sbi study mutual funds

7/31/2019 SBI STUDY Mutual Funds

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A PROJECT REPORT

ON

COMPARITIVE ANALYSIS OF TOP FIVE ELSS MUTUAL FUNDS IN

INDIA

IN

SBI MUTUAL FUNDS, DELHI

Under The Guidance of

Mr. S

Report Submitted by,

P

For the partial fulfillment of

MASTERS IN BUSINESS ADMINISTRATION (2009-11)

UNIVERSITY INSTITUTE OF MANAGEMENT

BANGALORE


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ACKNOWLEDGEMENT

I express my gratitude to Mr. S,Chief Manager, SBI Mutual Fund,

Industrial Service Centre, New Delhi, who helped as my guide and provide

his valuable support in the completion of my project.

It has been a great and valuable experience for me and I was able to get a clear

idea of the budgeting system of the company. This experience will be of greathelp in my future.

I would like to pay my gratitude to SBI MUTUAL FUNDS, which gave me a

chance to undergo the summer training in Analysing the Mutual Fund Market

scenario in India.

Finally, I would like to thankChrist University Institute of Management,

Bangalore for providing me an opportunity to do the summer internship project

in a company of my interest.

Thanking you,

P


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TABLE OF CONTENTS

Chapter 1

INTRODUCTION1.1 DEFINTION & CONCEPT

1.2 ADVANTAGES OF MUTUAL FUND

1.3 DISADVANTAGES OF MUTUAL FUND

1.4 FREQUENTLY USED TERMS

1.5 HISTORY

1.6 TYPESOF MUTUAL FUND

Chapter 2ORGANIZATIONAL STRUCURE

2.1 ROLE OF SPONSOR

2.2 ROLE OF BOARD OF TRUSTEES

2.3 ROLE OF ASSET MANAGEMENT COMPANY

2.4 ROLE OF CUSTODIAN

2.5 ROLE OF REGISTRAR & TRANSFER AGENT

Chapter 3COMPANY PROFILE & OVERVIEW

3.1 COMPANY PROFILE

3.2 FUNDS EXPERTISE

3.3 ACHIEVEMENTS & AWARDS

Chapter 4 - RESEARCH OBJECTIVES AND SCOPE OF RESEARH

PROJECT

4.1 OBJECTIVE OF THE STUDY

4.2 SCOPE OF STUDY


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4.3 METHODOLOGY

4.4 SOURCES OF DATA

4.5 LIMITATIONS OF STUDY

4.6 PERIOD OF THE STUDY

4.7 CORPORATE OFFICE

Chapter 5ELSS FUNDS

5.1 What are ELSS Funds..??

5.2 Top 5 ELSS funds in Indian Manrket

5.2.1 SBI MAGNUM TAX GAIN

5.2.2 SAHARA TAX GAIN

5.2.3 HDFC TAX SAVER

5.2.4 SUNDARAM PNB PARIBAS TAXSAVER

5.2.5 ICICI PRUDENTIAL TAX PLAN

Chapter 6LEARNING EXPERIENCE

Chapter 7CONCLUSION

Chapter 8 - BIBLIOGRAPHY


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CHAPTER 1

INTRODUCTION


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1.1 MUTUAL FUND : DEFINITION AND CONCEPT

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 realised 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 flow chart below describes broadly the working of a

mutual fund:


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1.2 ADVANTAGES OF MUTUAL FUNDS

The advantages of investing in a Mutual Fund are:

Professional Management Diversification Convenient Administration Return Potential Low Costs Liquidity Transparency Flexibility Choice of schemes Tax benefits Well regulated

1.3 DISADVAN TAGES OF MUTUAL FUNDS

The Disadvantages of Investing through Mutual Funds over Direct Investments

No Control Over Cost No tailor Made portfolios Managing a portfolio Funds


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1.4FREQUENTLY USED TERMS

(i) 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.

(ii) Sale Price

Is the price you pay when you invest in a scheme. Also called Offer Price. It may include

a sales load.

(iii) Repurchase Price

Is the price at which units under open-ended schemes are repurchased by the Mutual

Fund. Such prices are NAV related.

(iv) Redemption Price

Is the price at which close-ended schemes redeem their units on maturity. Such prices are

NAV related.

(v) Sales Load

Is a charge collected by a scheme when it sells the units. Also called, Front -end load.

Schemes that do not charge a load are called No Load schemes.


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1.5 HISTORY OF MUTUAL FUND IN INDIA

History of the Indian Mutual Fund Industry 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 of India. The history of mutual funds in India can be broadly divided into four

distinct phasesFirst Phase1964-87 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 Phase1987-1993 (Entry of Public Sector Funds)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 Phase1993-2003 (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 MutualFund 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 Phasesince 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


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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, 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. The graph indicates the growth of assets over the

years.

Note

:

Erstwhile UTI was bifurcated into UTI Mutual Fund and the Specified Undertaking of the

Unit Trust of India effective from February 2003. The Assets under management of the

Specified Undertaking of the Unit Trust of India has therefore been excluded from the total

assets of the industry as a whole from February 2003 onwards.


