A
Report on
“Construct an optimal portfolio using different parameters of mutual fund”
Submitted to
SAL INSTITUTE OF MANAG...
Introduction. . .
Preface:
• Finance & its functions are the part of economic activity. Finance is very essentially needed...
Contd…
• Master of business administrator is professional course which develop a new body of
knowledge & skill set & make ...
Introduction . . .
• Mutual fund is a buzz in the market these days. The mutual fund industry is burgeoning, it is
complet...
History of Mutual Fund. . .
• 1963: UTI is India’s first mutual fund.
• 1964: UTI launches US-64.
• 1971: UTI’s ULIP (Unit...
Contd . . .
• 1993: Private sector and foreign players allowed; Kothari Pioneer first private fund house to
start operatio...
Contd . . .
• 2000: The industry’s assets under management crosses Rs 1, 00,000 crore.
• 2001: US-64 scam leads to UTI ove...
Organisation of Mutual Fund
Contd. . .
• A mutual fund is set up in the form of a trust, which has sponsor, trustees,
• asset management company (AMC)...
Types of Mutual Fund. . .
• By Structure:
• Open-ended Funds:
An open-end fund is one that is available for subscription a...
By investment objective. . .
• Growth Funds:
The aim of growth funds is to provide capital appreciation over the medium to...
Contd. . .
• Balanced Fund:
The aim of balanced funds is to provide both growth and regular income. Such schemes
periodica...
Other Scheme. . .
• Tax Saving Schemes:
These schemes offer tax rebates to the investors under specific provisions of the ...
Research Methodology. . .
Need of the study:
• The need of the study aimed to know that how people can construct and maint...
Scope of the project. . .
Scope of the project:
• Indian stock exchange like BSE, NSE include large number of securities. ...
Limitation of project. . .
• The project is limited to the extent of information available.
• Dividend incomes are not con...
Proposed methodology. . .
• Types of data: Secondary data.
• Sampling unit: Mutual fund.
• Period of study: 3 years
• Tool...
Terminologies. . .
• TERMINOLOGY:
ALPHA
• The alpha ratio illustrates the effect of the portfolio manager’s choice on the ...
Data Analysis. . .
1 year 3year
scheme name alpha beta Sharp ratio alpha beta sharp ratio
axis equity fund-gr 0.78 0.73 0....
ing dividend yield fund-gr 0.14 0.93 0.05 0.29 0.86 0.03
ing large cap equity fund-gr 0.07 0.92 0.03 0.03 0.98 -0.03
ing m...
Five different funds. . .
Scheme Kotak 50 (G)
Fund Class Large Cap
Fund Type Open-Ended
Ranking Rank 3
Scheme Asset
Rs in ...
Scheme SBI Blue Chip Fund (G)
Fund Class Large Cap
Fund Type Open-Ended
Ranking Rank 2
Scheme Asset
Rs in cr
716.96
Jun-30...
Scheme Kotak Balance
Fund Class Balanced
Fund Type Open-Ended
Ranking Rank 3
Scheme Asset
Rs in cr
101.21
Jun-30-2013
Ince...
Upcoming SlideShare
Loading in …5
×

Mutual fund for your portfolio

464 views

Published on

we have research on 5 different type of mutual fund in indai market

0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
464
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
0
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide

