final report of mf

8/9/2019 Final Report of MF

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CHAPTER- 1

COMPANY PROFILE

AND

FUNCTIONAL ANALYSIS

OF THE COMPANY


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THE KOTAK GROUP

Kotak Mahindra Bank

Established in 1985, the Kotak Mahindra group has been one of India's most reputedfinancial company. In February 2003, Kotak Mahindra Finance Ltd, the group's flagshipcompany has got the license by the Reserve Bank of India (RBI) to carry bankingbusiness and Kotak Mahindra Finance Ltd. is the first non-banking finance company inIndia to convert itself in to a bank as Kotak Mahindra Bank Ltd. And today, it is one ofthe fastest growing bank and among the most admired financial institutions inIndia.Kotak Mahindra Bank has over 245 branches and a customer base of over 8 lakhs.Spread all over India, not just in the metros but in Tier II cities and rural India as well.

Kotak Mahindra Old Mutual Life Insurance Ltd

Kotak Mahindra Old Mutual Life Insurance Ltd is a joint venture between KotakMahindra Bank Ltd. and Old Mutual. The company offers its customers a wide range ofinnovative life insurance products, helping them in taking important financial decisions atevery stage in life and stays financially independent. The company is one of the fastestgrowing insurance companies in India and has shown remarkable growth since itsinception in 2001. Kotak Life Insurance employs around 5,565 people in its variousbusinesses and has 197 branches across 141 cities.

Kotak Securities Ltd

Kotak Securities Ltd. is one of Indias largest brokerage and securities distribution housein India. Over the years Kotak Securities has been one of the leading investment broking

houses catering to the needs of both institutional and non-institutional investor categories

with presence all over the country through franchisees and co-coordinators. Kotak

Securities Ltd. offers online and offline services based on well-researched expertise and

financial finance to dealers products to the non-institutional investors.

Kotak Mahindra Capital Company

Kotak Investment Banking (KMCC) is a full-service investment bank in India offering awide suite of capital market and advisory solutions to leading domestic and multinationalcorporations, banks, financial institutions and government companies. The kotakservices encompass Equity & Debt Capital Markets, M&A Advisory, Private EquityAdvisory, Restructuring and Recapitalization services, Structured Finance services andInfrastructure Advisory & Fund Mobilization.


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Kotak Mahindra Prime Ltd

Kotak Mahindra Prime limited (KMPL) is a subsidiary of Kotak Mahindra Bank Limitedprimarily formed to finance all passenger vehicles. KMPL is Indias Leading car finance

company. The company is dedicated to financing and supporting automotivemanufacturers, dealers and retail customers. The company offers financing in the form ofloans for the entire range of passenger cars, multi utility vehicles and pre-owned cars.The company also offers Inventory funding and infrastructure funding to car dealers.KMPL has a robust delivery platform, which is critical for sustained growth. KMPL hada retail distribution network comprising 56 branches (including representative offices) in15 states in the country and a wide network of Direct Marketing Associates, brokers andagencies supporting its distribution network.

Kotak Mahindra Asset Management Company Ltd

Kotak Mahindra Asset Management Company Ltd. a wholly owned subsidiary of KotakMahindra Bank Ltd. Kotak Mahindra Mutual Fund launched its Schemes in December1998 and today manages over Rs.13,635.83 Crore of assets from close to 4,34,622investors in various schemes.Kotak Mahindra Asset Management Company offers a complete bouquet of assetmanagement products and services that are designed to suit the diverse risk returnprofiles of each and every type of investor. KMAMC and Kotak Mahindra Bank are thesponsors of Kotak Mahindra Pension Fund Ltd, which has been appointed as one of sixfund managers to manage pension funds under the New Pension Scheme (NPS)..


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KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LTD

Corporate Office

Kotak Mahindra Old Mutual Life Insurance Ltd.Unit nos. 901 & 902, 9th floor,Wing A & B, Godrej Coliseum,Lokmanya Pan Bazar,Behind Evrard Nagar,Sion (E), Mumbai - 400 022Tel : +91 22 6621 5999Fax : +91 22 6621 5757, 6621 5858

Email : [email protected]: www.kotaklifeinsurance.com

Back Office

Kotak Mahindra Old Mutual Life Insurance Ltd.Kotak Infiniti, Building no. 21, Infinity Park,Off Western Express Highway,General A K Vaidya Marg,Malad (E), Mumbai 400 097

Toll Free No: 1800 209 8800Email : [email protected]: www.kotaklifeinsurance.com

Branch Office

KOTAK LIFE INSURANCEC-31, 1st and 2nd floor,Community center, Janakpuri (near janak cinema),

New Delhi -110058Contact person: Gurmeet SinghTel No: 9999477780, 011-66084945Website: www.kotaklifeinsurance.com


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Headquarters: Mumbai, India

Industry: Insurance

Specialties: Life Insurance

Type: Privately Held

Status: Operating Subsidiary

Founded: 2001 (Entered in Insurance Sector)

Kotak Mahindra Old Mutual Life Insurance is a 74:26 ratio joint venture between Kotak

Mahindra Bank Ltd. and Old Mutual plc. Kotak Mahindra Old Mutual Life Insurance is

one of the fastest growing insurance companies in India and has shown remarkablegrowth since its inception in 2001.

Kotak Mahindra Old Mutual Life Insurance is the coming together of Kotak Mahindra

Finance Ltd., and Old Mutual plc to enter the Indian insurance arena to offer a wide range

of innovative life insurance products. Established in 1985, as Kotak Capital Management

Finance promoted by Uday Kotak, the company has come a long way since its entry into

corporate finance. It has dabbled in leasing, auto finance, hire purchase, investment

banking, consumer finance, broking etc. The company got its name Kotak Mahindra as

industrialists Harish Mahindra and Anand Mahindra picked a stake in the company.

Kotak Mahindra is today one of Indias leading Financial Institutions.

Old Mutual plc is an international financial services group based in London with

expanding operations in life assurance, asset management, banking and general

insurance. Old Mutual is listed on the London Stock Exchange (where it is included on

the FTSE 100 Index) and also on the South African, Namibian, Malawi and Zimbabwe

stock exchanges, with assets under management worth $ 400 Billion as on 30th June,

2006. For customers, this joint venture translates into a company that combines

international expertise with the understanding of the local market.


