Mutual Funds and Systematic Investment Plan

2. “A STUDY ON PERFORMANCE OF SYSTEMATIC
INVESTMENT PLAN AND PERFORMANCE EVALUATION
OF SELECTED MUTUAL FUNDS AT MAHINDRA FINANCE”
Kamal Ega

3. INTRODUCTION
Mutual Fund
A mutual fund is a pool of money which is
collected from many investors and it is invested by
an asset management company to achieve some
common objective of the investors.
Advantages of mutual fund
Professional Management
Diversification
Choice of Schemes
Tax Benefits
Liquidity
Well Regulated
Flexibility

4. BY
STRUCTURE
OPEN
ENDED
CLOSE
ENDED
BY
INVESTMENT
OBJECTIVE
GROWTH
INCOME
BY OTHERS
SCHEMES
TAX
SAVINGS
SPECIAL
1)INDEX
2)SECTOR
SPECIFIC
CLASSIFICATION OF MUTUAL FUNDS:

5. Systematic Investment Plan
A Systematic Investment Plan (SIP) is a vehicle
offered by mutual fund to help investors save
regularly.
Like each drop of water makes an ocean, similarly
small savings in SIP results into large fund in the
future. Under SIP, a certain amount of money
of invested at regular daily/ weekly/ monthly
intervals which results into huge savings at the
end. SIP can rightly be called as "disciplined
mode of investment" as a form of discipline is
maintained in SIP.

6. NEED FOR THE STUDY
 Generally most of the investors are eager to
park their fund in Mutual Funds with a view of
earning more returns with level of risk so find the
good fund.
 A study is required to analyze the
performance of selected funds and performance of
SIP in different funds in Mutual Fund Industry.
 This study provides opportunity to assess the
SIP performance in the different market volatility
conditions.

7. The Study has been carried on the Selected Mutual Fund
schemes such as
1. Tata Growth Fund (G)
2. Sahara Growth Fund (G)
3. HDFC Growth Fund (G)
4. Reliance Growth Fund (G)
The study is basically to evaluate the performances of
Growth Fund (G) schemes by taking the last five years NAV
i.e., 2007-2011.
We can estimate future rate of returns to invest in the
mutual funds to gain an save the money
SCOPE OF THE STUDY

8. OBJECTIVES OF THE STUDY
To find the performance of SIP
To Assess SIP, protected against market
conditions volatility
 To find the fluctuations in Units purchased,
and Units allocated
 To evaluate the performance of selected
funds
 To compare the performance of selected
funds returns against their bench mark.

9. SOURCES OF DATA
My study consists of secondary data
Research Type : Exploratory Research
Data Sources : Websites, Reference Books, Fact sheets
Analytical Tools : Beta, Standard Deviation, Trey-nor &
Sharpe Measures

11. Formulas Used
 Expected Returns
 variance=
 STANDARD DEVIATION =
 Beta=
Treynor Ratio = Sharpe Ratio =

12. 1.Tata Growth Fund (G)
Investment date Investment Amount Purchase Price Units Purchased
2007 Q1 1 2000 31.692 63.107
Q2 2 2000 29.964 66.747
Q3 3 2000 36.68 54.526
Q4 4 2000 40.321 49.602
2008 Q1 5 2000 52.714 37.941
Q2 6 2000 37.293 53.629
Q3 7 2000 31.019 64.477
Q4 8 2000 28.318 70.626
2009 Q1 9 2000 21.093 94.818
Q2 10 2000 19.579 102.15
Q3 11 2000 31.318 63.861
Q4 12 2000 36.995 54.061
2010 Q1 13 2000 39.752 50.312
Q2 14 2000 40.381 49.528
Q3 15 2000 43.294 46.196
Q4 16 2000 47.973 41.69
2011 Q1 17 2000 46.207 43.283
Q2 18 2000 41.833 47.809
Q3 19 2000 43.076 46.43

13. GRAPH:1 Tata Growth Fund (G)
0
20
40
60
80
100
120
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Purchase Price (Rs)
Units Purchased