Mutual fund for your portfolio

  1. 1. A Report on “Construct an optimal portfolio using different parameters of mutual fund” Submitted to SAL INSTITUTE OF MANAGEMENT Under the guidance of Prof. Chinmay Gandhi Submitted By Hardik Thakar-(En.no.128070592162) Tirth Kaushal- (En.no.128070592050) Batch: 2012-14
  2. 2. Introduction. . . Preface: • Finance & its functions are the part of economic activity. Finance is very essentially needed for all types of organizations i.e. small, medium, large-scale industries & service sector. Hence the role of finance manager & the subject finance accounting gained maximum importance. Liberalization, globalization & privatization created new challengers to entrepreneur & corporate in carrying they’re day to day activities. So, “finance is regarded as the life blood of a business organization.”
  3. 3. Contd… • Master of business administrator is professional course which develop a new body of knowledge & skill set & make as available for those seeking challenging carriers in the of liberalization & globalization. • The purpose behind writing a report is to put in to works the practical training that is imparted into me that gives a better and a clear understanding of the experience I got. • “Construct an optimal portfolio using different parameters of mutual fund” • Being a very important aspect of mutual fund, I have tried to explore many areas of this aspect in my project report.
  4. 4. Introduction . . . • Mutual fund is a buzz in the market these days. The mutual fund industry is burgeoning, it is completely untapped market. Only 5% of total potential of this industry has been grabbed. Hence this industry has a lot of opportunities in it. That’s why it is so much interactive. • As Indian economy is growing at the rate of 5.6% per annum, we can see its effect in all areas. The Indian stock market and companies have become lucrative for foreign investors. More and more fund is pouring in our country. This is increasing liquidity in the market and hence increasing the money in the hands of people and thus investment. As the future prospects for Indian companies are bright, they have lots of opportunities to expand their business worldwide, the investment in Indian companies.
  5. 5. History of Mutual Fund. . . • 1963: UTI is India’s first mutual fund. • 1964: UTI launches US-64. • 1971: UTI’s ULIP (Unit-Linked Insurance Plan) is second scheme to be Launched. • 1986: UTI Master share, India’s first true ‘mutual fund’ scheme, launched. • 1987: PSU banks and insurers allowed floating mutual funds; State Bank of India (SBI) first off the blocks. • 1992: The Harshad Mehta-fuelled bull market arouses middle-class interest in shares and mutual funds.
  6. 6. Contd . . . • 1993: Private sector and foreign players allowed; Kothari Pioneer first private fund house to start operations; SEBI set up to regulate industry. • 1994: Morgan Stanley is the first foreign player. • 1996: Sebi’s mutual fund rules and regulations, which forms the basis of most current laws, come into force. • 1998: UTI Master Index Fund is the country’s first index fund. • 1999: The takeover of 20th Century AMC by Zurich Mutual Fund is the first acquisition in the mutual fund.
  7. 7. Contd . . . • 2000: The industry’s assets under management crosses Rs 1, 00,000 crore. • 2001: US-64 scam leads to UTI overhaul. • 2002: UTI bifurcated, comes under SEBI purview; mutual fund distributors banned from giving commissions to investors; floating rate funds and Foreign debt funds debut. • 2003: AMFI certification made compulsory for new agents; fund of funds launched. • 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.
  8. 8. Organisation of Mutual Fund
  9. 9. Contd. . . • A mutual fund is set up in the form of a trust, which has sponsor, trustees, • asset management company (AMC) and custodian. 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.
  10. 10. Types of Mutual Fund. . . • By Structure: • Open-ended Funds: An open-end fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value ("NAV") related prices. The key feature of open-end schemes is liquidity. • Closed ended 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. Investors can invest in the scheme 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.