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INTRODUCTION OF INSURANCE SECTOR IN INDIA

The Insurance sector in India governed by Insurance Act, 1938, the Life InsuranceCorporation Act, 1956 and General Insurance Business (Nationalisation) Act, 1972,Insurance Regulatory and Development Authority (IRDA) Act, 1999 and other related

Acts. With such a large population and the untapped market area of this populationInsurance happens to be a very big opportunity in India. Today it stands as a businessgrowing at the rate of 15-20 per cent annually. Together with banking services, it addsabout 7 per cent to the countrys GDP .In spite of all this growth the statistics of the penetration of the insurance in the country is very poor. Nearly 80% of Indian populations are without Life insurance cover and the Health insurance. This is anindicator that growth potential for the insurance sector is immense in India. It was due tothis immense growth that the regulations were introduced in the insurance sector and incontinuation Malhotra Committee was constituted by the government in 1993 toexamine the various aspects of the industry. The key element of the reform process wasParticipation of overseas insurance companies with 26% capital. Creating a more

efficient and competitive financial system suitable for the requirements of the economywas the main idea behind this reform.Since then the insurance industry has gone through many sea changes .The competition

LIC started facing from these companies were threatening to the existence of LIC .sincethe liberalization of the industry the insurance industry has never looked back and todaystand as the one of the most competitive and exploring industry in India. The entry of theprivate players and the increased use of the new distribution are in the limelight today.The use of new distribution techniques and the IT tools has increased the scope of theindustry in the longer run.

Important milestones in the Indian life insurance business

y 1912: The Indian Life Assurance Companies Act came into force for regulatingthe life insurance business.

y 1928: The Indian Insurance Companies Act was enacted for enabling thegovernment to collect statistical information on both life and non-life insurancebusinesses.

y 1938: The earlier legislation consolidated the Insurance Act with the aim ofsafeguarding the interests of the insuring public.

y 1956: 245 Indian and foreign insurers and provident societies were taken over bythe central government and they got nationalized. LIC was formed by an Act ofParliament, viz. LIC Act, 1956. It started off with a capital of Rs. 5 crore and thattoo from the Government of India.


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Important milestones in the Indian general insurance business

y 1907: The Indian Mercantile Insurance Ltd. was set up which was the firstcompany of its type to transact all general insurance business.

y 1957: General Insurance Council, an arm of the Insurance Association of India,

framed a code of conduct for guaranteeing fair conduct and sound businesspatterns.y 1968: The Insurance Act improved for regulating investments and set minimal

solvency levels and the Tariff Advisory Committee was set up.y 1972: The General Insurance Business (Nationalization) Act, 1972 nationalized

the general insurance business in India. It was with effect from 1st January 1973.

107 insurers integrated and grouped into four companies viz. the National InsuranceCompany Ltd., the New India Assurance Company Ltd., the Oriental Insurance CompanyLtd. and the United India Insurance Company Ltd. GIC was incorporated as a company.

LIST OF INSURANCE COMPANIES IN INDIA

Life Insurer in Public Sector

1. Life Insurance Corporation of India

Life Insurers in Private Sector

2. MetLife India Life Insurance

3. ICICI Prudential

4. Bajaj Allianz Life Insurance

5. Max New York Life Insurance

6. Sahara Life Insurance

7. TATA AIG Life Insurance

8. HDFC Standard Life

9. Birla Sunlife

10.SBI Life Insurance

11.Kotak Life Insurance

12.Aviva Life Insurance


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13.Reliance Life Insurance Company Limited - Formerly known as AMP Sanmar

LIC

14.ING Vysya Life Insurance

15.Shriram Life Insurance

16.Bharti AXA Life Insurance Co Ltd

17.Future Generali Life Insurance Co Ltd

18.IDBI Fortis Life Insurance

19.AEGON Religare Life Insurance

20.DLF Pramerica Life Insurance

21.CANARA HSBC Oriental Bank of Commerce Life Insurance

22.Star Union Dai-ichi Life Insurance Co. Ltd.

23.INDIA First Life Insurance

Mission And Vision of the Company

Mission

We focus on the needs of our customers and create confidence, trust and loyalty byoffering a wide range of innovative insurance solutions.

Strengthened by our commitment to professional management, we ensure the continuedgrowth and advancement of our employees.

Vision

Kotak Life Insurance has a deep rooted commitment to improve the quality of life of its

customers, employees and stakeholders. We aim at improving the long term value in ourrelationship by continuous innovation and improvements.We do this by our three-prongeffort which strives to make Kotak Life Insurance a corporate with values.

y IncreaseCustomerValueKotak Life Insurance has gone to the heart of its customer's requirements anddeveloped products which are unique and serve the customer needs perfectly. We


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built a relationship of mutual trust and benefit to serve the Indian customer. AtKotak Life Insurance the customer always comes first.

y Cohesive Work Environment

We form long-term partnership with our employees by offering them an invigoratingwork experience. We not only demand loyalty, sincerity and values but also give itback in equal measures. Kotak Life Insurance will like to offer its employees spaceto grow, innovate and build a long-term career.

y Work with Honour

Kotak Life Insurance delivers everyday services in the marketplace with the highsense of duty and commitment. Our employees strive to build the long-term value

for all those come in contact with Kotak Life Insurance. Our consumers,distributors, employees, shareholders and the nation have our commitment that wewill uphold the values of trust, integrity and a Sense of Honour in every thought, actand deed in order to positively contribute to individual, society and nation growth.

PRODUCTS RANGE

Kotak Life Insurance offers a range of innovative, customer-centric products that meetthe needs of customers at every life stage. Its products can be enhanced with up to 4riders, to create a customized solution for each policyholder.

Protection Plans:- Helping you to grow and protect your wealth.

Savings & Investments Plans:- Manage today for a better tomorrow.

Retirement Plans:- The road to retirement, Make it easy.

Child Plans:- Plan a good future for your child.

PROTECTION PLANS

Kotak Loan Protection Plan -Kotak Loan Protection Plan is a protection plan

that helps share the burden of your loan.


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Kotak Eternal Life Plans -Kotak Eternal Life Plans are participating whole life

plans that provide enhanced protection till the golden age of 99.

Kotak Term/Preferred Term Plan - The Kotak Term/Preferred Term Plan is a

pure risk cover plan that provides you with a high level of protection at nominal

costs.

SAVING AND INVESTMENT PLANS

Kotak Super Advantage -Kotak Super Advantage is a smart investment plan that

addresses your current financial needs while building long term savings for your

future.

Kotak Platinum Edge -You've lived life on your own terms; always done what

you've believed in. You are used to having the luxury of choice and the power to

control.

Kotak Endowment Plan -Kotak Endowment Plan is a participating endowment

plan that provides you an avenue for long term regular investments to accumulate

a lump sum on maturity.

Kotak Surakshit Jeevan -Kotak Surakshit Jeevan, an enhanced protection andlong-term savings plan, makes sure your family remains financially independent

even if you are not around.

Kotak Safe Investment Plan II -Equity investments although attractive are

given to volatility and can often result in loss of capital. Therefore, as a prudent

investor you would be inclined to avoid such investments or limit your exposure

to them.

Kotak Single Invest -Life has the ability to surprise you pleasantly with financial

windfall and surplus. As an individual, who is aware of his responsibilities and

aspirations, it is now up to you to make the best use of it.

Kotak Money Back Plan -This plan offers the key benefit of cash lump sums at

periodic intervals of five years ensuring that you are able to meet any of your

financial obligations.