14. 2. Sahara Growth Fund (G)
Investment date Investment Amount Purchase Price Units Purchased
2007 Q1 1 2000 51.085 39.15
Q2 2 2000 46.085 43.398
Q3 3 2000 54.86 36.456
Q4 4 2000 64.176 31.164
2008 Q1 5 2000 81.766 24.46
Q2 6 2000 62.326 32.089
Q3 7 2000 51.921 38.52
Q4 8 2000 55.53 36.017
2009 Q1 9 2000 46.615 42.905
Q2 10 2000 46.848 42.691
Q3 11 2000 64.814 30.858
Q4 12 2000 76.65 26.093
2010 Q1 13 2000 78.924 25.341
Q2 14 2000 77.505 25.805
Q3 15 2000 78.407 25.508
Q4 16 2000 89.133 22.438
2011 Q1 17 2000 86.782 23.046
Q2 18 2000 81.305 24.599
Q3 19 2000 80.474 24.853

15. GRAPH:2 Sahara Growth Fund (G)
0
10
20
30
40
50
60
70
80
90
100
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Purchase Price (Rs)
Units Purchased

16. 3. HDFC Growth Fund (G)
Investment date Investment Amount Purchase Price Units Purchased
2007 Q1 1 2000 48.828 40.96
Q2 2 2000 43.815 45.646
Q3 3 2000 55.289 36.174
Q4 4 2000 64.356 31.077
2008 Q1 5 2000 81.287 24.604
Q2 6 2000 62.027 32.244
Q3 7 2000 51.612 38.751
Q4 8 2000 55.166 36.254
2009 Q1 9 2000 42.37 47.203
Q2 10 2000 39.015 51.262
Q3 11 2000 57.756 34.628
Q4 12 2000 68.587 29.16
2010 Q1 13 2000 73.695 27.139
Q2 14 2000 75.313 26.556
Q3 15 2000 80.778 24.759
Q4 16 2000 94.214 21.228
2011 Q1 17 2000 93.576 21.373
Q2 18 2000 87.973 22.734
Q3 19 2000 87.724 22.799

17. GRAPH:3 HDFC Growth Fund (G)
0
10
20
30
40
50
60
70
80
90
100
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Purchase Price (Rs)
Units Purchased

18. 4. Reliance Growth Fund - Retail Plan (G)
Investment date Investment Amount Purchase Price Units Purchased
2007 Q1 1 2000 270.05 7.406
Q2 2 2000 251.78 7.943
Q3 3 2000 309.27 6.467
Q4 4 2000 354.09 5.648
2008 Q1 5 2000 476.85 4.194
Q2 6 2000 332.2 6.02
Q3 7 2000 291.422 6.863
Q4 8 2000 283.286 7.06
2009 Q1 9 2000 220.862 9.055
Q2 10 2000 210.508 9.501
Q3 11 2000 328.019 6.097
Q4 12 2000 393.198 5.086
2010 Q1 13 2000 431.412 4.636
Q2 14 2000 443.711 4.507
Q3 15 2000 456.764 4.379
Q4 16 2000 518.457 3.858
2011 Q1 17 2000 504.342 3.966
Q2 18 2000 461.427 4.334
Q3 19 2000 450.894 4.436

19. GRAPH:4 Reliance Growth Fund - Retail Plan (G)
0
100
200
300
400
500
600
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Purchase Price (Rs)
Units Purchased

20. SIP Performance of selected Mutual Funds
FUNDS RETURN
1. Tata Growth Fund (G) 45,666.24
2. Sahara Growth Fund (G) 45,110.50
3. HDFC Growth Fund (G) 50,117.52
4. Reliance Growth Fund (G) 46,717.88
45,666.24 45,110.50
50,117.52
46,717.88
42,000.00
44,000.00
46,000.00
48,000.00
50,000.00
52,000.00
1. Tata Growth
Fund (G)
2. Sahara Growth
Fund (G)
3. HDFC Growth
Fund (G)
4. Reliance
Growth Fund (G)
RETURN OF SIP
RETURN

