Harsha project

STUDY ON PERFORMANCE OF SELECTED MUTUAL FUND SCHEMES

A Dissertation Report on
‘A STUDY ON PERFORMANCE
OF SELECTED MUTUAL FUND SCHEMES.’
Submitted
In partial fulfillment of the requirement
of award of

Master of Business Administration

Submitted By
B.N. HARSHA
Reg No: 08KXCM6065

Under the guidance of
Mrs. Poornima.S

Bangalore University

SURANA COLLEGE CENTRE FOR POST GRADUATE STUDIES
#17, Kengeri Satellite Town
Bangalore-60

Surana College P.G Centre -1- Harsha .B.N


Declaration

I BN. Harsha bearing Reg No 08KXCM6065 do hereby declare that
the Project entitled „A Study on the Performance Analysis of Selected
Mutual Funds‟ is an original work carried out by me under the
guidance of Mrs. Poornima.S and has not been presented earlier for
any other University for the award of degree in “Master of Business
Administration” of Bangalore University.

Place: Bangalore B.N HARSHA
Date: (08KXCM6065)



ACKNOWLEDGEMENT

The successful accomplishment of any task is incomplete without
acknowledging the contributing personalities who both assisted and inspired
and lead us to way of success.

I thank our Director Dr. V. Prabhu Dev for giving us an opportunity to undertake
the dissertation in our area of interest and discover our true potential while
undertaking this project.

My sincere thanks to Mrs. Poornima.S, my guide for this project to whom I am
deeply grateful and highly indebted for the constant support and guidance
without which it would not have been possible for me to complete this project.

I would also like to thank Mr. Manavzhagan for contributing a lot of insights and
providing me constant support.
Last but not the least I thank my dearest PARENTS, FRIENDS for their
continued support.

I would also like to thank all those who contributed to this project in any manner.

Place: Bangalore B.N. HARSHA
Date:



EXECUTIVE SUMMARY

This project is about studying and analyzing the performance of a few selected mutual fund
schemes. Today an investor is interested in tracking the value of his investments, whether
invested directly in the market or indirectly through Mutual Funds. This dynamic change has
taken place because of a number of reasons. With globalization and the growing competition
in the investments opportunity available he would have to make guided and rational decisions
on whether he gets an acceptable return on his investments in the funds selected by him, or if
he needs to switch to another fund.

In order to achieve such an end the investor has to understand the basis of appropriate
preference measurement for the fund, and acquire the basic knowledge of the different
measures of evaluating the performance of the fund. Only then would he be in a position to
judge correctly whether his fund is performing well or not, and make the right decision.

The main objective of this study is to analyze the performance of the mutual fund schemes in
terms of risk and return. The report deals with a comparative study of ten selected balanced
mutual fund schemes of different AMC‟s. The study is based on data collected for a period of
one year.

The funds have also been ranked according to the three different performance measures
which are Sharpe‟s Ratio, Tenor‟s Ratio and Jensen‟s Measure.
Reliance Regular Savings Balanced Fund has outperformed all the other funds, as it has
yielded the highest return.
Birla Sun Life 95 Fund has the lowest risk among all the selected funds, as it has the lowest
Beta among all the funds.
Franklin Templeton India Balanced Fund has delivered more consistent returns, as it has the
lowest Standard Deviation.
In terms of size UTI Balanced Fund is the largest fund, as it has Net Assets of Rs. 1057.19
crore, which is the highest among all the selected funds.
Comparing the overall performance of all the selected mutual fund schemes, HDFC Balanced
Fund has been the best mutual fund scheme, as it has the best ranking as per both Sharpe &
Treynor and also the second ranking according to Jensen‟s measure.



Table of Contents

Sl. NO Particulars Page Number

1 Introduction 01-17

2 Research Design 18-25

3 Industry Profile & Company Profile 26-56

4 Data Analysis & Interpretation 57-69

5 Findings, Conclusions & Suggestions 70-72

6 Bibliography 73

Annexure 74-83



List of Tables

1 Showing Returns of the Funds 57

2 Showing Beta of the Funds 59

3 Showing Standard Deviation of the Funds 61

4 Showing Sharpe‟s Ratio of the Funds 63

5 Showing Treynor‟s Ratio of the Funds 65

6 Showing Jensen‟s Measure of the Funds 67



List of Graphs

1 Showing Growth in AUM 07

2 Showing Returns of the Funds 58

3 Showing Beta of the Funds 60

4 Showing Standard Deviation of the Funds 62

5 Showing Sharpe‟s Ratio of the Funds 64

6 Showing Treynor‟s Ratio of the Funds 66

7 Showing Jensen‟s Measure of the Funds 68



CHAPTER-1

INTRODUCTION



CHAPTER-1

INTRODUCTION

Investment refers to the process of commitment of funds with the objective of earning
additional income or capital appreciation or both.
Savings form an important part of the economy of any nation. With savings invested in
various options available to the people, the money acts as the driver for growth of the
country. Indian financial scene too presents multiple avenues to he investors. Though
certainly not the best or deepest of markets in the world, it has ignited the growth rate in
mutual fund industry to provide reasonable options for an ordinary man to invest his savings.
Investment goals vary from person to person. While somebody wants security, others might
give more weightage to returns alone. Somebody else might want to plan for his child‟s
education while somebody might be saving for life after retirement. With objectives defying
any range, it is obvious that the products required will vary as well. Today an investor has a
lot of investment alternatives to choose from in the market such as shares, debentures, mutual
funds, Government securities etc.
The investor has to make a wise choice keeping in mind various factors such as objective of
investment, risk associated with the investment, tax benefits, liquidity, marketability etc.
But it is not an easy task for the investor to identify the right avenue for investment due to
many investment constraints such as lack of resources and time to conduct research etc.
Mutual Fund is a trust that pools the savings of a number of investors who share a common
financial goal. The money thus collected is then invested in capital market instruments such
as shares, debentures and other securities according to the fund‟s objectives. The income
earned through these investments and the capital appreciations realized are shared by its unit
holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most
suitable investment for the common man as it offers an opportunity to invest in a diversified,
professionally managed basket of securities at a relatively low cost.

The one investment vehicle that has truly come of age in India in the past decade is mutual
funds. Today, the mutual fund industry in the country manages around Rs 7, 81,583.84 crore
(As of Feb, 2010) of assets, a large part of which comes from retail investors. And this
amount is invested not just in equities, but also in the entire gamut of debt instruments.



Mutual funds have emerged as a proxy for investing in avenues that are out of reach of most
retail investors, particularly government securities and money market instruments.
Specialization is the order of the day, be it with regard to a scheme‟s investment objective or
its targeted investment universe. Given the plethora of options on hand and the hard-sell
adopted by mutual funds vying for a piece of your savings, finding the right scheme can
sometimes seem a bit daunting. Mind you, it‟s not just about going with the fund that gives
you the highest returns. It‟s also about managing risk–finding funds that suit your risk
appetite and investment needs.