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1.6 TYPES OF MUTUAL FUND

Mutual Fund can be classified as :

Close Ended / Open Ended Funds

Loan Fund / No-Load Funds Tax-Exempt / Non-Tax exempt Funds

Open-ended fund or scheme :

An open-ended fund or scheme is one that is available for subscription and repurchase on a

continuous basis. These schemes do not have a fixed maturity period. Investors can

conveniently buy and sell units at Net Asset Value (NAV) related prices which are declared

on a daily basis. The key feature of open-end schemes is liquidity.

CGISHs composite performance ranking (CPR) measures the performance for each of the

open-ended scheme of Mutual Fund. There are four parameters considered to measure the

performance of a mutual fund such as Risk-adjusted returns of the schemes NAV,

Diversification of Portfolio, Liquidity and Asset Size.

Closed-end Fund/scheme:

A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is

open for subscription only during a specified period at the time of launch of the scheme.

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 the units 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 exist routes is provided to the investor

i.e. either repurchase facility or through listing on stock exchanges. These mutual funds

schemes disclose NAV generally on weekly basis.

Schemes according to investment objective :

A scheme can also be classified a growth scheme, income scheme, or balanced scheme

considering its investment objective. Such schemes may be open-ended or close-endedschemes as described earlier. Such schemes may be classified mainly as follows.


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Growth / Equity Oriented Scheme :

The aim of growth funds is to provide capital appreciation over the medium to long-term.

Such schemes normally invest a major part of their corpus in equities. Such funds have

comparatively high risks. These schemes provide different options to the investors like

dividend option, capital appreciation, etc. and the investors may choose an option depending

on their preferences. The investors must indicate the option in the application form. The

mutual funds also allow the investors to change the options at a later date Growth schemes

are good for investors having a long-term outlook seeking appreciation over a period of time.

Income / Debt Oriented Scheme :

The aim of income funds is to provide regular and steady income to investors, Such schemesgenerally invest in fixed income securities such as bond, corporate debentures. Government

securities and money market instruments. Such funds are less risky compared to equity

schemes. These funds are not affected because of fluctuations in equity markets, hOwever,

opportunities of capital appreciation are also limited in such funds. The NAVs of such funds

are affected because of change in interest rates in the country. If the interest rates fall, NAVs

of such funds are likely to increase in the short run and vice versa. However, long term

investors may not bother about these fluctuations.

Balanced Fund :

The aim of balanced funds is to provide both growth and regular income as such schemes

invest both in equities and fixed income securities in the proportion indicated in their offer

documents. These are appropriate for investors looking for moderate growth. They generally

invest 40-60% in equity and debt instruments. These funds are also affected because of

fluctuations in share prices in the stock markets. However, NAVs of such funds are likely to

be less volatile compared to pure equity funds.

Money Market or Liquid Fund :

These funds are also income funds and their aim is to provide easy liquidity, preservation of

capital and moderate income. These schemes invest exclusively in safer short-term

instruments such as treasury bills, certificates of deposit, commercial paper and inter-bankcall money, government securities, etc. Returns on these schemes fluctuate much less


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compared to other funds. These funds are appropriate for corporate and individual investors

as a means to park their surplus funds for short periods.

Gilt Fund :

These funds invest exclusively in government securities. Government securities have no

default risk. NAVs of these schemes also fluctuate due to change in interest rates and other

economic factors as is the case with income ordebt oriented schemes.

Index Funds :

Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index,

S&P NSI. 50 index (Nifty), etc. These schemes invest in the securities in the same weightage

comprising of an index. NAVs of such schemes would rise or fall in accordance with the rise

or fall in the index, though not exactly by the same percentage due to some factors known as

tracking error in technical terms. Necessary disclosures in this regard are made in the offer

document of the mutual fund scheme


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CHAPTER 2

ORGANIZATIONAL

STRUCTURE


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Atleast 50% of Directors of AMC to be independent. AMC can be terminated/changed with

the consent of

Majority of Trustees or At least 75% majority of Unit Holders

Following are the basic activities of an AMC :

Asset Management Services Portfolio Management Services Portfolio Advisory Services

ROLE OF AMC

AMC is the fund Manager for Managing Mutual Fund Assets. AMC floats different MF

schemes. AMC are accountable to the Trustees.AMC works on fee based system which are

subjected to ceiling prescribed by SEBI.

2.4 ROLE OF A CUSTODIAN

Custodian is appointed by Board of Trustees. Custodian keeps the record of Securities and

Investments. It collects benefits under Securities. A sponsor and a Custodian cannot be same

identity needs to be different. A custodian needs to be registered with SEBI.

2.5 ROLE OF REGISTRAR & TRANSFER AGENT

Registrar Issues, redeems, transfers units of MF scheme. They keep unit Holders A/Cs upto

date. Registrar and transfer agent both needs to be registered with SEBI.