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Kotak Premium Return Plan -The premium Return Plan will get you the dual

benefit of a risk cover and savings, with minimal paperwork and procedures.

RETIREMENT PLANS

Kotak Long Life Wealth Plus -Life has several shades. Some known, some

unknown; some planned, some unplanned. Life may not always be the way you

want it to be.

Kotak Second Innings Plan -With a comfortable lifestyle and a happy family,

today you are enjoying life to the full.

Kotak Capital Multiplier Plan -The Kotak Capital Multiplier Plan is the only

plan of its kind that allows you to enjoy returns even beyond maturity.

Kotak Long Life Secure Plus - Protecting your family and ensuring their

comfort has always been your primary concern and key responsibility.

Kotak Guaranteed Pension Builder -Kotak Guaranteed Pension Builder works

for your security and financial independence by allowing you to save

systematically for your golden years.

Kotak Retirement Income Plan -The Kotak Retirement Income Plan is a

savings plan designed to meet your post-retirement needs. It is a plan that gives

you "Jeene ki azaadi".

CHILD PLANS

Kotak Headstart Child Plans -The head start child plans are specially tailored,

cost effective plans that aim to give your children the financial means to pursue

his or her dreams.


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Kotak Child Advantage Plan -The Kotak Child Advantage Plan is an

investment plan designed to meet your child's future financial needs.

SIZE OF ORGANIZATION

Kotak Life Insurance employs around 5,565 people in its various businesses and has 197

branches across 141 cities. Kotak Mahindra Old Mutual Life Insurance Ltd. reported

earnings results for the fourth quarter and full year ended March 31, 2010. For the

quarter, the company reported profit after tax of INR 440 million compared to INR 400

million for the same period last year. For the full year, the company reported profit after

tax of INR 690 million compared to INR 140 million for the same period last year. Kotak

Life Insurance is one of the best private insurance players in the market, in the latest

IRDA annual report of 2009-2010, Kotak is one of the four insurance companies which

have booked profit for the financial year.

MANAGEMENT OVERVIEW

In Kotak Life Insurance work as a team and have a flat management structure and the

top management has many years of experience which has helped guide the company into

a position of leadership.

yMr. Uday Kotak CEO of the company

yMr. Gaurang Shah Director

yMr. Pankaj Desai - Managing Director

yMr. G Muralidhar - Chief Operating Officer

yMr. Subhasish Ghosh - Sr. VP, Financial Institutions Group

yMr. Sugata Dutta - Head Human Resources

yMs. Elizabeth Venkataraman - Senior Vice President Marketing

yMr. Andrew Cartwright - Appointed Actuary


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yMr. Suresh Agarwal - Head of Alternate channel

yMr. Shekhar Bhandari - Head of Tied channel

yMr. Anand Dewan - Head Business Impact Group (BIG)

yMr. Sandip Shrikhande - Head of Group Business

yMr. Dhiresh Rustogi - Chief Technology Officer

yMr. Sudhakar Shanbag - Chief Investment Officer

Hierarchy in Kotak Life Insurance Branch

Country head

Regional Manager

Senior Branch Manager

Branch Manager

Assistant Branch Manager Branch Operation Incharge

(ABM) (BOE)

Sales Manager Operation Executive

Assistant Sales Manager Operation

Life Advisors


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MARKET SHARE & POSITION OF THE COMPANY IN THE INDUSTRY

The introduction of private players in the industry has added value to the industry. The

initiatives taken by the private players are very competitive and have given immense

competition to the on time monopoly of the market LIC. Since the advent of the private

players in the market the industry has seen new and innovative steps taken by the players

in this sector. The new players have improved the service quality of the insurance. As a

result LIC down the years have seen the declining phase in its career. The market share

was distributed among the private players. Though LIC still holds the 75% of the

insurance sector but the upcoming natures of these private players are enough to give

more competition to LIC in the near future. LIC market share has decreased from 95%

(2002-03) to 81 %( 2004-05).The following companies has the rest of the market share of

the insurance industry. Table 3 shows the mane of the player in the market.

Kotak Life Insurance is one of the best private insurance players in the market, in the

latest IRDA annual report of 2009-2010, Kotak is one of the four insurance companies

which have booked profit for the financial year.

JOURNEY SO FAR

The Kotak Mahindra Group was born in 1985 as Kotak Capital Management Finance

Limited. This company was promoted by Uday Kotak, Sidney A.A. Pinto, and Kotak and

Company. Industrialist Harish Mahindra and Anand Mahindra took a stake in 1986, and

that's when the company changed its name to Kotak Mahindra Finance Limited. Since

then its been steady and confident journey to growth and success.

1986 Kotak Mahindra Finance Limited starts the activity of Bill Discounting

1987 Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market

1990 The Auto Finance division is started

1991 The Investment Banking Division is started. Takes over FICOM, one of India's

largest financial retail marketing networks

1992 Enters the Funds Syndication sector


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1995 Brokerage and Distribution businesses incorporated into a separate company -

Kotak Securities. Investment Banking division incorporated into a separate

company - Kotak Mahindra Capital Company

1996 The Auto Finance Business is hived off into a separate company - Kotak

Mahindra Prime Limited (formerly known as Kotak Mahindra Primus Limited).

Kotak Mahindra takes a significant stake in Ford Credit Kotak Mahindra Limited,

for financing Ford vehicles. The launch of Matrix Information Services Limited

marks the Group's entry into information distribution.

1998 Enters the mutual fund market with the launch of Kotak Mahindra Asset

Management Company.

2000 Kotak Mahindra ties up with Old Mutual plc for the Life Insurance business.

Kotak Securities launches its on-line broking site (now

www.kotaksecurities.com). Commencement of private equity activity through

setting up of Kotak Mahindra Venture Capital Fund.

2001 Matrix sold to Friday Corporation. Launches Insurance Services

2003 Kotak Mahindra Finance Ltd. converts to a commercial bank - the first Indian

company to do so.

2004 Launches India Growth Fund, a private equity fund.

2005 Kotak Group realigns joint venture in Ford Credit; Buys Kotak Mahindra Prime

(formerly known as Kotak Mahindra Primus Limited) and sells Ford credit Kotak

Mahindra. Launches a real estate fund

2006 Bought the 25% stake held by Goldman Sachs in Kotak Mahindra Capital

Company and Kotak Securities


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RESEARCH METHADOLOGY

PROBLEM STATEMENT

The investment strategy and management style are qualitative but the fund return is thequantitative indicators to judge the performance of mutual funds. Return alone should notbe considered as the basis of measurement of the performance of a mutual fund scheme,it should also include the risk taken by the fund manager because different funds willhave different levels of risk attached to them.

OBJECTIVES OF THE STUDY

To project Mutual Fund as the productive avenue for investing activities To show the wide range of investment options available in Mutual Funds by

explaining its various schemes.

To help an investor make a right choice of investment while considering theinherent risk factors to understand the recent trends in Mutual Fund..