Concept of a Mutual Fund

The securities and exchange board of India regulations.1993 defines a mutual fund as “a fund
established in the form of a trust by a sponsor, to raise monies by the trustees through the sale
of units to the public, under one or more schemes, for investing in securities in accordance
with these regulations”.
A Mutual Fund is a trust that pools the savings of a number of investors who share a common
financial goal. The money thus collected is then invested in capital market instruments such
as shares, debentures and other securities. The income earned through these investments and
the capital appreciation realized is shared by its unit holders in proportion to the number of
units owned by them. Thus a Mutual Fund is the most suitable investment for the common
man as it offers an opportunity to invest in a diversified, professionally managed basket of
securities at a relatively low cost.
The flow chart below describes broadly the working of a mutual fund:-



A Mutual Fund is a body corporate registered with the Securities and Exchange Board of
India (SEBI) that pools up the money from individual/corporate investors and invests the
same on behalf of the investors/unit holders, in Equity shares, Government securities,
Bonds, Call Money Markets etc, and distributes the profits. In the other words, a Mutual
Fund allows investors to indirectly take a position in a basket of assets.

Mutual Fund is a mechanism for pooling the resources by issuing units to the investors and
investing funds in securities in accordance with objectives as disclosed in offer document.
Investments in securities are spread among a wide cross-section of industries and sectors
thus the risk is reduced. Diversification reduces the risk because all stocks may not move in
the same direction in the same proportion at same time. Investors of mutual funds are
known as unit holders.

The investors in proportion to their investments share the profits or losses. The mutual
funds normally come out with a number of schemes with different investment objectives
which are launched from time to time. A Mutual Fund is required to be registered with
Securities Exchange Board of India (SEBI) which regulates securities markets before it can
collect funds from the public.

Investors earn from a Mutual Fund in three ways:
1. Income is earned from dividends declared by mutual fund schemes from time to time.
2. If the fund sells securities that have increased in price, the fund has a capital gain.
This is reflected in the price of each unit. When investors sell these units at prices
higher than their purchase price, they stand to make a gain.
3. If fund holdings increase in price but are not sold by the fund manager, the fund's unit
price increases, the mutual fund units can be sold for a profit. This is amounts to a
valuation gain.

Though still at a nascent stage, Indian MF industry offers a plethora of schemes and serves
broadly all type of investors. The range of products includes equity funds, debt, liquid, gilt
and balanced funds. There are also funds meant exclusively for young and old, small and
large investors. Moreover, the setup of a legal structure, which has enough teeth to safeguard
investors‟ interest, ensures that the investors are not cheated out of their hard-earned money.



All in all, benefits provided by them cut across the boundaries of investor category and thus
create for them, a universal appeal.
Investors of all categories could choose to invest on their own in multiple options but opt for
mutual funds for the sole reason that all benefits come in a package.

History of Mutual Funds in India

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

First Phase – 1964-87:

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

Second Phase – 1987-1993 (Entry of Public Sector Funds):

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



Third Phase – 1993-2003 (Entry of Private Sector Funds):

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year
in which the first Mutual Fund Regulations came into being, under which all mutual funds,
except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged
with Franklin Templeton) was the first private sector mutual fund registered in July 1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and
revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI
(Mutual Fund) Regulations 1996.
The number of mutual fund houses went on increasing, with many foreign mutual funds
setting up funds in India and also the industry has witnessed several mergers and acquisitions.
As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805
crores. The Unit Trust of India with Rs.44,541 crores of assets under management was way
ahead of other mutual funds.

Fourth Phase – Since February 2003:

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was
bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of
India with assets under management of Rs.29,835 crores as at the end of January 2003,
representing broadly, the assets of US 64 scheme, assured return and certain other schemes.
The Specified Undertaking of Unit Trust of India, functioning under an administrator and
under the rules framed by Government of India and does not come under the purview of the
Mutual Fund Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation
of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under
management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual
Fund Regulations, and with recent mergers taking place among different private sector funds,
the mutual fund industry has entered its current phase of consolidation and growth. As at the
end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores
under 421 schemes.



Fifth Phase – 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 33funds as at the end of March 2010. This is a continuing phase of growth of the
industry through consolidation and entry of new international and private sector players.

Graph-1: Showing Growth in AUM.



Organization of a Mutual Fund
A mutual fund is set up in the form of a trust, which has sponsor, trustees, asset Management
Company (AMC) and custodian.
The sponsor of a mutual fund is like the promoter of a company. The sponsor may be a bank,
a financial institution, or a financial service company. The sponsor is responsible for setting
up and establishing the mutual fund.
The trust is established by a sponsor or more than one sponsor who is like promoter of a
company. The trustees of the mutual fund hold its property for the benefit of the unit holders.
Asset Management Company (AMC) approved by SEBI manages the funds by making
investments in various types of securities.
Custodian, who is registered with SEBI, holds the securities of various schemes of the fund
in its custody. The trustees are vested with the general power of superintendence and
direction over AMC. They monitor the performance and compliance of SEBI Regulations by
the mutual fund.
SEBI Regulations require that at least two thirds of the directors of trustee company or board
of trustees must be independent i.e. they should not be associated with the sponsors.
Also, 50% of the directors of AMC must be independent. All mutual funds are required to be
registered with SEBI before they launch any scheme.



Association of Mutual Funds in India (AMFI)
With the increase in mutual fund players in India, a need for mutual fund association in India
was generated to function as a non-profit organization. Association of Mutual Funds in India
(AMFI) was incorporated on 22nd August, 1995.AMFI is an apex body of all Asset
Management Companies (AMC) which has been registered with SEBI. Till date all the
AMCs are that have launched mutual fund schemes are its members. It functions under the
supervision and guidelines of its Board of Directors.
The Association of Mutual Funds of India works with 30 registered AMCs of the country.
Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a
professional and healthy market with ethical lines enhancing and maintaining standards. It
follows the principle of both protecting and promoting the interests of mutual funds as well as
their unit holders.

The objectives of Association of Mutual Funds in India are as follows:-
 To define and maintain high professional and ethical standards in all areas of
operation of mutual fund industry
 To recommend and promote best business practices and code of conduct to be
followed by members and others engaged in the activities of mutual fund and asset
management including agencies connected or involved in the field of capital markets
and financial services.
 To interact with the Securities and Exchange Board of India (SEBI) and to represent
to SEBI on all matters concerning the mutual fund industry.
 To represent./t to the Government, Reserve Bank of India and other bodies on all
matters relating to the Mutual Fund Industry.
 To develop a cadre of well trained Agent distributors and to implement a programme
of training and certification for all intermediaries and other engaged in the industry.
 To undertake nationwide investor awareness programme so as to promote proper
understanding of the concept and working of mutual funds.
 To disseminate information on Mutual Fund Industry and to undertake studies and
research directly and/or in association with other bodies.
 At last but not the least association of mutual fund of India also disseminate
information on Mutual Fund Industry and undertakes studies and research either
directly or in association with other bodies.



The members of AMFI:

Bank Sponsored
 SBI Fund Management Ltd.
 BOB Asset Management Co. Ltd.
 Canbank Investment Management Services Ltd.
 UTI Asset Management Company Pvt. Ltd.

Institutions -
 Jeevan Bima Sahayog Asset Management Co. Ltd.

Private Sector: -
Indian -
 Benchmark Asset Management Co. Pvt. Ltd.
 Cholamandalam Asset Management Co. Ltd.
 Credit Capital Asset Management Co. Ltd.
 Escorts Asset Management Ltd.
 JM Financial Mutual Fund
 Kotak Mahindra Asset Management Co. Ltd.
 Reliance Capital Asset Management Ltd.
 Sahara Asset Management Co. Pvt. Ltd
 Sundaram Asset Management Company Ltd.
 Tata Asset Management Private Ltd.
 Predominantly India Joint Ventures:-
 Birla Sun Life Asset Management Co. Ltd.
 DSP Merrill Lynch Fund Managers Limited
 HDFC Asset Management Company Ltd.