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CHAPTER 3

SBI MUTUAL FUNDS :

COMPANY PROFILE &

OVERVIEW


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3.1 COMPANY PROFILESBI MUTUAL FUNDS

Proven Skills in Wealth Generation.SBI Mutual Fund is Indias largest bank sponsored mutual fund and has an enviable track

record in judicious investments and consistent wealth creation.

The fund traces its lineage to SBI - Indias 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.

SBI Mutual Fund is a joint venture between the State Bank of India and Socit Gnrale

Asset Management, one of the worlds leading fund management companies thatmanages over US$ 500 Billion worldwide.

Exploiting expertise, compounding growthIn twenty years of operation, the fund has launched 38 schemes and successfully

redeemed fifteen of them. In the process it has rewarded its investors handsomely with

consistent returns.

A total of over 5.8 million investors have reposed their faith in the wealth generation

expertise of the Mutual Fund.

Schemes of the Mutual fund have consistently outperformed benchmark indices and have

emerged as the preferred investment for millions of investors and HNIs.

Today, the fund manages over Rs. 38,782 crores of assets and has a diverse profile of

investors actively parking their investments across 38 active schemes.

The fund serves this vast family of investors by reaching out to them through network of

over 130 points of acceptance, 28 investor service centers, 46 investor service desks and

56 district organisers.

SBI Mutual is the first bank-sponsored fund to launch an offshore fundResurgent India

Opportunities Fund.

Growth through innovation and stable investment policies is the SBI MF credo.


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3.2 FUND HOUSE EXPERTISE

The investment environment is becoming increasingly complex. Innumerable parameters

need to be factored in to generate a clear understanding of market movement and

performance in the near and long term future.

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

insights into market movements. We consistently push the envelope to ensure our investors

get the maximum benefits year after year.

Research - the backbone of our Performance

Our expert team of experienced and market savvy researchers prepare comprehensive

analytical and informative reports on diverse sectors and identify stocks that promise high

performance in the future.

This team works in tandem with a compliance and risk-monitoring department, which

ensures minimisation of operational risks while protecting the interests of the investors.

Quite naturally many of our equity funds have delivered consistent returns to investors and

have repeatedly out performed benchmark indices by wide margins.


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3.3 AWARDS AND ACHIEVEMENTS

Our expertise and excellent performance is frequently recognized by the mutual fund

industry.

SBI Mutual Fund (SBIMF) has been the proud recipient of the ICRA Online Award - 8 times,

CNBC TV - 18 Crisil Award 2006 - 4 Awards, The Lipper Award (Year 2005-2006) and

most recently with the CNBC TV - 18 Crisil Mutual Fund of the Year Award 2007 and 5

Awards for our schemes.

2010 - ICRAMUTUAL FUND AWARDS 2009

o ICRAMUTUAL FUND AWARDSo LIPPER AWARDTHE LIPPER INDIA FUNDS AWARDS

2008o OUTLOOK MONEYNDTV PROFITS AWARDSo ICRAMUTUAL FUND AWARDSo LIPPER AWARDTHE LIPPER INDIA FUNDS AWARDS

2007o CNBCAWAAZ CONSUMER AWARDSo CNBC TV18CRISILMUTUAL FUND OF THE YEAR AWARDo OUTLOOK MONEYNDTV PROFITS AWARDSo ICRAMUTUAL FUND AWARDSo LIPPER AWARDTHE LIPPER INDIA FUNDS AWARDS

2006o CNBCAWAAZ CONSUMER AWARDSo CNBC TV18CRISILMUTUAL FUND OF THE YEAR AWARD


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o OUTLOOK MONEYNDTV PROFITS AWARDSo ICRAMUTUAL FUND AWARDSo LIPPER AWARDTHE LIPPER INDIA FUNDS AWARDS

3.4 CORPORATE OFFICE

191, Maker Tower 'E', Cuffe Parade,

Mumbai - 400 005

Tel : +91 22 22180221

Fax : +91 22 22189663

Email : [email protected]


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CHAPTER 4

RESEARCH OBJECTIVES

AND

SCOPE OF RESEARH

PROJECT


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4.1 OBJECTIVE OF THE STUDY

The objective of the study is to Compare Top 5 ELSS funds available in Market by

different AMC and enlist their features and Facts.

4.2 SCOPE OF THE STUDY

The scope of the study is to show the growing market for mutual funds products in the Indian

Market. Also how can an investment in any Mutual fund could help an individual in saving

tax and get exemption from IT department.

4.3 METHODOLOGY

The methodology used is basically explorative type, where the study has been based under

available financial data and discussion with the Fund managers & Market Watch officials.

4.4 SOURCES OF DATA

The sources of information in this projec were :-

Primary Data

Primary data has been obtained from the discussion with the Fund and Portfolio managers.

Secondary Data

Mostly the secondary data were used in conducting the study. They were

a) Records and Research Files of SBI

b) Official documents

c) Website of SBI Mutual Funds

d) Press release of SBI Mutual Funds


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4.5 LIMITATION OF THE STUDY

The only Limitation of my study which I observed was that the performance of each Fundwas dependent on condition of Stock market. A thorough knowledge about the share market

& its whereabouts is also very necessary.