Comparative study between the other leading Mutual funds in the present market

To get the insight knowledge about the Mutual Funds

SCOPE OF THE STUDY

The study here has to analysis open-ended equity Growth Schemes offered by the Kotak MutualFund and other major Assets Management Companies. Each scheme is analyzed according to its

performance against the other, based on factors like Sharpes Ratio, F(Beta) Co-efficient, andReturns..

SOURCES OF DATA COLLECTION

The Methodology involves randomly selecting Open-Ended equity schemes of differentfund houses of the country. The data collected for this project is basically from


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1. Secondary sources: The monthly fact sheets and annexure collected from

different mutual fund companies, newspaper, Internet and web search.

DURATION OF STUDY

The duration of study for a period of two months from 1st June 2010 to 31st July 2010.

HYPOTHESIS

1)

The portfolios are well diversified and fund managers are able to generate returnsmore than that of the market because of their knowledge and stock selectionskills.

2) Consider all the qualities of AMC important in the selection of the scheme.3) The investors services are important in the selection of the funds/ schemes.4) Limited Mutual funds are selected for the study.

ANALYTICAL TOOL

The following tools are used for this study to draw meaningful analysis andinterpretation of various data collected.

Ratio analysis includes Sharpe Ratio, Portfolio Turnover ratio Standard Deviation

Beta(F) co-efficient analysis and R-squared.

The Sharpes Measure:-

In this model, performance of a fund is evaluated on the basis of Sharpe Ratio, which isa ratio of returns generated by the fund over and above risk free rate of return and thetotal risk associated with it.According to Sharpe, it is the total risk of the fund that the investors are concerned

about. So, the model evaluates funds on the basis of reward per unit of total risk.Symbolically, it can be written as:


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Sharpe Index (Si) = (Ri - Rf)/Si

Where,

Si = Standard Deviation of the fund.

While a high and positive Sharpe Ratio shows a superior risk-adjusted performance of afund, a low and negative Sharpe Ratio is an indication of unfavorable performance.

F(Beta) Co-efficient:-

Systematic risk is measured in terms of Beta, which represents fluctuations in the NAVof the fund vis--vis market. The more responsive the NAV of a Mutual Fund is to thechanges in the market; higher will be its beta. Beta is calculated by relating the returnson a Mutual Fund with the returns in the market. While unsystematic risk can be

diversified through investments in a number of instruments, systematic risk cannot. Byusing the risk return relationship, we try to assess the competitive strength of theMutual Funds vis--vis one another in a better way.

F(Beta) is calculated as N (7XY) 7X7Y

N (7X2) (7X)

2

Standard Deviation

in the fund analysis activity lie the twin pursuits of judging returns and risk. It involves

determing a funds average performance over a period of time. Standard Deviation

gives quality rating of an average. The standard Deviation of an average is the amount

by the numbers that go into an average deviate from that average. If the performance

are very different from the average, then that fund is risky and delivering high return in

some months and poor returns in others.

R-Squared

R-squared values ranges from 0 to 1. An R-squared of 1 means that all movement of

security are completely explained by movements in the index. A high R-squared

(between 0.85 and 1) indicates the funds performance patterns have been in line with

the index. A fund with a low R-squared (0.70 or less ) doesnt act much like the index.


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Portfolio Returns: -

Returns of the different schemes are taken for the comparison and analysis part.

REVIEW OF LITERATURE

Reference to previous research work done on the related topic, findings and suggestions.S.Narayan Rao evaluated performance of Indian mutual funds in a bear market throughrelative performance index, risk-return analysis, Treynors ratio, Sharpes ratio, Sharpesmeasure. The study used 269 open-ended schemes (out of total schemes of 433) forcomputing relative performance index. Then after excluding funds whose returns are lessthan risk-free returns, 58 schemes are finally used for further analysis. The results of performance measures suggest that most of mutual fund schemes in the sample of 58were able to satisfy investors expectations by giving excess returns over expected

returns. Reference to previous research work done on the related topic, findings andsuggestions.

Mishra, (2002) measured mutual fund performance using lower partial moment. In thispaper, measures of evaluating portfolio performance based on lower partial moment aredeveloped. Risk from the lower partial moment is measured by taking into account onlythose states in which return is below a pre-specified target rate like risk-free rate.

CURRENT SCENARIO

The Indian mutual fund industry can now boast on that. With the total Asset UnderManagement (AUM) increasing from Rs.1,01,565 Crores in Jan 2000 to Rs.5,67,601.98Crores by April 2008, according to the Association of Mutual Funds in India (AMFI).

Last six years have been the most turbulent as well as exiting ones for the industry. Newplayers have come in, while others have decided to close shop by either selling off ormerging with others. Product innovation is now pass with the game shifting toperformance delivery in fund management as well as service. Those directly associatedwith the fund management industry like distributors, registrars and transfer agents, andeven the regulators have become more mature and responsible.

The industry is also having a profound impact on financial markets. While UTI hasalways been a dominant player on the bourses as well as the debt markets, the newgeneration of private funds which have gained substantial mass are now seen flexing theirmuscles. Fund managers, by their selection criteria for stocks have forced corporate


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governance on the industry. By rewarding honest and transparent management withhigher valuations, a system of risk-reward has been created where the corporate sector ismore transparent then before.

Funds have shifted their focus to the recession free sectors like pharmaceuticals, FMCG

and technology sector. Funds performances are improving. Funds collection, whichaveraged at less than Rs.100bn per annum over five-year period spanning 1993-98doubled to Rs.210bn in 1998-99. Total collection for the financial year ending March2000 is expected to reach Rs.450bn.

What is particularly noteworthy is that bulk of the mobilization has been by the privatesector mutual funds rather than public sector mutual funds. Indeed private MFs saw a netinflow of Rs.7819.34 crore during the first nine months of the year as against a net inflowof Rs.604.40 crore in the case of public sector funds.

Mutual funds are now also competing with commercial banks

in the race for retail investors savings and corporate float money. The power shifttowards mutual funds has become obvious. The coming few years will show that thetraditional saving avenues are losing out in the current scenario. Many investors arerealizing that investments in savings accounts are as good as locking up their deposits ina closet. The fund mobilization trend by mutual funds in the current year indicates thatmoney is going to mutual funds in a big way.

India is at the first stage of a revolution that has already peaked in the U.S. The U.S.boasts of an Asset base that is much higher than its bank deposits. In India, mutual fundassets are not even 10% of the bank deposits, but this trend is beginning to change.Recent figures indicate that in the first quarter of the fiscal year mutual fund assets went

up by 115% whereas bank deposits rose by only 17%. (Source: Thinktank, The FinancialExpress September) This is forcing a large number of banks to adopt the concept ofnarrow banking wherein the deposits are kept in Gilts and some other assets whichimproves liquidity and reduces risk. The basic fact lies that banks cannot be ignored andthey will not close down completely. Their role as intermediaries cannot be ignored. It isjust that Mutual Funds are going to change the way banks do business in the future.


