciation
by investing in equities and equity related instruments of companies in the
infrastructure sector.

Fund overview:

Assets Sizes- NA
Launch date- December 02, 2005
Bench mark- BSE 100
Fund Manager- Mr. Soumendra Nath Lahiri

54

8.15.Axis Mutual Fund

Axis Bank was the first of the new private banks to have begun operations in 1994,
after the Government of India allowed new private banks to be established. The Bank
was promoted jointly by the Administrator of the specified undertaking of the Unit
Trust of India (UTI - I), Life Insurance Corporation of India (LIC) and General
Insurance Corporation of India (GIC) and other four PSU insurance companies, i.e.
National Insurance Company Ltd., The New India Assurance Company Ltd., The
Oriental Insurance Company Ltd. and United India Insurance Company Ltd.

The Bank as on 31st December, 2010 is capitalized to the extent of ` 409.90 crores
with the public holding (other than promoters and GDRs) at 53.62%.

The Bank's Registered Office is at Ahmedabad and its Central Office is located at
Mumbai. The Bank has a very wide network of more than 1281 branches (including
169 Service Branches/CPCs as on 31st December, 2010). The Bank has a network of
over 5303 ATMs (as on 31st December, 2010) providing 24 hrs a day banking
convenience to its customers. This is one of the largest ATM networks in the country.

The Bank has strengths in both retail and corporate banking and is committed to
adopting the best industry practices internationally in order to achieve excellence.

The schemes taken for analysis from Axis Mutual Fund are:

8.15.1 Axis Equity (G): To achieve long term capital appreciation by investing in a
diversified portfolio predominantly consisting of equity and equity related securities
including derivatives.

Fund overview:


55

Launch date- November 11, 2009
Bench mark- NA
Fund Manager- Mr. Chandresh Nigam

8.15.2 Axis Tax Saver (G): The investment objective of the Scheme is to generate
income and long-term capital appreciation from a diversified portfolio of
predominantly equity and equity-related Securities.

Fund overview:

Launch date- December 17, 2009
Bench mark- BSE 200
Fund Manager- Mr. Chandresh Nigam

56

CHAPTER 9
PERFORMANCE SHEETS

9.1Performance Sheet (Risk adjusted Return) on the Basis of Sharpe Ratio:

Rank Schemes Sharpe Ratio
1. HDFC Balance Fund(G) 2.31

57

2. Franklin FMCG(G) 2.15
3. Reliance Banking(G) 1.98
4. Tata Dividend yield Fund(G) 1.79
5. Axis Tax Saver(G) 1.77
6. Religare Small & Midcap fund 1.65
7. Kotak Midcap Fund(G) 1.30
8 SBI Magnum Sector Umbrella Pharma(G) 1.30
9. UTI Devidend yield(G) 1.35
10. ICICI Prudential Balance (G) 1.28
11. DSP Equity Fund Institutional Plan(G) 1.25
12. HDFC Top200 1.24
13. Franklin bluechip(G) 1.23
14. ICICI Prudential Blended Plan (G) 1.07
15. Canara Robeco Balance Growth Plan 1.04
16. Sundaram Select Midcap Fund (G) 1.02
17. UTI Equity (G)
0.97
18. SBI Magnum Equity Fund(G) 0.94
19. Religare Equity fund(G) 0.89
20. Birlasunlife small&midcap Fund 0.79
21. Sundaram BNB Paribas select Smallcap 0.76
Fund(G)
22. IDFC Equity (G) 0.74
23. DSP Black Rock Balance Fund(G) 0.64
24. Reliance Media & Entertainment 0.53
25. Canara Robeco Infrastructure (G) 0.44
26. Birlasunlife Advantage Fund(G) 0.43
27. Tata Opportunity Fun (G) 0.33
28. Axis Equity(G) -0.21
29. Kotak Equity FOF -0.89

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30. IDFC Fixed Maturity Plan – 3Plan A(G) -0.98