Predominantly Foreign Joint Ventures:-

 ABN AMRO Asset Management (I) Ltd.
 Alliance Capital Asset Management (India) Pvt. Ltd.



 Deutsche Asset Management (India) Pvt. Ltd.
 Fidelity Fund Management Private Limited
 Franklin Templeton Asset Mgmt. (India) Pvt. Ltd.
 HSBC Asset Management (India) Private Ltd.
 ING Investment Management (India) Pvt. Ltd.
 Morgan Stanley Investment Management Pvt. Ltd.
 Principal Asset Management Co. Pvt. Ltd.
 Prudential ICICI Asset Management Co. Ltd.
 Standard Chartered Asset Mgmt Co. Pvt. Ltd.



Advantages of Mutual Funds:

1. Professional Management: Mutual Funds provide the services of experienced and
skilled professionals, backed by a dedicated investment research team that analyses
the performance and prospects of companies and selects suitable investments to
achieve the objectives of the scheme.
2. Diversification: Mutual Funds invest in a number of companies across a broad cross-
section of industries and sectors. This diversification reduces the risk because seldom
do all stocks decline at the same time and in the same proportion. You achieve this
diversification through a Mutual Fund with far less money than you can do on your
own.
3. Convenient Administration: Investing in a Mutual Fund reduces paperwork and
helps you avoid many problems such as bad deliveries, delayed payments and follow
up with brokers and companies. Mutual Funds save your time and make investing
easy and convenient.
4. Return Potential: Over a medium to long-term, Mutual Funds have the potential to
provide a higher return as they invest in a diversified basket of selected securities.
5. Low Costs: Mutual Funds are a relatively less expensive way to invest compared to
directly investing in the capital markets because the benefits of scale in brokerage,
custodial and other fees translate into lower costs for investors.
6. Liquidity: In open-end schemes, the investor gets the money back promptly at net
asset Value related prices from the Mutual Fund. In closed-end schemes, the units can
be sold on a stock exchange at the prevailing market price or the investor can avail of
the facility of direct repurchase at NAV related prices by the Mutual Fund.
7. Transparency: You get regular information on the value of your investment in
addition to disclosure on the specific investments made by your scheme, the
proportion invested in each class of assets and the fund manager's investment strategy
and outlook.
8. Flexibility: Through features such as regular investment plans, regular withdrawal
plans and dividend reinvestment plans, you can systematically invest or withdraw
funds according to your needs and convenience.



9. Affordability: Investors individually may lack sufficient funds to invest in high-grade
stocks. A mutual fund because of its large corpus allows even a small investor to take
the benefit of its investment strategy.
10. Well Regulated: All Mutual Funds are registered with SEBI and they function within
the provisions of strict regulations designed to protect the interests of investors. The
operations of Mutual Funds are regularly monitored by SEBI.

Drawbacks of Mutual Funds:
1. No Guarantees: The return of any mutual fund scheme is not assured as the
investment or the corpus of the fund is invested in the capital market which may or
may not generate returns. No investment is risk free, if the entire stock market
declines in value, the value of mutual fund shares will go down as well, no matter
how balanced the portfolio is but investors encounter fewer risks when they invest in
mutual funds than when they buy and sell stocks on their own.
2. No Customized Portfolios: The portfolio of securities in which a fund invests is a
decision taken by the fund manager. Investors have no right to interfere in the
decision making process of a fund manager, which some investors find as a constraint
in achieving their financial objectives.
3. Fees and commissions: All funds charge administrative fees to cover their day-to-
day expenses. Some funds also charge sales commissions or "loads" to compensate
brokers, financial consultants, or financial planners. Even if an investor doesn't uses a
broker or other financial adviser, he will pay a sales commission if he buys shares in a
Load Fund.
4. Taxes: During a typical year, most actively managed mutual funds sell anywhere
from 20 to 70 percent of the securities in their portfolios. If a fund makes a profit on
its sales, the investor will pay taxes on the income he receives, even if he reinvests the
money he made.
5. Management risk: When an investor invests in a mutual fund, he depends on the
fund's manager to make the right decisions regarding the fund's portfolio. If the
manager does not perform as well as he had hoped, he might not make as much
money on his investment as he had expected. Of course, if the investor invests in the
Index Funds, he foregoes management risk, because these funds do not employ
managers.



Different types of mutual fund schemes:

TYPES OF MUTUAL
FUNDS

BY INVESTMENT
BY STRUCTURE BY NATURE OTHER SCHEMES
OBJECTIVE

Open - Ended Tax Saving
Equity Fund Growth Schemes
Schemes Schemes

Close - Ended
Debt Funds Income Schemes Index Schemes
Schemes

Sector Specific
Interval Schemes Balanced Funds Balanced Schemes
Schemes

Money Market
Schemes

 By Structure-

1. Open-end Funds: An open-end fund is one that is available for subscription all
through the year. These funds do not have a fixed maturity and investors can
conveniently buy and sell its units at Net Asset Value ("NAV") related prices. The
key feature of open-end schemes is its liquidity.

2. Closed-end Funds: A closed-end fund has a stipulated maturity period which
generally ranging from 3 to 15 years. The fund is open for subscription only during a
specified period and investors can invest in the scheme only at the time of the initial
public issue and thereafter they can buy or sell the units of the scheme on the stock
exchanges where they are listed. In order to provide an exit route to the investors,
some close-ended funds give an option of selling back the units to the Mutual Fund
through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at
least one of the two exit routes is provided to the investor.



3. Interval Funds: Interval funds combine the features of open-ended and close-ended
schemes. They are open for sale or redemption during pre-determined intervals at
NAV related prices.

 By Investment Objective

1. Growth/Equity Oriented Funds: The aim of growth funds is to provide capital
appreciation over a period of time usually medium to long term. Such schemes
normally invest a majority of their corpus in equities. It has been proved that returns
from stocks, have outperformed most other kind of investments held over the long
term. Growth schemes are ideal for investors having a long term outlook seeking
growth over a period of time.

2. Income/ Debt oriented Funds: The aim of income funds is to provide regular and
steady income to investors. Such schemes generally invest in fixed income securities
such as bonds, corporate debentures and Government securities. Income Funds are
ideal for capital stability and regular income.

3. Balanced Funds: The aim of balanced funds is to provide both growth and regular
income. Such schemes periodically distribute a part of their earning and invest both in
equities and fixed income securities in the proportion indicated in their offer
documents. In a rising stock market, the NAV of these schemes may not normally
keep pace, or fall equally when the market falls. These are ideal for investors looking
for a combination of income and moderate growth.

4. Money Market/Liquid Funds: The aim of money market funds is to provide easy
liquidity, preservation of capital and moderate income. These schemes generally
invest in safer short-term instruments such as treasury bills, certificates of deposit,
commercial paper and inter-bank call money. Returns on these schemes may fluctuate
depending upon the interest rates prevailing in the market. These are ideal for
Corporate and individual investors as a means to park their surplus funds for short
periods.