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MAJOR MUTUAL FUND COMPANIES IN INDIA

Reliance Mutual Fund - Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai

Ambani Group, is one of the fastest growing mutual funds in the country. RMF offers

investors a well-rounded portfolio of products to meet varying investor requirements and

has presence in 159 cities across the country.

The main objectives are:

y To carry on the activity of a Mutual Fund as may be permitted at law andformulate and devise various collective Schemes of savings and investments forpeople in India and abroad and also ensure liquidity of investments for the Unitholders;

y To deploy Funds thus raised so as to help the Unit holders earn reasonable returnson their savings and

y To take such steps as may be necessary from time to time to realise the effectswithout any limitation.

Trustee Reliance Capital Trustee Company Ltd.

Average Asset under Management -Rs.1, 01,320 Crores as on 30 June 2010No. of investors- Over 74 Lakh

Reliance Equity Opportunity Fund

Investment Objective

The primary investment objective of the scheme is to seek to generate capitalappreciation & provide long-term growth opportunities by investing in a portfolioconstituted of equity securities & equity related securities and the secondary objective isto generate consistent returns by investing in debt and money market securities.

Latest NAV 34.422 (23/07/10)

52-Week High 34.7234 (23/07/10)

52-Week Low 21.2758 (10/08/09)

Fund Category Equity: Diversified


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Type Open -End

Inception Date March 31, 2005

Risk Grade Average

Return Grade Above Average

Net Assets (Cr) 2,112.97 (30/06/10)

Benchmark Index BSE 100

Minimum Investment Rs.- 5000 and additional purchaseamount-1000

Asset allocation

InstrumentIndicative assetallocation (%)

Risk Profile

Maximum MinimumEquity and Equity related Instruments

100% 75%Medium toHigh

Debt Instruments & Money Marketsecurities (including investments insecuritised debt)

25% 0%Medium toLow

Comparative Performance

Performance as on 30/6/2010

Absolute(%)

Compounded Annualized Return (%)

6months 1year 3year 5year SinceInception

Reliance Equity Opportunities FundGrowth

12.48 63.40 12.03 25.23 25.63

BSE 100 Index (Benchmark) 2.87 24.71 7.46 19.95 20.92

NAV as on June 30, 2010 Rs. 32.9375 per unit

Returns 1 year : CAGR


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Opportunities Fund -

Retail Plan - Growth

BSE100

Volatility Measures

Portfolio Turnover Ratio 93%Standard Deviation - 4.43%Beta - 0.8609R Squared - 0.8753Sharpe Ratio - 0.0554


24/55

DSP Black Rock Mutual Fund- The philosophy of DSP BlackRock Investment

Managers Pvt. Ltd. has been grounded in the belief that experienced investment

professionals, using a disciplined process and sophisticated analytical tools, can

consistently add value to client portfolios. With the three-dimensional approach

(Functional Dimension, Product Dimension, and Region Dimension) to managing the

organization, seek to:

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

Trustee DSP Merrill Lynch Trustee Company Pvt. Ltd.

Average Asset under Management excess US$ 1.3 trillion

DSP ML Opportunities Fund


An Open Ended growth Scheme, seeking to generate long term capital appreciation andwhose secondary objective is income generation and the distribution of dividend from a

portfolio constituted of equity and equity related securities concentrating on theinvestment focus of the Scheme

Latest NAV 83.931 (23/07/10)

52-Week High 84.456 (23/07/10)

52-Week Low 62.085 (10/08/09)


Type Open -End

Inception Date May 16, 2000

Risk Grade Below Average

Return Grade Average

Net Assets (Cr) 886.42 (30/06/10)

Benchmark Index S&P CNX Nifty



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Absolute

(%)



DSP Black Rock Opportunity Fund 8.68 39.82 10.22 24.16 23.05

S&P CNX Nifty (Benchmark) 2.14 23.80 7.14 19.05 14.85

NAV as on June 30, 2010 Rs. 81.770 per unitReturns 1 year : CAGR

0

510

15

20

25

30

35

40

45

6months 1year 3year 5year Since

Inception

DSP Black Rock

Opportunity Fund

S&P CNX Nifty

(Benchmark)

Volatility Measures

Portfolio Turnover Ratio: 65 %Standard Deviation: 26.29%Beta: 0.89R-Squared: 0.8483Sharpe Ratio: 0.70


26/55

HDFC Mutual Fund -HDFC Mutual Fund is belief to give the investor the chance to

profitably invest in the financial market, without constantly worrying about the market

swings. To realize this belief, HDFC Mutual Fund has set up the infrastructure required

to conduct all the fundamental research and back it up with effective analysis. Its strong

emphasis on managing and controlling portfolio risk avoids chasing the latest fads and

trends.

Trustee HDFC Trustee Company Ltd.

Average Asset under Management-: Rs. 86648.10 Crs. as on 30 June 2010

No. of investors: - 40, 47,001

HDFC Core & Satellite Fund


To generate capital appreciation through equity investment in companies whose sharesare quoting at prices below their true value.

Latest NAV 39.383 (23/07/10)

52-Week High 39.383 (23/07/10)

52-Week Low 26.219 (10/08/09)


Type Open -End

Inception Date September 17, 2004



Net Assets (Cr) 427.11 (30/06/10)

Benchmark Index BSE 200



27/55

Investment Pattern

Instrument

Indicative asset

allocation(% of total assets)

Risk Profile

Minimum- MaximumEquity and Equity related Instruments 90% -95% High

Fixed Income Securities Debt (includingsecuritised debt of upto 10% of net assets &Money Market instruments)

5% -10%Low toMedium



Absolute(%)



HDFC Core & Satellite Fund 9.88 49.58 11.29 22.73 25.52BSE 200 (Benchmark Return) 3.64 27.22 7.58 19.47 21.61

NAV as on June 30, 2010 Rs. 37.251 per unit

Date of Inception September 17, 2004Returns 1 year : CAGR


28/55

0

10

20

30

40

50

60

6 months 1 Year 3 Years 5 years Since

Inception

HDFC Core & Satellite Fund

BSE 200 (Benchmark Return)

Volatility Measures

Portfolio Turnover Ratio: 44.68%Standard Deviation: 10.40%Beta: 0.9490R-Squared: 0.92Sharpe Ratio: 0.11


29/55

Franklin Templeton Mutual Fund- Franklin Templeton is one of the largest financial

services groups in the world, based in San Mateo, California, USA. Franklin Templeton

has over 50 years of experience in investment management. It also provides investment

management and advisory services. it is Franklin belief that investors differ in their

investment needs based on their personal financial goals. It is recommended that you

should, at the very beginning, identify your own financial goals,

Trustee Franklin Templeton Trustee Services Pvt. Ltd.