4.6 PERIOD OF THE STUDY

The period of study which I have selected under my project is not fixed for each Fund. It may

vary depending upon the date of establishment for that product. I have analysed theperformance of each fund from date of its start or past 5 years, whichever is earlier &

compared them with each other.


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CHAPTER 5

ELSS MUTUAL FUNDS


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5.1ELSS FUNDS - What Are ELSS Funds ?

As the name suggests ELSS (equity linked savings scheme), invests primarily in equity

shares of companies. As per financial regulations, the scheme Fund manager has to invest

80% of the total amount in the equity shares and the remaining 20% per cent can be invested

in other instruments like bonds, debentures, government securities and others. When you

invest in ELSS your money is locked for a period of three years (minimum). Once you invest

in tax saver funds you cannot withdraw the amount for three years, this acts as a blessing in

disguise as tax saving funds generally yield high returns during a 3year period. The common

man is basically afraid of investing his money in equity shares as he is afraid of loosing

money. But a look at the recent past shows that investors who have invested in tax saver

funds have never lost out on their money, rather tax saver funds have been the front runners

in terms of returns to investors. A small illustration will clarify comprehensions.

If you make an investment of Rs 1,00,000/ ( 1 lac), then under section 80c this complete

amount is deducted from your gross income for that particular year. If your annual income

puts you in the highest tax paying zone, i.e -34%, then the investment of Rs 1,00,000/ will

ensure that you get an annual tax deduction of Rs, 34,000/. So logically speaking you invest

Rs 66,000/ considering the deduction. Assuming that the Mutual Fund declares an annual

dividend of 10% then your total return on Rs 66,000 is [(10,000/66000)* 100] = 15.15%.

This particular dividend earned is also tax-free, hence more profit. Another profitable venture

out of this investment is that after a period of 3 years the capital gain that you obtain out of

the investment is also tax-free. This is what makes ELSS the most attractive investment for

those who have the appetite for moderate risk. However, prior to making an investment

selecting a good fund house based on its reputation and track record is important. ELSS are

considered to be the best tax saving mutual funds in India. ELSS is a good option to save tax

and generate long term capital gains. These gains are obtained from the equity market only if

you are investing in a long time horizon. Adding money in a disciplined manner creates a

good corpus. The basic confusion that the average investor could have is that they consider

Equity Mutual Funds and ELSS to be the same, which in true sense isnt correct. Normal

equity funds could be purchased today and disposed off tomorrow. Incase of ELSS there is a

compulsory 3 year lock in period. As per the rules related to long-term capital gains, profit

from equity MFs after one year becomes tax-free.


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5.2 TOP FIVE ELSS FUNDS IN INDIAN MARKET :

i. SBI MAGNUM TAX GAIN

ii. SAHARA TAX GAIN

iii. HDFC TAX SAVER

iv. SUNDARAM BNP PARIBAS TAXSAVER

v. ICICI PRUDENTIAL TAX PLAN

5.2.1 SBI MAGNUM TAX GAIN

5.2.1.1 Current Stats & Profile

Latest NAV - 57.76 (20/04/10) 52-Week High - 59.25 (06/01/10) 52-Week Low - 34.33 (22/04/09) Fund Category : Equity: Tax Planning Type : Open End Launch Date : March 1993 Risk Grade : Below Average Return Grade : Average Net Assets (Cr) : 5,347.97 (31/03/10) Benchmark : BSE 100


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5.2.1.2 Trailing Returns

As on 20 Apr 2010 Fund Category

Year to Date -0.02 3.07

1-Month 0.02 1.85

3-Month - 1.08 1.22

1-Year 65.55 72.24

3-Year 9.16 10.18

5-Year 25.72 20.64

Return Since Launch 19.44 --

Returns upto 1 year are absolute and over 1 year are

annualised.

5.2.1.3 Best and Worst Performance

Best (Period) Worst (Period)

Month 60.94 (03/12/1999 - 04/01/2000) -52.41 (31/03/2000 - 02/05/2000)

Quarter 117.12 (03/12/1999 - 03/03/2000) -61.55 (25/02/2000 - 26/05/2000)

Year 371.36 (05/03/1999 - 06/03/2000) -74.61 (13/03/2000 - 13/03/2001)