21. SELECTED FUNDS RETURN VS RISK
FUNDS RETURN RISK
1. Tata Growth Fund (G) 18.15263 59.31417
2. Sahara Growth Fund (G) 69.86345 156.7574
3. HDFC Growth Fund (G) 18.17553 51.7225
4. Reliance Growth Fund (G) 8.006968 8.118373
18.15263
69.86345
18.17553
8.006968
59.31417
156.7574
51.7225
8.118373
0
20
40
60
80
100
120
140
160
180
1. Tata Growth
Fund (G)
2. Sahara Growth
Fund (G)
3. HDFC Growth
Fund (G)
4. Reliance
Growth Fund (G)
RETURN
RISK

22. BETA Values of the FUNDS
Funds S&P500
Index
BETA
VALUES
1. Tata Growth Fund (G) 1 2.249
Aggressive
Fund
2. Sahara Growth Fund (G) 1 2.108
3. HDFC Growth Fund (G) 1 1.865
4. Reliance Growth Fund (G) 1 -0.333 Defensive Fund
2.249 2.108
1.865
-0.333-0.5
0
0.5
1
1.5
2
2.5
1. Tata Growth
Fund (G)
2. Sahara
Growth Fund (G)
3. HDFC Growth
Fund (G)
4. Reliance
Growth Fund
(G)
S&P500 Index
Fund Performance

23. Treynor & Sharpe
FUNDS Treynor Sharp
Tata Growth Fund (G) 4.069 0.1543
Sahara Growth Fund (G) 28.872 0.3882
HDFC Growth Fund (G) 4.919 0.1773
Reliance Growth Fund (G) 2.982 -0.1223
4.069
28.872
4.919
2.982
0.1543 0.3882 0.1773
-0.1223
-5
0
5
10
15
20
25
30
35
Tata Growth Fund
(G)
Sahara Growth Fund
(G)
HDFC Growth Fund
(G)
Reliance Growth
Fund (G)
Treynor
Sharp

24. FINDINGS
Analysis of SYSTMATIC INVESTMENT PLAN show high
return from HDFC Growth Fund (G) is 50,117.52, low
return from Sahara Growth Fund (G) is 45,110.50.
Performance analysis of mutual fund show high
average return from Sahara Growth Fund (G) is
69.86345, low average return from Reliance Growth
Fund (G) is 8.006968.
Calculation of Standard Deviation show high risk is
156.7574 from Sahara Growth Fund (G) , low risk is
8.118373 from Reliance Growth Fund (G)

25. Calculation of Funds Returns vs.
Benchmark Returns show high performance
from Tata Growth Fund (G) is Greater than the
Bench Mark i.e.2.249>1, Low performance
from Reliance Growth fund - Retail plane (G)
is Less than the Bench Mark i.e. 1>-0.333.
Calculation of Treynor Ratio show High
Treynor ratio of Sahara Growth Fund (G) is
28.872, and low Treynor ratio of Reliance
Growth Fund (G) is 2.982.
Calculation of Sharp Ratio show High
Sharpe ratio of Sahara Growth Fund (G) is
0.3882, and Negative Sharpe ratio of
Reliance Growth Fund (G) is -0.1223

26. SUGGESTIONS
The SIP performance of HDFC Growth Fund (G) is high
so it is good to invest.
Investor on SIP need to know about changes between
price and units.
Performance of sip and selected fund not same in
some funds so investor need to consider all required
things.

27. CONCLUSION
Regular investment in sip can develop discipline in
investor’s savings, and it provides riskless return.
High risk provide high return and less risk provide less
return, so to find good fund investor need to consider
standard deviation, beta and Treynor & Sharpe ratio
values.

28. Thanks to
Internal Guide
Dr. C. VISWANATHA REDDY,
Associate professor, SVIM
External Guide
S. V. Krishna Rao,
State Head, Investment Products
Mahindra Finance