Average Asset under Management- Rs. 35774.78 crores as on 31 May 2010

No. of investors- Over 22 lakh

Franklin India Flexi Cap Fund


Franklin India Flexi Cap Fund (FIFCF) seeks to provide medium to long-term capitalappreciation by investing in stocks across the entire market capitalization range.

& ProfileLatest NAV 31.0664 (23/07/10)

52-Week High 31.0664 (23/07/10)

52-Week Low 23.1452 (10/08/09)


Type Open -End

Inception Date March 02, 2005



Net Assets (Cr) 2,174.06 (30/06/10)

Benchmark S&P CNX 500Minimum Investment Rs.- 5000

.


30/55

Assets Allocation

Instrument

Indicative asset

allocation(% of total assets)

Risk Profile

Minimum- MaximumEquity and Equity related Instruments 90% -95% High

Fixed Income Securities Debt5% -10%

Low toMedium



Absolute(%)



I C 4.07 33.75 9.15 23.04 22.75

& CNX 00 (Benchmark) 2.12 27.41 6.82 18.31 18.05



31/55

0

5

10

15

20

25

30

35

40


inception

Franklin India Flexi CapFund

S&P CNX 500 (Benchmark

Return)

Volatility Measures

Portfolio Turnover Ratio:- 254.56%Standard Deviation:-9.9 %Beta: 0.84R-Squared: 0.91Sharpe Ratio: 0.84


32/55

SBI Mutual Fund -SBI Mutual Fund is Indias largest bank sponsored mutual fund and

has an enviable track record in judicious investments and consistent wealth creation. At

SBIMF they devote considerable resources to gain, maintain and sustain our profitable

insights into market movements and, consistently push the envelope to ensure our

investors get the maximum benefits year after year.

Trustee SBI Mutual Fund Trustee Company Pvt. Ltd.

Average Asset under Management- Over Rs.38, 782 crores Crs as on 30 June 2010

No. of investors- over 5.8 million.

SBI Magnum Contra Fund


To provide the investors maximum growth opportunity through equity investments instocks of growth oriented sectors of the economy. There are five sub-funds dedicated tospecific investment themes viz. Information Technology, Pharmaceuticals, FMCG,Contrarian (investment in stocks currently out of favour) and Emerging Businesses

Latest NAV 57.86 (23/07/10)

52-Week High 57.91 (23/07/10)

52-Week Low 46.2 (17/08/09)


Type Open -End

Inception Date July 14, 1999

Risk Grade Average


Net Assets (Cr) 3586.05 (30/06/10)

Benchmark BSE 100

Minimum Investment Rs.- 5000 and Additional Purchase Rs.1000


33/55

Assets Allocation

InstrumentIndicative asset allocation(% of total assets)

Minimum- Maximum

Equity and Equity related Instruments 94%Debt and Others

6%



Absolute(%)



SBI M g C t 6.1 29.14 10.74 26.41 27.48BSE100 I x (Benchmark) 4.23 24.71 7.46 19.95 15.04


0

5

10

15

20

25

30

35

6mont 1year 3year 5year Since

Inception

SBI Magnum Contra und

BSE100 Index

(Benchmark)

Volatility Measures

Portfolio Turnover Ratio- 92%Standard Deviation: 35.69%Beta: 0.91R-Squared: 0.98Sharpe Ratio: 0.31


34/55

HSBC Mutual Fund HSBC Asset Management (India) Private Limited is theInvestment Manager to HSBC Mutual Fund, set up locally by the HSBC Group. HSBCMutual Fund is the brand name adopted by HSBC Asset Management (India) PrivateLimited. The business is working on ambitious plans to position itself as one of theleading Private Sector Fund Managers in the Indian financial market - one of the most

promising markets in Asia. It also aims to expand its customer base by extending itsproduct range to include a wide variety of investment products and enhance its reputationin India of being a provider of international quality investment products and services.

Trustee HSBC Asset Management (India) Private LimitedAverage Asset under Management- Rs.19792 crores as on 31 May 2010

HSBC India opportunities Fund


To seek long term capital growth through investments across all market capitalisations,including small, mid and large cap stocks. It aims to be predominantly invested in equity& equity related securities.

Latest NAV 33.4417 (23/07/10)

52-Week High 33.4907 (23/07/10)

52-Week Low 27.6163 (17/08/09)

Fund Category Equity: DiversifiedType Open -End

Inception Date February 24, 2004


Return Grade Below Average

Net Assets (Cr) 258.83 (30/06/10)

Benchmark BSE 500

Minimum Application Amount Rs 10,000 per application

Assets Allocation

Instrument Indicative asset allocation (%)Equity 90%

Debt 5.01%

Others 4.99%


35/55



Absolute

(%)



HSBC India Opportunities Fund 1.98 22.35 1.79 19.38 20.62

BSE 00 Index (Benchmark) 3.65 29.14 7.04 19.34 19.78


0

0

0

0

nt s

e

e

s

e

s Sin

e

ins e

tion

HSBC India

ort nit

nd

Ben

ark BSE

00 Index

Returns 1 year : CAGR

Volatility Measures

Portfolio Turnover Ratio- 154%Standard Deviation: 1.39 %Beta: 0.7794R-Squared: 0.9357Sharpe Ratio: -0.0047


36/55

Tata Mutual Fund - The Tata Asset Management philosophy is centred on seeking

consistent, long-term results. Tata Asset Management aims at overall excellence, within

the framework of transparent and rigorous risk controls. Tata constantly benchmark its

efforts against these tenets of performance: Consistency , Flexibility, Stability and

Service.

Trustee Tata Trustee Company Pvt. Ltd.

Average Asset under Management- Rs.18, 464 crores as on 30 June 2010

Tata Equity Opportunity Fund


To provide Income distribution and long term capital gain while at all times emphasizingthe importance of capital appreciation.

Latest NAV 80.8531 (23/07/10)

52-Week High 82.2445 (14/01/10)

52-Week Low 60.5061 (13/07/09)


Type Open -End


Risk Grade Above Average

Return Grade Below Average

Net Assets (Cr) 442.90 (30/06/10)

Benchmark BSE 500

Minimum investment Rs. 5000


37/55

Assets Allocation

Instrument Indicative asset allocation(% of total assets)

Minimum- MaximumEquity and Equity related Instruments 95%

Debt and Others5%



Absolute(%)



TataEquit O ortunit und 2.13 41.95 6.20 21.11 12.72BSESen ex (Benchmark) 1.35 22.13 6.50 19.72 11.21



38/55

0

5

10

15

20

25

30

35

40

45


inception

ata Equity Opportunities Fund

BSE Sensex

Volatility Measures

Portfolio Turnover Ratio- 136.28Standard Deviation: 37.40Beta: 1.05R-Squared: 0.93Sharpe Ratio: -0.06


39/55

Sundaram BNP Paribas Mutual Fund - At Sundaram BNP Paribas Mutual, identifying

an investment opportunity long before it manifests as one, is the heart of our business

belief. So, constant updating of investors' knowledge base is just part of the service

package we offer our customers. At the core of our investment philosophy lies our

commitment to providing consistent returns through sensible investment management

practices, because your money is precious. Investment philosophy of Sundaram BNP

Paribas Mutual Fund:-

A greater level of neglect in the Indian equity universe leaves fund managers with a

wider array of opportunities to exploit through an active fundamental approach.