5.2.1.4 ANNUAL RETURNS

YEAR 2009 2008 2007 2006 2005

Fund Return 86.42 -54.86 55.27 44.96 96.06

Rank In Category 13/32 14/29 16/26 23-Jan 20-Jan

Category Average 81.79 -55.56 59.25 30.18 50.08

S&P CNX Nifty 75.76 -51.79 54.77 39.83 36.34

Sensex 81.03 -52.45 47.15 46.7 42.33


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5.2.1.5 QUATERLY RETURNS

Q1 Q2 Q3 Q4

2010 0.05 -- -- --

2009 -0.26 47.69 18.58 6.72

2008 -25.6 -17.06 -4.58 -23.33

2007 -4.07 13.48 15.68 23.29

2006 20 -11.85 16.38 17.75

2005 15.51 22.48 27.6 8.6

2004 -6.67 -6.59 30.81 34.98

2003 -15.3 33.55 33.19 54.7

2002 10.48 4.63 -13.6 5.62

2001 -37.7 -3.88 -24.2 20.02

2000 28.4 -43.87 -13 -14.84

1999 57.46 2.16 53.72 73.951998 11.29 -12.02 16.21 -1.01


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5.2.1.6 ANALYSIS

Magnum Taxgain has generated a bit of an up-and-down performance

In the seven years spanning 1996 to 2002, the fund underperformed the

category average every single year, barring 1999 when it delivered a

mesmerizing 330 per cent (category average: 219%). However, from 2003

onwards, it has been on steroids. After an excellent performance that year, it

was the best performing fund in its category till 2006. But the year 2007 proved

to be a dent in its performance when the fund was not even in the top two

quartiles. However in the meltdown of 2008, it managed to get away with an

average fall.

The fund manager tends to tilt towards growth stocks, but sticks largely to a

buy-and-hold strategy without overlooking opportunistic bets. But recently, the

fund has undergone a transformation into a more conservative offering.

The fund has increased allocation to cash and debt from 2006 onwards. While

the mid- and small-cap allocation began to decrease that year, the fund took on

a large-cap orientation towards the middle of 2007. Simultaneously, the fund

also broadened its portfolio. It was from 2006 onwards that it really changed

when it rose from a holding of 51 stocks to 77 by 2007. The top five holdings

too are not as concentrated.

These changes hindered the fund's performance in 2007. In the bear hug of 2008

and first quarter of 2009, it once again took refuge in debt and cash. While it

witnessed an average fall last year, it succeeded in falling less than the category

in the first quarter this year.


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In the recent rally from March 9 - June 30, 2009, the fund has managed to beat

its category, although by a small margin. Its timely shift to equity and presence

in metals, financial and engineering sectors helped it gain 68 per cent (category:

67%).

Its conservative tilt may appeal to investors looking for a tax saving avenue in

turbulent market conditions.

5.2.1.7 Returns and Risk Aggregates

Rating & Risk

Fund Rating ***

Fund Risk Grade Below Average

Fund Return Grade Average

Modern Portfolio Stat

R-Squared 0.98

Alpha 0.13

Beta 0.88

Volatility Measures

Mean 16.13

Standard Deviation 34.92%

Sharpe Ratio 0.39


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5.2.2 SAHARA TAX GAIN

5.2.2.1Current Stats & Profile

Latest NAV : 33.8336 (21/04/10)

52-Week High : 33.8371 (09/04/10) 52-Week Low : 18.6978 (28/04/09) Fund Category : Equity: Tax Planning Type : Open End Launch Date : March 1997 Risk Grade : Average Return Grade : Above Average Net Assets (Cr): 9.41 (31/03/10) Benchmark : BSE 200



Year to Date 2.32 3.72

1-Month 4.10 2.49

3-Month 4.32 4.08

1-Year 75.98 74.33

3-Year 18.49 10.39

5-Year 25.72 20.48


Returns upto 1 year are absolute and over 1 year are annualised.


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Top Holdings As on 31 Mar

Name of Holding % Net Assets

Bajaj Auto 4.22

ICICI Bank 3.79

Aurobindo Pharma 3.72

Reliance Industries 3.72

ITC 3.58

Top 5 Sectors % Net Asset

As on 31/03/2010

FMCG 17.85

Health Care 16.94

Financial 14.96

Energy 12.32

Automobile 11.74



Month 49.95 (13/03/1998 - 17/04/1998) -32.18 (09/02/2001 - 13/03/2001)

Quarter 103.71 (19/11/1999 - 18/02/2000) -43.56 (25/02/2000 - 26/05/2000)

Year 294.09 (24/12/1998 - 24/12/1999) -69.29 (12/04/2000 - 12/04/2001)


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2009 2008 2007 2006 2005

Fund Return 90.57 -49.56 64.65 25.64 50.3

Rank In Category 7/32 5/29 10/26 18/23 8/20


S&P CNX Nifty 75.76 -51.79 54.77 39.83 36.34

Sensex 81.03 -52.45 47.15 46.7 42.33

5.2.2.5 QUATERLY RESULTS

Q1 Q2 Q3 Q4

2010 -1.13 -- -- --

2009 -3.45 51.31 25.17 4.23

2008 -27.88 -15.7 -0.7 -16.45

2007 -7.84 18 14.04 32.77

2006 20.45 -16.54 14.52 9.14

2005 -2.9 9.41 32.82 6.52

2004 -8.68 -8.51 18.25 21.95

2003 -8.38 14.48 34.49 39.84

2002 9.34 -3.22 -8.77 11.1


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5.2.2.6 ANALYSIS

Sahara Tax Gain has an asset size of Rs. 8.77 crore spread over a portfolio of 32

stocks. The fund was launched in April, 97 and thus it has withered many

market phases. The fund has limited its investment to less than 5% in anyindividual stock. The fund is mainly largecap based given its high exposure of