 Other Schemes

1. Tax Saving Schemes: These schemes offer tax rebates to the investors under specific
provisions of the Indian Income Tax laws as the Government offers tax incentives for
investment in specified avenues. Investments made in Equity Linked Savings
Schemes (ELSS) and Pension Schemes are allowed as deduction u/s 88 of the Income
Tax Act, 1961. The Act also provides opportunities to investors to save capital gains
u/s 54EA and 54EB by investing in Mutual Funds.

2. Industry Specific Schemes: Industry Specific Schemes invest only in the industries
specified in the offer document. The investment of these funds is limited to specific
industries like InfoTech, FMCG, Pharmaceuticals, etc…

3. Index Funds: The corpus of the Index Fund is invested in the index stocks and it
attempt to replicate the performance of a particular index such as the BSE Sensex or
the NSE Nifty.

4. Gilt Funds: These funds invest exclusively in Government securities. Government
securities have no default risk. NAV‟s of these funds also fluctuate due to interest
rate changes and other economic factors as is the case with income or debt oriented
schemes.

5. Sectoral Funds: Sectoral Funds are those which invest exclusively in a specified
sector. This could be an industry or a group of industries or various segments such as
'A' Group shares or initial public offerings.

6. Load Funds:
A Load Fund is one that charges a commission for entry or exit. That is, each time
you buy or sell units in the fund, a commission will be payable. Typically entry and
exit loads range from 1% to 2%. It could be worth paying the load, if the fund has a
good performance history.



7. No-Load Funds:
A No-Load Fund is one that does not charge a commission for entry or exit. That is,
no commission is payable on purchase or sale of units in the fund. The advantage of a
no load fund is that the entire corpus is put to work.

8. Exchange Traded Funds (ETF) :
Exchange Traded Funds provide investors with combined benefits of a closed-end and
an open-end mutual fund. Exchange Traded Funds follow stock market indices and
are traded on stock exchanges like a single stock at index linked prices. The biggest
advantage offered by these funds is that they offer diversification, flexibility of
holding a single share (tradable at index linked prices) at the same time. Recently
introduced in India, these funds are quite popular abroad.

9. Fund of Funds :
Mutual funds that do not invest in financial or physical assets, but do invest in other
mutual fund schemes offered by different AMCs, are known as Fund of Funds. Fund
of Funds provide investors with an added advantage of diversifying into different
mutual fund schemes with even a small amount of investment, which further helps in
diversification of risks.



RISKS ASSOCIATED WITH MUTUAL FUNDS:-

Investing in Mutual Funds, as with any security, does not come without risk. One of the most
basic economic principles is that risk and reward are directly correlated. In other words, the
greater the potential risk the greater the potential return. The types of risk commonly
associated with Mutual Funds are:

1) MARKET RISK- Market risk relates to the market value of a security in the future.
Market prices fluctuate and are susceptible to economic and financial trends, supply
and demand, and many other factors that cannot be precisely predicted or controlled.

2) POLITICAL RISK- Changes in the tax laws, trade regulations, administered prices,
etc are some of the many political factors that create market risk. Although
collectively, as citizens, we have indirect control through the power of our vote
individually, as investors, we have virtually no control.

3) INFLATION RISK- Interest rate risk relates to future changes in interest rates. For
instance, if an investor invests in a long-term debt Mutual Fund scheme and interest
rates increase, the NAV of the scheme will fall because the scheme will be end up
holding debt offering lower interest rates.

4) BUSINESS RISK- Business risk is the uncertainty concerning the future existence,
stability, and profitability of the issuer of the security. Business risk is inherent in all
business ventures. The future financial stability of a company cannot be predicted or
guaranteed, nor can the price of its securities. Adverse changes in business
circumstances will reduce the market price of the company‟s equity resulting in
proportionate fall in the NAV of the Mutual Fund scheme, which has invested in the
equity of such a company.

5) ECONOMIC RISK- Economic risk involves uncertainty in the economy, which, in
turn, can have an adverse effect on a company‟s business. For instance, if monsoons
fail in a year, equity stocks of agriculture-based companies will fall and NAVs of
Mutual Funds, which have invested in such stocks, will fall proportionately.



CHAPTER-2

RESEARCH
DESIGN



CHAPTER-2

RESEARCH DESIGN

Background of the Study:

A Mutual Fund is a trust that pools the savings of a number of investors who share a common
financial goal. The money thus collected is invested by the fund manager in different types of
securities depending upon the objective of the scheme. These could range from shares to
debentures to money market instruments. The income earned through these investments and
the capital appreciation realized by the scheme are shared by its unit holders in proportion to
the number of units owned by them. Thus a Mutual Fund is the most suitable investment for
the common man as it offers an opportunity to invest in a diversified, professionally managed
portfolio at a relatively low cost. Each Mutual Fund scheme has a defined investment
objective and strategy.
This study is therefore aimed at comparing the performance of selected mutual fund schemes.

Statement of the Problem:

There are various investment avenues available to an investor today. The stock market is
volatile and therefore selecting the right & profitable investment is a real challenge to the
investor. A mutual fund diversifies the risk associated with the investments. But selecting the
right mutual fund is a real challenge as each fund has a specific objective.
Therefore this study aims at identifying the right mutual fund schemes for investment with
regard to returns & performance.

Objectives of the Study:

 To understand the working & management of a Mutual Fund.
 To understand the calculation of Net- Asset Values of mutual funds.
 To evaluate investment performance of mutual funds in terms of risk and return.
 To get an insight knowledge about mutual funds.



SCOPE OF THE STUDY:

Even today investing in mutual funds is a little difficult for laymen. Today in India there are
more than 800 mutual fund schemes. This is sufficed to baffle the investor. Researches have
shown that funds picked are those that advertise heavily and sell aggressively.
Studies have proved that an investor who analyses and make sense of his investment needs
and making the movements according to it could enable the investor to win the game. Hence,
a thorough understanding of the functionalities and the factors which contributes to the return
will help the investor to make more sensible movements rather, to be just cajoled by the
advertisements and selling spree.
Here lies the need of this study, to provide a solid understanding about the different factors
governing the return. For easy understanding and to provide more easy explanation a case of
five randomly chosen AMCs are done.

Hypothesis-

H0: Investment in Mutual Funds is beneficial and profitable.

Sampling Design:

The samples consist of 10 mutual funds schemes selected, five schemes from public sector
and five schemes from private sector mutual funds which have a history of more than five
years.
The list of mutual fund schemes selected for the study is given below:

1. Birla Sun Life 95- Growth
2. HDFC Balanced Fund- Growth
3. Reliance Regular Savings Balanced- Growth
4. Franklin Templeton Balanced Fund- Growth
5. Tata Balanced Fund- Growth
6. UTI Balanced Fund- Growth
7. SBI Magnum Balanced Fund- Growth
8. Canara Robeco Balance fund- Growth
9. LIC Balanced-Plan C Growth- Growth
10. Baroda Pioneer Balance Fund- Growth



Sampling Method:

Convenient Random Sampling is used for collecting the samples.
Convenience sampling is used in exploratory research where the samples are collected at the
convenience of the researcher. This non probability method is often used during preliminary
research efforts to get a gross estimate of the results, without incurring the cost or time
required to select a random sample.

Sources of Data:

 Primary Data

Primary data refers to the data that has been collected for the first time for a research.
Primary data has been collected from the respective fund house‟s websites and also
from the scheme brochures.