An extensive fundamental quantitative analysis, regular company visits with top

management allow us to assess these markets, thus giving us access to attractive and

relatively unknown companies with strong financial characteristics.

Long term outperformance is achieved by investing in large and medium/small sized

companies with unique business strength in attractive sectors, sound and transparent

management, visibility and durable growth at a reasonable price. The risk

management is also crucial.

The local presence and expertise of the fund management team is key to exploiting

market mispricings due to the lower level of research resulting in an inefficiency of

information in Indian equities.

Trustee Sundaram BNP Paribas Trustee Company Limited

Average Asset under Management- Rs.13, 976 crores as on 31 May 2010


40/55

Sundaram BNP Paribas Leadership Fund


To achieve capital appreciation by investing in select stocks of companies. The leaders

are identified as top 2/3 companies in any sector/sub-sector in terms of net revenue ortotal income.

Latest NAV 40.5261 (23/07/10)

52-Week High 40.6074 (23/07/10)

52-Week Low 31.1097 (17/08/09)


Type Open -End

Inception Date June , 2004

Risk Grade Above AverageReturn Grade Average

Net Assets (Cr) 164.42 (30/06/10)

Benchmark S&P CNX Nifty

Minimum Application Amount Rs 5000

Assets Allocation

Instrument Indicative asset allocation (%)Equity 97%

Debt & Others 3%



Absolute(%)


6months 1year 3year 5year Since

InceptionSundaram Paribas Leadership Fund 4.27 31.0 8.1 21.6 25.7

S&P CNX Nifty (Benchmark) 2.73 23.8 7.1 19.0 23.0



41/55

0

5

10

15

20

25

30

35


inspection

Sundaram BNP Paribas

Leadership Fund

S&P CNX Nifty

Volatility Measures

Portfolio Turnover Ratio- 154%Standard Deviation: 31.56%Beta: 1.03R-Squared: 0.94Sharpe Ratio: -0.65


42/55

Kotak Mahindra Mutual Fund- Kotak Mahindra is one of India's leading financial

institutions, offering complete financial solutions that encompass every sphere of life.

From commercial banking, to stock broking, to mutual funds, to life insurance, to

investment banking, the group caters to the financial needs of individuals and corporates.

KMMF offers schemes catering to investors with varying risk - return profiles and was

the first fund house in the country to launch a dedicated gilt scheme investing only in

government securities.

Trustee Kotak Mahindra Trustee Company Ltd.

Average Asset under Management - Rs.28, 636.86 crores as on 30 June 2010

No. of investors- Around 9.77 Lakhs

Kotak Opportunities Fund

Investment objective

To generate capital appreciation from a diversified portfolio of equity & equity relatedinstruments

Latest NAV 45.281 (2307/10)52-Week High 45.532 (22/07/10)

52-Week Low 34.74 (17/08/09)


Type Open -End

Inception Date September 9, 2004

Risk Grade Above Average


Net Assets (Cr) 1111.21(3006/2010)

Benchmark S&P CNX 500

Minimum Application Amount Rs 5,000 per application and AdditionalRs.1000


43/55

Assets Allocation

Instrument Indicativeasset

allocation (%)

RiskProfil

Equity and equity related securities 97% Medium to high

Debt and Money Market Instruments 3% Low



Absolute(%)



Kotak Opportunity Fund 5.60 32.63 11.40 24.84 29.33

S&P CNX 500 (Benchmark) 2.12 27.41 6.82 18.31 21.92



44/55

0

5

10

15

20

25

30

35

6 onth 1year 3year 5 year S n e

In eptton

Kotak pportun ty fund

S&P 500

Volatility Measures

Portfolio Turnover Ratio- 332.69%Standard Deviation: 38.74%Beta: 1.05R-Squared: 0.93Sharpe Ratio: -0.35


45/55

Birla Sun Life Mutual Fund- 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 companys management, sustainability of its

business model and its competitive position, amongst other factors.

Trustee Birla Sun Life Trustee Co. Ltd.

Average Asset under Management- Rs. 62, 343 crores as on 31 March 2010No. of investors- Over 23 lakh

Birla Sun Life '95 Fund

Investment objective

An open-ended balanced scheme with the objective of long term growth of capital andcurrent income, through a portfolio of equity and fixed income securities

Latest NAV 298.83 (2307/10)

52-Week High 299.71 (22/07/10)

52-Week Low 229.43(17/08/09)

Fund Category Hybrid: Equity-Oriented

Type Open -End


Risk Grade Average

Return Grade Above Average

Net Assets (Cr) 302.58 (3006/2010)

Benchmark Crisil Balanced

Minimum Application Amount Rs 5,000 per application and Additional

Rs.1000


46/55

Assets Allocation

Instrument Indicative

asset

allocation (%)

RiskProfil

Equity and equity related securities 69% Medium

Debt and Money Market Instruments &others

31% Low



Absolute(%)



Birla Sun Life '95 Fund 13.5 27.67 13.33 20.67 24.91

Crisil Balanced index (Benchmark) 8.26 16.56 8.12 15.96 22.56



47/55

0

10

1

0

0

!

"ont

#

$

1%

ear

%

ear

%

ear&

'n

(

e

In(

e ) t '0

n

1 ' rla&

un L ' fe '9

2 und

Cr'

$

'l

1alan

(

ed'ndex

3 1en

(

# "ar

4 5

Volatility Measures

Portfolio Turnover Ratio- 51%Standard Deviation: 27.83%Beta: 1.00R-Squared: 0.86

Sharpe Ratio: -0.41


48/55

OBSERVATION

Observations are made from the data analysis.