9.2Performance Sheet (Risk adjusted Return) on the Basis of Treynor Ratio:

Rank Schemes Treynor Ratio
1. Franklin FMCG(G) 0.56
2. HDFC Balance Fund(G) 0.51
3. Reliance Banking(G) 0.48
4. Religare Small & Midcap fund 0.46
5. SBI Magnum Sector Umbrella Pharma(G) 0.36
6. Tata Dividend yield Fund(G) 0.34
7. Axis Tax Saver(G) 0.33
8. Kotak Midcap Fund(G) 0.29
9. DSP Equity Fund Institutional Plan(G) 0.25
10. UTI Devidend yield(G) 0.24
11. Sundaram Select Midcap Fund (G) 0.22
12. Sundaram BNB Paribas select Small cap 0.22
Fund(G)
13. ICICI Prudential Balance (G) 0.22
14. Canara Robeco Balance Growth Plan 0.22
15. Birlasunlife small&midcap Fund 0.21
16. Franklin Bluehip(G) 0.21
17. HDFC Top200 0.21
18. UTI Equity (G) 0.17
19. SBI Magnum Equity Fund(G) 0.16
20. Reliance Media & Entertainment 0.15
21. Religare Equity fund(G) 0.15
22. DSP Black Rock Balance Fund(G) 0.13
23. IDFC Equity (G) 0.12
24. Canara Robeco Infrastructure (G) 0.08

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25. Birlasunlife Advantage Fund(G) 0.07
26. Tata Opportunity Fun (G) 0.06
27. Axis Equity(G) -0.039
28. ICICI Prudential Blended Plan (G) -0.32
29. Kotak Equity FOF -0.98
30. IDFC Fixed Maturity Plan – 3Plan A(G) -1.10

60

CHAPTER 10
FINDINGS AND
RECOMMENDATIONS

10.1 FINDINGS:

61

1) Sharpe Ratio of HDFC Balance Fund is(2.31) highest among the ranking
of 30 Schemes, followed by Franklin FMCG(2.15),Reliance
Banking(1.98) ect.Which shows there Risk-adjusted return is Excellent.
2) Sharpe Ratio of Axis Equity(-0.21),Kotak Equity fof(-0.89) and IDFC
Fixed Maturity Plan(-0.98) are in negative which shows there Risk –
adjusted return worse.
3) Treynor Ratio of Franklin FMCG(0.56) is highest, followed by HDFC
Balance fund(0.51),Reliance Banking(0.48),Religare small& midcap(0.46),
ect.which shows there Risk-adjusted return on overall market is Excellent.
4) Treynor Ratio of Axis Equtiy(-0.03), ICICI Blended Plan(-0.32), Kotak
Equity fof(-0.98) and IDFC Fixed Maturity Plan(-1.10) are in negative
,which shows there Risk- adjusted return worse.

10.2 RECOMMENDATIONS:

1) According to me one should give priority to HDFC Balance Fund because
its Shape ratio is highest and its Treynor ratio is second highest.
2) One should give second priority to Franklin FMCG because it‘s Rank third
on the basis of Sharpe ratio and first on the basis of Treynor ratio.
3) Moreover, investors should keep themselves away from Axis Equity
,Kotak Equity and IDFC Fixed Maturity Plan because there Sharpe ratios
and Treynor ratios are negative which shows there worse performance
4) If any investor want to invest in any UTI Schemes ,he/she should give
priority to UTI Devidend yield fund which in the 9th rank on the basis of
the Sharpe ratio and 10th rank on the basis of the Treynor ratio.

62

CHAPTER 11
REFERENCES

11.1) Web sites:

63

1) http://www.bluechipindia.co.in/

2) http://www.franklintempletonindia.com

3) http://www.utimf.com

4) http://www.hdfcfund.com/

5) http://mutualfund.birlasunlife.com

6) http://reliancemutual.com/

7) http://investopedia.com

8) http://money.rediff.com

9) http://moneycontrol.com

DOC

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