 Secondary Data

Secondary data is the data that have been already collected by and readily available
from other sources.
The secondary data has been collected from various websites, magazines, books etc.

Chapter Scheme:

Chapter-1: Introduction
Chapter-2: Research Design
Chapter-3: Industry and Company Profile
Chapter-4: Data Analysis and Interpretation
Chapter-5: Findings, Suggestions and Conclusions.

Limitations of the Study:

 The study is restricted to secondary data only.
 Different tools used for analysis may suggest different results as the approach differs.
 The study considers data for only a limited period of time.
 The study is based only on selected 10 schemes therefore limiting the area of
research.



Tools for analysis:

The following are some of the tools that will be used to analyse the performance of the

selected mutual fund schemes.

1. Beta:

It measures the systematic risk and shows how prices of securities respond to the market
forces. It is calculated by relating the return on a security with return for the market. By
convention, market will have beta 1.0 Mutual fund is said to be volatile, more volatile or less
volatile. If beta is greater than 1 the stock is said to be riskier than market. If beta is less than
1, the indication is that stock is less risky in comparison to market. If beta is zero then the
risk is the same as that of the market. Negative beta is rare.

Beta is calculated as:
Covariance (Kj, Km)
β = ------------------------------------
Variance (Km)
where,
Kj is the returns on the portfolio or stock - DEPENDENT VARIABLE
Km is the market returns or index - INDEPENDENT VARIABLE
Variance is the square of standard deviation

2. Standard deviation:

It is used to measure the variation in individual returns from the average expected return over
a certain period. Standard deviation is used in the concept of risk of a portfolio of
investments; higher standard deviation means a greater fluctuation in expected return.

² = ∑ (x-x') ²

√ N-1
Where
² : Variance of Return
 : Standard Deviation of Return
X : Return for the stock in period
x' : Arithmetic Return
N : Number of periods



3. Sharpe index:
Sharpe index was given by WF Sharpe in 1966, it measures risk premium of a portfolio,
relative to the total amount for risk in the portfolio. Sharpe index summarizes the risk and
return of a portfolio in a single measure that categorizes the performance of funds on the risk-
adjusted basis. The larger the Sharpe Index, the portfolio over performance the market and
vice versa.
Portfolio Average Return (Rp) – Risk Free Rate of Interest (Rt)
Sharpe Index =

Standard Deviations of the Portfolio Return

4. Treynor’s Index :
It was given by Jack Treynor in 1965, it is expressed as a ratio of returns to systematic risk
i.e., beta. It adjusts return based on systematic risk, therefore it is relevant for performance
measurement when evaluating portfolios separately or in combination with other portfolios.

Portfolio Average Return (Rp)-Risk Free Rate of Interest (Rt)
Treynor Index =
Beta Coefficient of Portfolio

5. Jensen Measures:
It is a regression of excess fund return with excess market return given by MC Jensen in
1968. It is also popularly known as Jensen‟s alpha based on Capital Asset Pricing Model
(CAPM). It reflects the difference between the return actually earned on a portfolio and the
return the fund was expected to earn, given its beta as per the CAPM.

Ri = Rp-[Rf + Bp (Rm - Rf)]
Rm = Return on the market portfolio.
Rp = Portfolio‟s actual return during a specified time period
Rf = Risk-free rate of return during the same period
Bp = beta of the portfolio



Calculation of Net Asset Value

NAV or Net Asset Value of the fund is the cumulative market value of the assets of the
scheme minus its liabilities. The NAV per unit is the net asset value of the scheme divided by
the number of units outstanding on the Valuation Date.

The value of all the securities in the portfolio in calculated daily. From this, all expenses
are deducted and the resultant value divided by the number of units in the fund is the
fund‟s NAV.

The Formula for NAV is as follows,

NAV= Market value of the Fund‟s Investments+ Receivables
+Accrued Income –Liabilities – Accrued Expenses
Number of Outstanding Units



Terms Used:

1. Net Asset Value (NAV) – Net Asset Value is the market value of the assets of the
scheme minus its liabilities. The per unit NAV is the net asset value of the scheme
divided by the number of units outstanding on the Valuation Date.

2. Load – A charge that is levied as a percentage of NAV at the time of entry into the
Scheme/Plans or at the time of exiting from the Scheme/Plans. It is usually levied to
meet the costs involved in managing the funds operations.

3. Entry Load – Entry Load is the load or charge imposed when an investor purchases
mutual fund units.

4. Exit Load – Exit Load is the load imposed when an investor redeems or sells the
units.

5. Sale Price – Sale price is the price an investor pays when investing in a scheme.
Also called Offer Price. It may include a sales load.

6. Repurchase Price – Is the price at which a close-ended scheme repurchases its
units and it may include a back-end load. This is also called Bid Price.

7. Redemption Price – It is the price at which open-ended schemes repurchase their
units and close-ended schemes redeem their units on maturity. Such prices are NAV
related.

8. Asset under management (AUM) – The total market value of the assets owned
by a mutual fund. The asset level depends on the market valuation and the money held
by the mutual fund.



9. Fund Manager – They are highly skilled professionals who are appointed by the
Asset Management Company (AMC) in order to effectively manage the investments
of the mutual fund.

10.Corpus – Corpus refers to the total amount of funds available to a fund manager for
investment purpose.

11. Expense Ratio – It is the percentage of fund's value that is paid as expenses.
Expenses include management fees and all the other fees associated with the fund's
daily operations.

12. Total Return – Return on an investment, taking into account capital appreciation,
dividends or interest, and individual tax considerations adjusted for present value and
expressed on an annual basis.

13. Turnover Rate – A measure of the fund's trading activity calculated by dividing
total purchases or sales of portfolio securities (whichever is lower) by the fund's net
assets over a period of time.

14. Record Date – The date the fund determines who its shareholders are; "shareholders
of record" who will receive the fund's income dividend and/or net capital gains
distribution. Frequently the business day immediately prior to the Ex-Dividend Date.

15.Reinvestment Option – A service that most mutual funds offer whereby a unit
holder's dividends and capital gains distributions are automatically reinvested in
additional units.



CHAPTER-3

INDUSTRY
PROFILE



CHAPTER-3

INDUSTRY AND COMPANY PROFILE

The Indian mutual fund industry has evolved from single player in 1964 to a fast growing,
competitive market on the back of a strong regulatory framework.
The Indian mutual fund industry currently consists of 38 players offering close to 1000
schemes with total Assets under Management (AUM) of Rs. 7,81,583.84 crore.
The Assets under Management (AUM) have grown at a rapid pace over the past few years, at
a CAGR of 35 % for the five-year period from 2005 to 2009. Over the 10-year period from
1999 to 2009 encompassing varied economic cycles, the industry grew at 22 % CAGR.
The industry has witnessed a shift has changed drastically in favour of private sector players,
as the number of public sector players reduced from 11 in 2001 to 5 in 2009.
India has been amongst the fastest growing markets for mutual funds since 2004; in the five-
year period from 2004 to 2008 (as of Dec) the Indian mutual fund industry grew at 29 %
CAGR as against the global average of 4 percent.
The Indian mutual fund industry is in a relatively nascent stage in terms of its product
offerings, and tends to compete with Government securities. As of Dec 2008, the total
number of mutual fund schemes was 1,002 in comparison to 10,349 funds in the US.