The following observations are drawn from the analysis of schemes:

Funds

Sharpe

Ratio

Portfolio

Turnover

Ratio %

Standard

Devitation

%

Beta

coefficient

R

squared

Reliance

Equity

Opportunity

Fund

0.0554 93 4.4376 0.8609 0.8753

DSP MLOpportunities

Fund

0.70 65 26.29 0.89 0.8483

HDFC Core

and Satellite

Fund

0.11 44.68 10.40 0.9490 0.92

Flenklin

India Flexi

Cap Fund

0.84 254.56 9.9 0.84 0.91

SBI Magnum

Contra Fund

0.31 92 35.69 0.91 0.98

HSBC IndiaOpportunity

Fund

0.0047 154 1.39 0.7794 0.9357

Tata Equity

Opportunity

Fund

0.06 136.28 37.40 1.05 0.93

Sundram

BNP Paribas

Leadership

Fund

0.65 84 31.56 1.03 0.94

Kotak

OpportunityFund

0.35 332.69 38.74 1.07 0.96

Birla Sun

Life '95 Fund

0.41 51 27.83 1.00 0.86


49/55

00.10.20.3

Reliance

Fund

DSP Fund

HDFCFund

FlenklinCap Fund

SBI Fund

HSBC IndiaFund

Tata Fund

SundramLeadership

Fund

Kotak Fund

Birla SunLife Fund

050

100

150

200

250

300

350

Reliance

Fund

DSP Fund

HDFCFund

FlenklinCap Fund

SBI Fund

HSBC IndiaFund

Tata Fund

SundramLeadership

Fund

Kotak Fund

Birla SunLife Fund

PortfolioTurnoverRatio%offunds


50/55

0 510

15

20

Reliance

Fund

DSP Fund

HDFCFund

FlenklinCap Fund

SBI Fund

HSBC IndiaFund

Tata Fund

SundramLeadership

Fund

Kotak Fund

Birla SunLife Fund

00.2

0.4

0.6

0.8 1

1.2

Reliance

Fund

DSP Fund

HDFCFund

FlenklinCap Fund

SBI Fund

HSBC IndiaFund

Tata Fund

SundramLeadership

Fund

Kotak Fund

Birla SunLife Fund

Beta

coefficientofunds


51/55

0. 0

.

0. 0

.

0.

SP

SBI

SB I

T t

S m

K t

B Sf


52/55

FINDINGS

RELIANCE EQUITY OPPORTUNIY FUND

o It is an equity-diversified fund.o It is an open ended equity scheme.

o Since the beta (F) ratio is less than 1, it implies that the securities is less volatilethan the market.

o R squared is lies between 0.85 to1 that indicates that the fund performance patternhave been in line with the index.

o It is suitable for investors looking for medium risk and above average return.

DSP ML OPPORTUNITIES FUND

o It is an open ended equity diversified growth scheme.o The beta coefficient is less than 1, that implies the security is less volatile than the

marketo The risk grade of this security is below average and overall return grade is

average.o It is suitable for those investors who are looking less risk.

HDFC CORE AND SATELLITE FUND

o

It is equity -diversified fund.o It is an open ended growth schemeo The beta coefficient is less than 1, that implies the security is less volatile than the

marketo The risk grade of this security is medium and overall return grade is average.o In HFFC one year return is 49.58% which is more as compare to other fund

scheme and lower from Reliance Equity opportunity fund.

o R squared is lies between 0.85 to1 that indicates that the fund performance patternhave been in line with the index.

FLENKLIN INDIA FLEXI CAP FUND

o It is an equity- diversified fund.o It is an open -ended equity scheme.o The beta coefficient is less than 1, that implies the security is less volatile than the

market


53/55

o R squared is lies between 0.85 to1 that indicates that the fund performance patternhave been in line with the index

o The risk grade of this security is medium and overall return grade is average.o Portfolio turnover ratio is higher so that this fund is costlier in term of

commission, fee etc.

SBI MAGNUM CONTRA FUND

o It is an equity- diversified fund.o It is an open -ended equity schemeo The beta coefficient is less than 1, that implies the security is less volatile than the

marketo Its standard deviation is 35.69% and R squared is lies between 0.85 to1 that

indicates that the fund performance pattern have been in line with the indexo The risk grade of this security is less and overall return grade is average

HSBC INDIA OPPORTUNITY FUND

o It is an equity diversified open- ended scheme.o In HSBC the returns are lesser than other AMCso It standard deviation is 1.59% and beta is 0.7794 and R-squared is less than 1o It is low risky fund.o Portfolio turnover ratio is higher so that this fund is costlier in term of


TATA EQUITY OPPORTUNITY FUND

o It is an equity-diversified fund.o It is an open -ended equity schemeo The beta coefficient is more than 1, that implies the security is more volatile than

the market.

o This fund is risky and overall return grade is below average.o Portfolio turnover ratio is higher so that this fund is costlier in term of


SUNDARAM BNP PARIBAS LEADERSHIP FUND

o It is an equity-diversified fund.o It is an open -ended equity schemeo The beta coefficient is more than 1, that implies the security is more volatile than

the market.


54/55

o This fund is risky and overall return grade is average.o R squared is lies between 0.85 to1 that indicates that the fund performance pattern

have been in line with the index

KOTAK OPPORTUNITY FUND

o It is an equity diversified open- ended schemeo R squared is lies between 0.85 to1 that indicates that the fund performance pattern

have been in line with the index.o Portfolio turnover ratio is higher so that this fund is costlier in term of

commission, fee etc.o The beta coefficient is more than 1, that implies the security is more volatile than

the market.

o This funds risk grade is above average and overall return is average.

BIRLA SUN LIFE '95 FUND

o It is an equity oriented open- ended scheme.o The beta coefficient is equal to 1, that implies the security is more volatile than

the market.o This funds risk grade is above average and overall return is average.o The fund performance pattern have been in line with the index.

RECOMMENDATION

After going through a two months summer training and survey, I have come to knowabout different aspects of mutual funds and mutual funds industry. India is an emergingmarket. Consumption level is rising with rising earning level. Economic indicators microand macro both show a sky facing arrows. Data shows that there will be more number ofbillionaires from India than any of other country.

We know that Indians are earning more therefore spending more, but how much theysave/invest in order to secure future. There are numbers of traditional ways of saving.They give guaranteed return with low risk. High risk associated investment options wasnot considered a right decision. India is a young country having a considerably big part ofyoung people. They are more risk taker. They need a right direction for investmentoptions. This study and survey on mutual funds is a small eye hole to see the picture ofmutual funds industry in India. This provides almost clear view to the readers.


55/55

Mutual funds industry is enlarging its size in India. JVs, foreign JVs and acquisitions arein trend. AUM has gone to $8 trillion, number of investors is rising, and number ofAMCs is going up. These changes are likely to happen. Indian monetary policy issupporting new business. Private sector is aggressively participating in mutual fundsbusiness. Numbers of schemes are much more than earlier.

With such shining sides, double digit inflation rate, bearish stock market, RBIs high bank rates, squeezing liquidity and other dark sides putting pressure on consumerssaving. This situation pushes investors back from investment. They wait and hold cashrather than investing. This study found that investors are willing to invest with high rateof return. They know high return always adhere to high risk but market still is not incorrection mode. It will take time.

Indian market potential is high, investors are willing to pour money in mutual funds,despite some temporary restraints, and other economic factors are in favorable mode.Thus we need proper management of advisory services, more schemes, financial advisors

and institutions to cater untouched markets.

Industry need to revise its business strategy. Investors perception is not prioritized yet.Instead of completing targets, advisors working under institutions should consider therequirement of investors. We need to change pattern of selling mutual funds schemes.I hope this study will help readers to identify industrys unidentified areas where theyneed to work out.

final report of mf

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