71.74% in large-cap stocks (Market capitalisation > Rs. 5000 crores) followed

by 25.22% in Mid-caps and 3.04% in Smallcaps and the top-ten holdings

constitutes 32.06% of the total assets. The assets are allocated between equity

and cash with no investment in debt. The proportion of asset invested in equity

& cash equivalents being 83.57% & 16.43% respectively. The sector allocation

is also very conservative and its top investments are in FMCG, Financial,

Energy, Technology, Healthcare aggregating to 62.23%. Sahara Tax Gain Fund-Growth has been ranked among the Top 10 best performing equity schemes in

the world over, as per Lipper global fund data. The scheme also has the facility

of SIP (Systematic Investment Plan) offered to its investors to counter volatility

and invest regularly to benefit from the growth. The fund is a defensive fund

considering its Beta of less than market. The expense ratio of the fund is

moderate considering that the portfolio was churned in the last one year.


Rating & Risk

Fund Rating ****

Fund Risk Grade Average

Fund Return Grade Above Average


R-Squared 0.94

Alpha 8.27

Beta 0.97

Volatility Measures

Mean 22.73


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Standard Deviation 35.53

Sharpe Ratio 0.51


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5.2.3 HDFC TAX SAVER


Latest NAV : 209.581 (23/04/10)

52-Week High : 210.919 (09/04/10)

52-Week Low : 109.318 (28/04/09)

Fund Category : Equity: Tax Planning

Type : Open End

Launch Date : March 1996

Risk Grade : Below Average

Return Grade : Above Average

Net Assets (Cr) : 2,290.57 (31/03/10)

Benchmark : S&P CNX 500

5.2.3.2 Trailing Return



1-Month 2.62 3.56

3-Month 6.74 5.77

1-Year 90.51 73.99

3-Year 14.00 10.65

5-Year 25.00 20.44




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5.2.3.3 Portfolio Summary



ICICI Bank 5.48

Dr. Reddy's Lab 4.45

Crompton Greaves 4.43

Sun Pharmaceutical Inds. 4.18

State Bank of India 4.11

Top 5 Sectors % Net Asset As on 31/03/2010

Financial 20.13

Health Care 16.00

Energy 9.44

Technology 9.36

Engineering 8.87


2009 2008 2007 2006 2005

Fund Return 99.07 -51.55 39.44 34.12 74.84

Rank In

Category 3/32 8/29 24/26 10/23 2/20Category

Average 81.79 -55.56 59.25 30.18 50.08

S&P CNX Nifty 75.76 -51.79 54.77 39.83 36.34

Sensex 81.03 -52.45 47.15 46.7 42.33


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Q1 Q2 Q3 Q4

2010 4.39 -- -- --

2009 -1.93 51.17 24.92 7.48

2008 -25.58 -16.82 4.93 -25.41

2007 -8.62 16.92 11.97 16.56

2006 20.13 -12.22 14.31 11.26

2005 8.13 15.63 27.14 9.992004 -4.07 -5.9 30.66 26.65



Month 34.19 (15/12/1999 - 14/01/2000) -32.30 (26/09/2008 - 27/10/2008)

Quarter 78.93 (09/03/2009 - 10/06/2009) -39.75 (02/09/2008 - 02/12/2008)

Year 272.59 (24/02/1999 - 24/02/2000) -55.57 (03/12/2007 - 02/12/2008)


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Rating & Risk

Fund Rating **** (4 star)

Fund Risk Grade Below Average


Modern Portfolio Statistics

R-Squared : 0.94

Alpha : 4.05

Beta : 0.93

Volatility Measures

Mean : 20.14

Standard Deviation : 34.13

Sharpe Ratio : 0.45

5.2.3.8 ANALYSIS

The best fund in good and bad times.

HDFC Taxsaver continues to be the first choice in the category of tax-planning

funds. In its history spanning over 10 years, the fund has displayed tremendous

ability to race ahead during the good times, while protecting the downside well

when the markets fell.

The fund has been doing this consistently year after year.

Its glorious performance also gets reflected in its star ratingsit has never been

rated below four-star in the 82 months of its rated life. In the nine completed

calendar years of its existence, the fund marginally under-performed its

category only in 2002, while beating an average peer by more than 10 per cent

in each of the remaining years. This year, the fund is up 26.68 per cent as on

April 7, ahead of an average peers 22.72 per cent.

Some smart stock picks and some quality sector moves enabled this fund tosteer clear of the technology collapse with ease. The fund booked profits and


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reduced exposure to the technology sector at the right time before the market

turned bearish in March 2000. With the exposure to tech sector down from

35.19 per cent in previous month to 12.2 per cent, the fund was sitting

comfortably with 41.9 per cent of its assets in cash when the meltdown began.