  11. 11. By investment objective. . . • Growth Funds: The aim of growth funds is to provide capital appreciation over the 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. • Income 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.
  12. 12. Contd. . . • Balanced Fund: 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.
  13. 13. Other Scheme. . . • 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. • 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, and Pharmaceuticals etc.
  14. 14. Research Methodology. . . Need of the study: • The need of the study aimed to know that how people can construct and maintain their portfolio by keeping stable and less risky investment in their portfolio. • A study was also conducted to measure the performance of various funds on the basis of various performance measuring ratios such as Sharpe ratio, beta, alpha. • The study was basically undertaken to understand the financial needs of the customer and to provide or suggest them products and services according to their financial needs. • This study was undertaken to find out the funds which can make portfolio strong by keeping less risk.
  15. 15. Scope of the project. . . Scope of the project: • Indian stock exchange like BSE, NSE include large number of securities. All these securities are important at its place, but it is very difficult and lengthy task to study all this securities at time.so, in this study only few securities from different sectors listed on BSE and are taken as sample. This sample is selected on base of return they had given in past. All securities which are representing the population of different sectors are taken into consideration in this study. In portfolio management, only few securities are selected which gives higher return to increase the return on investment and minimize risk.
  16. 16. Limitation of project. . . • The project is limited to the extent of information available. • Dividend incomes are not considered. • The study is purely academic interest. • All the calculation could not be brought into the report.
  17. 17. Proposed methodology. . . • Types of data: Secondary data. • Sampling unit: Mutual fund. • Period of study: 3 years • Tools and techniques: Different parameters of mutual fund.
  18. 18. Terminologies. . . • TERMINOLOGY: ALPHA • The alpha ratio illustrates the effect of the portfolio manager’s choice on the fund's return. The greater the alpha, the better a return has the investment yielded compared with other investment objects with the same market risk. Alpha is an annualized return measure of how much better or worse a fund’s performance is relative to an index of funds in the same category, after allowing for differences in risk. BETA • A ratio that measures the market risk of securities or a fund. If the beta ratio exceeds one, the fund is more sensitive than funds in general to the fluctuations of the stock market. The beta may also be negative, which means that the value of the fund will, on average, move to the opposite direction than the general market development.
  19. 19. Data Analysis. . . 1 year 3year scheme name alpha beta Sharp ratio alpha beta sharp ratio axis equity fund-gr 0.78 0.73 0.23 0.11 0.89 -0.01 axis long term equity fund-gr 0.56 0.72 0.17 0.46 0.83 0.06 birla sun life equity fund-gr 0.1 1.03 0.1 -0.19 1.08 -0.07 birla sun life frontline eqity fund-gr 0.64 0.95 0.16 0.19 0.96 0 birla sun life top 100-gr 0.36 0.97 0.09 0.23 0.98 0.01 bnp paribas dividend yield fund-gr 0.2 0.87 0.06 0.38 0.84 0.04 bnp paribas equity fund-gr 0.32 0.76 0.1 0.2 0.81 0.01 bnp paribas midcap fund-gr 0.59 0.99 0.14 0.6 1.01 0.07 dsp blackrock opportunities fund-gr 0.08 1 0.03 0.03 0.96 -0.03 dsp black rock top 100 equity fund-gr -0.23 0.96 -0.04 0.06 0.93 -0.02 franklin india blue chip fund-gr -0.04 0.83 0 0.12 0.86 -0.01 franklin india high growth companies fund-gr 0.62 0.91 0.15 0.11 1.04 -0.02 franklin india opportunities fund-gr -0.26 0.98 -0.04 -0.17 0.98 -0.07 hdfc capital builder-gr 0.1 0.81 0.04 0.15 0.9 -0.01 hdfc equity fund-gr -0.15 1.13 -0.01 0.2 1.06 0 hdfc growth fund-gr -0.32 1.01 -0.05 0.21 0.98 0 hdfc longterm advantage fund-gr 0.18 0.83 0.06 0.28 0.98 0.02 hdfc midcap opportunity fund-gr 0.01 0.95 0.02 0.55 1.01 0.06 hdfc top 200 fund-gr -0.09 1.11 0 0.19 1.05 0 icici prudential discovery fund-gr 0.36 0.92 0.09 41 0.99 0.04 icici prudential focoused bluechip equity fund 0.18 0.81 0.06 0.34 0.9 0.03 icici prudential midcap fund-gr 0.43 0.87 -0.09 -0.26 1.1 -0.08 icici prudential top 100 fund-gr 0.01 0.82 0.01 0.18 0.93 0 icici prudential top 200 fund-gr 0.04 0.96 0.02 0.06 1.09 -0.03 idfc premier equity fund-gr 0.09 0.82 0.04 0.04 0.99 -0.03 idfc sterling equity fund-gr 0.21 0.88 0.06 0.37 1.02 0.03