However, despite clocking growth rates that are amongst the highest in the world, the Indian
mutual fund industry continues to be a very small market; comprising 0.32 % share of the
global AUM of USD 18.97 trillion as of December 2008.
The increase in revenue and profitability in the Indian mutual fund industry has not been
commensurate with the AUM growth in the last 5 years. The AUM grew at 35 % CAGR in
the period from 2005 to 2009, while the profitability of AMCs declined from 24 % in FY
2004 to 14 % in FY 2008.

The public sector has gradually ceded market share to the private sector. Public sector mutual
funds comprised 21 percent of the AUM in 2009 as against 72 percent AUM share in 2001.
While the mutual fund industry in India continues to be metro and urban centric, the mutual
funds are beginning to tap Tier 2 and Tier 3 towns as a vital component of their growth
strategy.



BIRLA SUN LIFE MUTUAL FUND

Birla Sun Life Asset Management Company Ltd. (BSLAMC), the investment managers of
Birla Sun Life Mutual Fund, 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.
Established in 1994, Birla Sun Life Mutual fund has emerged as one of India's leading
flagships of Mutual Funds business managing assets of a large investor base. Our solutions
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.

Vision:
To be a leader and role model in a broad based and integrated financial services business.

Birla Sun Life Asset Management Company has 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.
Birla Sun Life Asset Management Company follows a long-term, fundamental research based
approach to investment. The approach is to identify companies, which have excellent growth
prospects and strong fundamentals. The fundamentals include the quality of the company‟s
management, sustainability of its business model and its competitive position, amongst other
factors.
The fund has more than 224 schemes with AUM of Rs.49983.17 Crs



Birla Sun Life 95-Growth

Fund Objective:
The fund seeks to achieve long-term capital appreciation and current income from a balanced
portfolio with a target allocation of 60% equity, 40% debt and money market securities.

Fund Manager: Nishit Dholakia

Fund Profile Asset Allocation

Latest NAV 277.09 (31/03/10)
As on 28/02/10 % Net Assets
52-Week High 277.1 (29/03/10)

52-Week Low 157.67 (01/04/09) Equity 66.09

Hybrid: Equity-
Fund Category
oriented
Debt 4.74
Type Open End

Launch Date February 1995
Others 29.16
Risk Grade Average

Return Grade Above Average
Net Assets (Cr) 253.85
28/02/10)

Returns Sector Allocation

As on 01 Apr 2010 Fund Category Top 5 Sectors % Net Asset
Year to Date 3.72 2.40 As on 28/02/2010
1-Month 5.80 5.14 Financial 13.70
3-Month 3.72 2.40
Services 7.90
1-Year 77.26 62.65
Diversified 7.62
3-Year 17.44 11.22
FMCG 6.03
5-Year 22.28 17.15
Return Since Metals 5.54
24.94 --
Launch



Portfolio Top Holdings

Company Sector Mkt. Value* (Rs in Crores) % of Assets
Equity Shares 64.07
RALLI INDIA Pesticides 87.46 03.45
TRENT Retailing 78.64 03.10
ICICI BANK Banks 72.52 02.86
INFOSYS TECH I T – Software 63.64 02.51
AXIS BANK Banks 61.64 02.43
RELIANCE Petroleum Products 53.59 02.11
H D F C BANK Banks 50.04 01.97
ALLAHABAD BK Banks 48.68 01.92
NESTLE LTD Consumer Non 38.49 01.52
Durables
HIND. ZINC Non-Ferrous 38.40 01.51
Metals
CROMPTON GR. Industrial Capital 37.41 01.47
Goods
LUPIN LTD Pharmaceuticals 36.64 01.44
TO POWER AEC Power 35.92 01.42
H C L TECH I T – Software 35.96 01.42
I T C LTD Consumer Non 35.20 01.39
Durables
WIPRO LTD. I T – Software 34.43 01.36
Debt

Company Name Instrument Mkt Value % of Assets
(Rs. in crores)
Industrial Development Bond 7.30 2.88
Bank of India Ltd
7.02 GOI Securities 4.73 1.87



HDFC MUTUAL FUND

HDFC Asset Management Company Limited (AMC) was incorporated under the Companies
Act, 1956, on December 10, 1999, and was approved to act as an Asset Management
Company for the Mutual Fund by SEBI on 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.

Vision:
To be a dominant player in the Indian mutual fund space, recognized for its high levels of
ethical and professional conduct and commitment towards enhancing investors interests.

The paid up capital of the AMC is Rs. 25.161 crore. HDFC was incorporated in 1977 as the
first specialised Mortgage Company in India. HDFC provides financial assistance to
individuals, corporate and developers for the purchase or construction of residential housing.
It also provides property related services (e.g. property identification, sales services and
valuation), training and consultancy. Of these activities, housing finance remains the
dominant activity.
HDFC Asset Management Company (AMC) is the first AMC in India to have been assigned
the „CRISIL Fund House Level – 1‟ rating. This is its highest Fund Governance and Process
Quality Rating which reflects the highest governance levels and fund management practices
at HDFC AMC. It is the only fund house to have been assigned this rating for third year in
succession.

The fund has more than 182 schemes with AUM of Rs. 95,144.40 crs.



HDFC Balanced Fund- Growth

Fund Objective:
The scheme seeks to generate capital appreciation with current income from a combined
portfolio of equity and debt instruments. Under normal circumstances the scheme would take
60 % exposure to equity instruments while the balance would be allocated to debt
instruments.
Fund Manager: Chirag Setalvad
Fund Profile
47.549 Asset Allocation
Latest NAV
(01/04/10)
47.549 As on 28/02/10
52-Week High
(18/01/10) % Net Assets
26.692
52-Week Low
(02/04/09)
Equity 66.23
Hybrid: Equity-
Fund Category
oriented
Type Open End
Debt 23.03
Launch Date August 2000

Risk Grade Below Average Others 10.74
(31/03/10)


As on
FundCategory Top 5 Sectors % Net Asset
01 Apr 2010
Year to Date 5.67 2.40 As on 28/02/2010
1-Month 5.48 5.14
Health Care 11.34
3-Month 5.67 2.40
1-Year 81.78 62.65 Engineering 9.32
3-Year 17.67 11.22 Technology 7.84
5-Year 18.59 17.15
Financial 7.47
Return Since
17.54 --
Launch Automobile 6.94