Though it erred in re-entering the sector a bit too early, the key contributor to

the positive returns generated by the fund in 2000 was Raymond Ltd, its top

holding (accounting for more than 10 per cent) from August 2000 till February

2001. While the markets were bleeding, the stock price doubled from Rs 70 in

May 2000 to Rs 140 by February 2001. A high exposure to fast moving

consumer goods (FMCG) stocks would have also helped. Then in 2001, the

funds dependence on pharma stocks and some select companies, like Ashok

Leyland and Associated Cement Companies, saved the day for this fund. An

average 10 per cent investment in bonds from the second quarter of 2000 till

mid 2001 also provided a good cushion to this star fund.

The fund has been quite selective in its picks in which it invests with

conviction. The number of stocks in the portfolio is generally restricted to 20-25

(though of late, that has gone up to 30), with the top five accounting for more

than 30 per cent. Hindustan Zinc is the funds top holding. After making the full

use of the mid-cap rally in the last two-and-a-half years or so, the fund has

started to get back to large-caps.

In short, HDFC Taxsaver is an apt core holding for an equity portfolio.


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5.2.4SUNDARAMBNP PARIBAS TAXSAVER-G


Latest NAV 42.5166 (30/04/10)

52-Week High 43.9725 (06/01/10)

52-Week Low 26.9263 (11/05/09)

Fund Category Equity: Tax Planning

Type Open End

Launch Date November 1999

Risk Grade Average

Return Grade Above Average

Net Assets (Cr) 1,283.66 (31/03/10)

Benchmark BSE 200


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1-Month 3.36 2.88

3-Month 6.52 9.28

1-Year 61.87 72.44

3-Year 15.58 10.38

5-Year 26.23 20.96







Adani Power 4.19

State Bank of India 3.66

ONGC 3.62

Aban Offshore 3.60


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As on 31/03/2010

Energy 26.37

Financial 18.31

Construction 6.76

Engineering 6.60

Health Care 5.58

5.2.4.4Best and Worst Performance


Month 34.04 (28/04/2009 - 28/05/2009) -34.05 (15/05/2006 - 14/06/2006)

Quarter 74.93 (09/03/2009 - 10/06/2009) -32.65 (24/02/2000 - 25/05/2000)

Year 112.20 (02/01/2003 - 02/01/2004) -49.92 (14/01/2008 - 13/01/2009)


2009 2008 2007 2006 2005

Fund Return 72.02 -47.58 68.38 31.97 59.61

Rank In Category 25/32 2/29 7/26 11/23 5/20


S&P CNX Nifty 75.76 -51.79 54.77 39.83 36.34

Sensex 81.03 -52.45 47.15 46.7 42.33


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Q1 Q2 Q3 Q4

2010 -2.72 -- -- --

2009 -7.87 45.53 24.69 2.9

2008 -28.95 -10.12 -3.3 -15.1

2007 -6.05 11.7 20.22 33.46

2006 18.92 -16.5 13.92 16.66

2005 0.04 7.98 27.54 15.85

2004 -11.83 -5 31.45 30.58

2003 -4.52 23.93 27.2 37.66

2002 13 1.96 -8.01 8.59

2001 -13.64 -1.28 -17.17 20.72

2000 14.17 -14.88 -13.64 -2.38

1999 -- -- -- --


Rating & Risk

Fund Rating ****




R-Squared --

Alpha 6.86

Beta .91

Volatility Measures

Mean 24.83


Sharpe Ratio 0.58


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5.2.5 ICICI PRU TAX PLAN-G


Latest NAV 130.84 (30/04/10)

52-Week High 130.84 (30/04/10)

52-Week Low 67.13 (11/05/09)

Fund Category Equity: Tax Planning

Type Open End

Launch Date August 1999

Risk Grade Average

Return Grade Above Average

Net Assets (Cr) 1,123.08 (31/03/10)

Benchmark S&P CNX Nifty


As on 30 Apr 2010Fund Category

Year to Date

1-Month

3-Month

1-Year

3-Year

5-Year

Return Since Launch

7.52

2.75

10.06

101.35

14.24

22.56

27.08

4.60

2.88

9.28

72.44

10.38

20.96

--



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Infosys Technologies 5.58

Sterlite Industries 4.92

Bharti Airtel 4.80

Cadila Healthcare 4.59


As on 31/03/2010

Energy 18.34

Financial 14.33

Technology 11.90

Engineering 9.48

Health Care 8.34



Month 41.05 (03/12/1999 - 04/01/2000) -38.84 (11/04/2000 - 12/05/2000)

Quarter 85.19 (22/11/1999 - 22/02/2000) -55.59 (22/02/2000 - 23/05/2000)

Year 158.38 (05/03/2009 - 05/03/2010) -57.93 (13/03/2000 - 13/03/2001)