  20. 20. ing dividend yield fund-gr 0.14 0.93 0.05 0.29 0.86 0.03 ing large cap equity fund-gr 0.07 0.92 0.03 0.03 0.98 -0.03 ing midcap fund-gr -0.44 1.21 -0.06 0.03 1.06 -0.03 jp morgan india smaller companies fund-gr 0.35 0.86 0.1 0.35 0.98 0.03 jp morgan india tax advantage fund-gr -0.11 0.95 0.3 0.02 0.91 0.4 kotak classic equity fund-gr 0.33 0.73 0.11 0.07 0.93 0.02 kotak classic equity fund-gr 0.33 0.73 0.11 0.07 0.93 0.2 kotak emrging equity scheme-gr 0.01 1.06 0.01 0.06 1.07 0.02 kotak 50-gr 0.25 0.81 0.08 0.01 0.85 0.03 l&t india special situation fund-gr 0.35 0.88 0.1 0.26 0.94 0.01 relaince equity opportunities fund-gr 0.53 0.92 0.14 0.57 1.08 0.06 reliance top 200 fund-gr 0.21 0.91 0.06 0.18 1.05 0.01 sbi magnum bluechip fund-gr 0.88 0.81 0.25 0.08 0.87 0.2 sbi magnum equity fund-gr 0.19 0.74 0.07 0.13 0.83 0.01 sbi magnum midcap fund-gr 0.6 1.03 0.13 0.13 1.03 0.01 sundram rural india fund-gr 0.1 1.02 0.03 0.13 1.01 0.02 tata equity opportunity fund-gr 0.09 0.75 0.04 -0.12 0.93 0.06 tata pure equity fund 0.16 0.77 0.06 0.04 0.86 0.03 tata dividend yield fund-gr 0.25 0.83 0.05 0.33 0.85 0.03 uti equity fund-gr 0.28 0.84 0.06 0.27 0.9 0.02 uti masterplus unit scheme-gr 0.17 0.89 0.06 0.12 0.95 0.01 uti opportunities fund-gr -0.09 0.8 -0.01 0.3 0.83 0.13
  21. 21. Five different funds. . . Scheme Kotak 50 (G) Fund Class Large Cap Fund Type Open-Ended Ranking Rank 3 Scheme Asset Rs in cr 719.67 Jun-30-2013 Inception Date 22-Dec-98 Last Dividend Rs/Units 1 Benchmark S&P CNX Nifty Minimum Investment(Rs.) 5000 AMC/Fund Family Kotak Mahindra Asset Mgmt Co. Ltd. AMC Asset Rs in cr 37,202.99 Jun-30-2013 Latest NAV Rs/Units 108.86900 Jul-24-2013 52 week high 115.7 19 jun 12 52 week low 94.820 May 26, 12 3 Months 2.50% 6 Months 5.40% 1 Year 13.60% 2 Years 2.30% 3 Years 2.80% 5 Years 7.00% Top 5 holdings ICICI Bank, Reliance, HDFC Bank, ITC, Bharti Airtel Scheme ICICI Pru Services Indus. (G) Fund Class Diversified Equity Fund Type Open-Ended Ranking Rank 2 Scheme Asset Rs in cr 140.81 Jun-30-2013 Inception Date 18-Nov-05 Last Dividend Rs/Units N.A Benchmark BSE 200 Minimum Investment(Rs.) 5000 AMC/Fund Family ICICI Prudential Asset Mgmt.Co. Ltd AMC Asset Rs in cr 91,694.87 Jun-30-2013 Latest NAV Rs/Units 21.72000 Jul-24-2013 52 week high 29.1 16 Jan 12 52 week low 15.900 Jul 26, 12 3 Months 14.40% 6 Months 10.20% 1 Year 35.20% 2 Years 11.20% 3 Years 8.10% 5 Years 9.10% Top 5 holdings Dr Reddys Labs, Cipla, Infosys, Lupin, TCS
  22. 22. Scheme SBI Blue Chip Fund (G) Fund Class Large Cap Fund Type Open-Ended Ranking Rank 2 Scheme Asset Rs in cr 716.96 Jun-30-2013 Inception Date 20-Jan-06 Last Dividend Rs/Units N.A Benchmark BSE 100 Minimum Investment(Rs.) 5000 AMC/Fund Family SBI Funds Management Private Limited AMC Asset Rs in cr 59,163.19 Jun-30-2013 Latest NAV Rs/Units 16.1818 Jul-26-2013 52 week high 17.431 May 16, 13 52 week low 13.780 Jul 26, 12 3 Months -3.10% 6 Months -4.90% 1 Year 16.50% 2 Years 6.50% 3 Years 3.60% 5 Years 8.30% Top 5 holdings ITC, HDFC Bank, Reliance, ICICI Bank, TCS Scheme HDFC Top 200 Fund (G) Fund Class Term Large Cap Fund Type Open-Ended Ranking Rank 3 Scheme Asset Rs in cr 11,206.84 Jun-30-2013 Inception Date 19-Aug-96 Last Dividend Rs/Units 2.5 Benchmark N.A Minimum Investment(Rs.) 5000 AMC/Fund Family HDFC Asset Management Co. Ltd. AMC Asset Rs in cr 104,976.79 Jun-30-2013 Latest NAV Rs/Units 209.90000 Jul-24-2013 52 week high 234.759 Jan 21, 13 52 week low 190.951 Jul 26, 12 3 Months -4.90% 6 Months -9.80% 1 Year 8.10% 2 Years -1.00% 3 Years 1.80% 5 Years 11.10% Top 5 holdings ICICI Bank, SBI, Infosys, ITC, Larsen
  23. 23. Scheme Kotak Balance Fund Class Balanced Fund Type Open-Ended Ranking Rank 3 Scheme Asset Rs in cr 101.21 Jun-30-2013 Inception Date 29-Nov-99 Last Dividend Rs/Units 4.7 Benchmark N.A Minimum Investment(Rs.) 5000 AMC/Fund Family Kotak Mahindra Asset Mgmt Co. Ltd. AMC Asset Rs in cr 37,202.99 Jun-30-2013 Latest NAV Rs/Units 18.41200 Jul-24-2013 52 week high 23.938 Jan 18, 13 52 week low 18.017 Jun 26, 13 3 Months -1.70% 6 Months -2.50% 1 Year 12.30% 2 Years 5.50% 3 Years 4.90% 5 Years 8.40% Top 5 holdings ITC, HUL, Infosys, HDFC Bank, Power Grid Corp

×