Company Name Instrument Sector Value % of Corpus
(Rs in cr.)
Tata Motors (Guranteed by SBI) Structured
Others 15.29 10.61
Obligation
Coromandel Fertilisers Equity Chemicals 5.18 5.18
Tata Consultancy Services Equity Technology 4.23 4.23
Balkrishna Inds. Equity Automobile 3.94 3.94
Crompton Greaves Equity Engineering 3.78 3.78
Infosys Technologies Equity Technology 3.61 3.61
HDFC Debenture Financial 5.00 3.47
Sun Pharmaceutical Inds. Equity Health Care 3.20 3.2
Ipca Laboratories Equity Health Care 3.04 3.04
Motherson Sumi Systems Equity Automobile 3.00 3.0
Dabur India Equity FMCG 2.94 2.94
Biocon Equity Health Care 2.92 2.92
BHEL Equity Engineering 2.85 2.85
Bank of Baroda Equity Financial 2.83 2.83
Larsen & Toubro Equity Diversified 2.80 2.8
Shriram Transport Finance Structured
Financial 3.94 2.74
Obligation
Federal Bank Equity Financial 2.69 2.69
Grasim Industries Structured
Diversified 3.58 2.48
Obligation
KEC International Equity Engineering 2.39 2.39
Sadbhav Engineering Equity Construction 2.24 2.24
Reliance Industries Equity Energy 2.17 2.17
BPCL Equity Energy 2.01 2.01
Axis Bank Equity Financial 1.95 1.95
State Bank of India Debenture Financial 2.68 1.86
V S T Industries Equity FMCG 1.63 1.63
Blue Star Equity Cons Durable 1.60 1.6
Bajaj Auto Structured
Automobile 2.20 1.53
Obligation
Aarti Industries Equity Chemicals 1.30 1.3
Divi's Laboratories Equity Health Care 1.14 1.14
Lupin Equity Health Care 1.04 1.04
M M Forgings Equity Metals 0.88 0.88
Bharti Airtel Equity Communication 0.87 0.87
Reliance Industries Structured
Energy 0.50 0.34
Obligation
Cash, Cash Equivalents and Net Cash/Net
Others 15.46 10.74
Current Assets Current Assets



RELIANCE MUTUAL FUND

Reliance Mutual Fund (RMF) was established as trust under Indian Trusts Act, 1882. The
sponsor of RMF is Reliance Capital Limited and Reliance Capital Trustee Co. Limited is the
Trustee. It was registered on June 30, 1995 as Reliance Capital Mutual Fund which was
changed on March 11, 2004. Reliance Mutual Fund was formed for launching of various
schemes under which units are issued to the Public with a view to contribute to the capital
market and to provide investors the opportunities to make investments in diversified
securities.

Vision:
To be a globally respected wealth creator with an emphasis on customer care and a culture of
good corporate governance.

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 118 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 balance paid up capital
being held by minority shareholders."

The fund has more than 235 schemes with AUM of Rs.112565.11 Crs



Reliance Regular Savings Balanced- Growth

Fund Objective:
The scheme aims to generate consistent returns by investing a major portion in equity and a
small portion in debt and money market instruments. It will invest upto 50 per cent of its
assets in equities and quity related securities and atleast 25 per cent of its assets in debt and
money market instruments with an average maturity of 1 to 7 years.
Fund Manager: Arpit Malaviya

20.9241
Latest NAV
(05/04/10) As on 28/02/10
20.9241 % Net Assets
52-Week High
(05/04/10)
11.5041 Equity 66.35
52-Week Low
(06/04/09)
Hybrid: Equity-
Fund Category
oriented
Debt 0
Type Open End

Launch Date May 2005
Others 33.65
Risk Grade Average

Return Grade High
(31/03/10)


As on 01 Apr 2010 Fund Category
Top 5 Sectors % Net Asset
Year to Date 8.09 3.48
1-Month 4.96 3.36 As on 28/02/2010
1-Year 85.54 60.38
Services 9.62
3-Year 23.92 11.95
5-Year -- 17.45 Technology 9.22
Return Since
16.24 -- Construction 6.26
Launch
Automobile 5.8




Company Mkt. Value* (Rs in Crores) % of Assets

Equity Shares 66.35

POWER FINAN 143.92 5.26

INFINITE 100.89 3.69

MAN INFRA 90.00 3.29

HEROHONDA M 88.88 3.25

AVENTIS PHAR 80.75 2.95

JUBL FOOD 80.41 2.94

INFRA DEVFIN 79.80 2.92

STERLITE (I) 78.20 2.86

INFOSYS TECH 78.06 2.85

UNION BANK 76.73 2.80

H C L TECH 73.42 2.68

TATA MOTORS 71.12 2.60

UNITD SPR 67.71 2.48

CIPLA LTD. 63.23 2.31

REL COM LTD 63.02 2.30

Debt and Cash and Other Assets
33.65

Debt and Cash and Other Assets 920.68 33.65



FRANKLIN TEMPLETON MUTUAL FUND

Templeton Asset Management Company, a company incorporated under the Companies Act,
1956, is a part of the Franklin Templeton Group. The sponsor of the Fund Templeton
International Inc., is a wholly owned subsidiary of Templeton Worldwide Inc., which in turn
is a wholly owned subsidiary of Franklin Resources Inc. The Franklin Templeton Group is
one of the world s largest Investment Management Companies. It has over 50 years of
experience in International Investment Management with 34 offices in over 23 countries,
which service over 10 million unit holders.

It flagged off the mutual fund business with the launch of Templeton India Growth Fund in
September 1996, and since then the business has grown at a steady pace.

Vision:

To be the premier global investment management organization by offering high quality
investment solutions, providing outstanding service and attracting, motivating and retaining
talented individuals.

The fund has more than 181 schemes with AUM of Rs. 33,300 Crs



Franklin Templeton India Balanced-G

Fund Objective:
The scheme seeks to achieve long-term capital appreciation with stability of investment and
current income from a balanced portfolio of high quality equity and fixed income securities.

Fund Manager: Sachin Padwal Desai

45.9694
Latest NAV
(06/04/10) As on 28/02/10 % Net Assets
45.9694
52-Week High
(06/04/10)
30.5341 Equity 68.35
52-Week Low
(06/04/09)
Hybrid: Equity-
Fund Category
oriented
Debt 29.53
Type Open End

Launch Date December 1999
Others 2.12
Risk Grade Average

Return Grade Average
(31/03/10)


As on 28/02/2010
1-Month 3.42 3.46
3-Year 13.08 11.98
Technology 7.98
5-Year 18.83 17.40
Return Since Energy 6.12
15.91 --
Launch
Diversified 5.97




Value Asset
Equity Sector
(Rs cr) %

Infosys Technology 21.82 7.33

Kotak Mahindra Banking/Finance 14.57 4.89

HDFC Bank Banking/Finance 12.29 4.13

Reliance Oil & Gas 11.03 3.70

ICICI Bank Banking/Finance 10.50 3.53

Axis Bank Banking/Finance 9.68 3.25

Larsen Engineering 9.63 3.23

Nestle Food & Beverage 9.50 3.19

HDFC Banking/Finance 9.45 3.17

Bharti Airtel Telecom 9.18 3.08

Hero Honda Motors Automobile 8.78 2.95

Grasim Industries Diversified 8.14 2.73

Cummins India Engineering 7.54 2.53

Bharat Heavy Electricals Engineering 7.41 2.49

Marico FMCG 5.84 1.96

Debt

ONGC Videsh Energy 24.80 8.33

Tata Motors Automobile 21.10 7.08

Rural Electrification Corporation Energy 9.87 3.31



TATA MUTUAL FUND

Tata Mutual Fund (TMF) is a Trust under the Indian Trust Act, 1882. The sponsorers for Tata
Mutual Fund are Tata Sons Ltd., and Tata Investment Corporation Ltd. The investment
manager is Tata Asset Management Limited and its Tata Trustee Company Pvt. Limited.

Backed by one of the most trusted and valued brands in India, Tata Mutual Fund has earned
the trust of lakhs of investors with its consistent performance and world-class service.

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.

The fund has more than 174 schemes with AUM of Rs. Rs. 22,620 Crs.



Tata Balanced Fund-Growth

Fund Objective:
The scheme seeks steady returns from debt along with growth from equities instruments.
Earlier known as Tata Equity Growth Fund, Tata Twin Balanced has been merged in to this
fund.
Fund Manager: M Venugopal

77.0742
Latest NAV
(06/04/10)
77.1787
52-Week High As on 28/02/10 % Net Assets
(05/04/10)
44.3254
52-Week Low
(06/04/09) Equity 73.56
Hybrid: Equity-
Fund Category
oriented
Type Open End
Debt 18.92
Launch Date October 1995

Risk Grade Average Others 7.52

(31/03/10)


As on 28/02/2010
1-Month 2.50 3.46
3-Month 1.12 2.05 Technology 17.00
1-Year 73.88 59.39 Diversified 8.83
3-Year 16.92 11.98
FMCG 8.44
5-Year 21.06 17.40
Return Since Services 8.41
17.60 -
Launch
Financial 7.72




Value Asset
Equity Sector
(Rs cr) %

Lupin Pharmaceuticals 11.16 4.23

Mphasis Technology 10.28 3.90

Oracle Technology 9.31 3.53

United Spirits Food & Beverage 8.73 3.31


Crompton Greave Engineering 8.02 3.04

Rural Electrification Energy 7.81 2.96

Wipro Technology 7.55 2.86

Cadila Health Care Pharmaceuticals 7.24 2.75

Reliance Industries Energy 7.04 2.67

HDFC Bank Financial 6.56 2.49

L I C Housing Fin. Financial 5.97 2.27

H C L Technologies Technology 5.88 2.23

Nestle India FMCG 5.85 2.22

Zee Entertainment Ent. Services 5.82 2.21

Debt Holdings

Export-Import Bank Financial 15.15 5.75

State Bank of Bikaner Financial 14.88 5.64

IDBI Bank Financial 9.93 3.77



UTI MUTUAL FUND

UTI Mutual Fund is managed by UTI Asset Management Company Private Limited which
was established on Jan 14, 2003. It has been appointed by the UTI Trustee Company Private
Limited for managing the schemes of UTI Mutual Fund and the schemes transferred from
UTI Mutual Fund.

Vision:

To be the most Preferred Mutual Fund.

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. The fund managers are ably supported by a strong in-house securities
research department. To ensure investors‟ interests, a risk management department is also in
operation.

UTI Mutual Fund‟s investment philosophy is to deliver consistent and stable returns in the
medium to long term with a fairly lower volatility of fund returns compared to the broad
market. It believes in having a balanced and well-diversified portfolio for all the funds and a
rigorous in-house research based approach to all its investments. It is committed to adopt
and maintain good fund management practices and a process based investment management.

UTI Mutual Fund follows an investment approach of giving as equal an importance to asset
allocation and sectoral allocation, as is given to security selection while managing any fund.
It combines top-down and bottom-up approaches to enable the portfolios/funds to adapt to
different market conditions so as to prevent missing an investment opportunity.




UTI Balanced Fund –Growth

Fund Objective:
An open-ended balanced fund investing between 40% to 75% in equity/equity related
securities and the balance in debt (fixed income securities) with a view to generate regular
income together with capital appreciation.

Fund Manager: Amandeep Singh Chopra

Latest NAV 75.68 (07/04/10) As on 28/02/10 % Net Assets

52-Week High 75.68 (07/04/10)
Equity 73.24
52-Week Low 47.31 (08/04/09)
Hybrid: Equity-
Fund Category
oriented Debt 24.79
Type Open End

Launch Date March 1995 Others 1.97

Risk Grade Average

Return Grade Average
Net Assets (Cr) 1,057.19
(31/03/10)


Year to Date 4.01 18.19 As on 28/02/2010
1-Month 4.36 2.87 Energy 13.13
3-Month 2.17 3.83
3-Year 13.33 59.37 Financial 8.98
5-Year 16.01 12.12
Technology 8.39
Return Since
18.42 --
Launch Diversified 7.72




Value Asset
Equity Sector
(Rs cr) %



BHEL Engineering 30.54 2.98

TCS Technology 28.13 2.75

Larsen Engineering 27.66 2.70

NTPC Utilities 25.28 2.47

SBI Finance 23.69 2.32

Axis Bank Finance 23.26 2.27

HDFC Finance 23.06 2.25

Siemens Telecom 22.92 2.24

Bharat Electronics Engineering 18.40 1.80

ONGC Energy 16.98 1.66

Grasim Industries Diversified 16.17 1.58

Tata Tea FMCG 15.92 1.56

ITC FMCG 15.73 1.54

Debt Holdings

Emaar MGF Land & Pvt. Realty 76.46 7.47

GOI Sovereign 58.34 5.70

UCO Bank Finance 20.0 1.95



SBI MUTUAL FUND

SBI Mutual Fund is India‟s largest bank sponsored mutual fund and has an enviable track
record in judicious investments and consistent wealth creation.
SBI Mutual Fund is a joint venture between the State Bank of India and Société Générale
Asset Management, one of the world‟s leading fund management companies that
manages over US$ 500 Billion worldwide.

Vision:

Growth through innovation and stable investment policies.

A total of over 5.8 million investors have reposed their faith in the wealth generation
expertise of the Mutual Fund.
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, patronised by over
80% of the top corporate houses of the country.
Schemes of the Mutual fund have consistently outperformed benchmark indices and have
emerged as the preferred investment for millions of investors and HNI‟s.
SBI Mutual is the first bank-sponsored fund to launch an offshore fund – Resurgent India
Opportunities Fund.




SBI Magnum Balanced Fund-Growth

Fund Objective:
Earlier known as Magnum open-end, the scheme seeks capital appreciation from a balanced
portfolio of equity and debt securities.

Fund Manager: Ritesh Sheth


As on 28/02/10 % Net Assets
49.41
Latest NAV
(07/04/10)
49.41 Equity 75.19
52-Week High
07/04/10)
30.86
52-Week Low
08/04/09)
Hybrid:Equity- Debt 14.86
Fund Category
oriented
Type Open End
Others 9.95
Launch Date October 1995

Risk Grade Above Average

(31/03/10)

Top 5 Sectors % Net Asset

As on 07 Apr 2010 Fund Category As on 28/02/2010
Year to Date 3.52 3.96 Financial 12.20
1-Month 4.59 3.84
Energy 9.79
3-Month 2.04 2.53
3-Year 13.81 12.12
Services 6.89
5-Year 21.31 17.51
Return Since Construction 6.28
18.51 --
Launch




Holdings Sector Value (Rs cr) Asset %

Equity 72.46


ICICI Bank Banking/Finance 17.87 3.62

BHEL Engineering 16.64 3.37


Bharti Airtel Telecom 13.87 2.81

SBI Banking/Finance 12.84 2.60

ITC Tobacco 11.80 2.39

Cipla Pharmaceuticals 9.46 1.92

Bharat Elec Manufacturing 9.18 1.86

Sobha Developers Realty 8.75 1.77

Sadbhav Engineering Realty 8.72 1.77

HDFC Financial 7.50 1.52

Sintex Industries Diversified 7.13 1.44

ONGC Energy 6.72 1.36

Indian Hotels Services 6.71 1.36

Debt & other holdings 27.54

GOI Sovereign 85.60 17.33

Rural Electrification Energy 19.78 4.00

Power Finance Corp Services 5.70 1.15


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