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2009 2008 2007 2006 2005

Fund Return 112 -56.03 40.95 26.15 68.8

Rank In Category 1/32 16/29 22/26 17/23 3/20


S&P CNX Nifty 75.76 -51.79 54.77 39.83 36.34

Sensex 81.03 -52.45 47.15 46.7 42.33

5.2.5.6 QUATRELY RESULTS

Q1 Q2 Q3 Q4

2010 4.64 -- -- --

2009 -0.91 51.11 25.62 12.71

2008 -28.95 -9.83 -7.51 -25.78

2007 -10.92 13.19 7.89 29.56

2006 18.23 -15.75 23.35 2.68

2005 8.92 13.24 28.84 6.22

2004 -18.36 -3.23 32.76 30.09

2003 -10.13 43.79 40.24 38.14

2002 15.86 1.69 -13.24 10.99

2001 -13.41 0.68 -13.46 24.67

2000 6.97 -34.73 -7.42 -8.09

1999 -- -- -- 55.78


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Rating & Risk

Fund Rating ***



Modern Portfolio Statistics

R-Squared 0.87

Alpha 5.60

Beta 0.97

Volatility Measures

Mean 20.09


Sharpe Ratio 0.42


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COMPARISON OF THESE FUNDS

Fund

Sundaram BNPParibas TaxSaver

Sahara TaxGain

Magnum TaxGain HDFC Taxsaver

Launch Date Nov-99 Mar-97 Mar-93 Mar-96

Value Research Rating (Nov 2009) 4 Star 4 Star 4 Star 4 Star

OM Morningstar Rating (May 09) 5 Star NR 4 Star 4 Star

ET Quartely MF Tracker (Sept' 09) Gold Platinum Gold Silver

Risk Grade Below Avg. Avg. Below Avg. Below Avg.

Return Grade Above Avg. Above Avg. Above Avg. Above Avg.

large-cap mid-caps large-cap large-cap

Trailing Returns (30 Nov 09)

--1 YR 81.18 94.06 94.81 108.73

--3YR (CAGR) 14.97 15.47 8.5 9.09

--5YR (CAGR) 28.74 25.62 32.8 27.71

--7YR (CAGR) 37.92 32.14 44.98 40.15

--10YR (CAGR) 23.37 15.6 19.1 29.36

Rank

--1 YR 20 / 30 12 / 30 10 / 30 4 / 30--3YR 4 / 26 3 / 26 10 / 26 8 / 26

--5YR 2 / 20 5 / 20 1 / 20 4 / 20

--7YR 3 / 19 8 / 19 1 / 19 2 /19

--10YR 3 / 15 11 / 15 7 / 15 1 / 15

Calender Year Returns

--2009 (Till 30 Nov' 09) 66.31 82.19 79.15 91.83

--2008 -47.58 -49.56 -54.86 -51.55

--2007 68.38 64.65 55.27 39.44

--2006 31.97 25.64 44.95 34.12

--2005 59.61 50.3 96.06 74.84

Rank

--2009 25/32 7 / 32 12 / 32 3 / 32

--2008 2 / 29 5 / 29 14 / 29 8 / 29

--2007 7 / 26 10 / 26 16 / 26 24 / 26

--2006 11 / 23 18 / 23 1 / 23 10 / 23

--2005 5 / 20 8 / 20 1 / 20 2 / 20

Top 5 Scrips (%) 21.79% 17.22% 21.44% 24.08%

Corpus (Size) (30 nov) 1213.02 8.59 4961.62 1946.94


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No. of Stocks 40 38 70 51

Equity holdings (%) 84.08 85.12 94.99 95.34

Expense Ratio 2.06 2.5 2.5 1.94

P/E Ratio 20.42 16.01 25.35 21.18

Turnover Ratio 96% 134.10% 30% 29.06%

Sharpe Ratio 0.42 0.44 0.26 0.28

Beta 0.96 0.97 0.95 0.94

R-Squared 0.92 0.94 0.96 0.94

Alpha 6.02 6.52 0.13 0.77


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CHAPTER 6

LEARNING

EXPERIENCE


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LEARNING EXPERIENCE

Studying this project was very useful as it helped me learn several aspects of a

stock market and its effects on several industries.

The selection of fund is the most important factor in Mutual FundIndustry. Every Fund cater different needs. Selection must be purely

based on individuals requirements.

Working in Mutual Fund industry is very much complimented byconstant watch on stock market. Every move in stock market could affect

your money invested in fund

Mutual funds are for those people who think of future and can makeinvestment which may lock their money for longer period in order to get

better returns. E.g. In case of growth funds money may be locked for upto

10 years.

Various aggregate factors and returns rates are very important indicatorsfor the growth of the fund. Besides looking to the past years returns

factors such as Mean, Standard Deviation, Beta value are also veryimportant in studying the growth of a particular fund.

SBI Mutual Fund itself is a well established company with veryexperienced Fund managers handling several products of SBI which

includes several Equity funds, Debt Funds, Balanced Funds, Exchange

trade funds.


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CHAPTER 7

CONCLUSIONS


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CONCLUSION

Since my project study was restricted to 60 days only so I considered taking up

just the Analysis of Top ten tax saving ELSS mutual fund in the market. ELSS

funds are basically an option where an individual can get Tax exemption over

its income by investing in such funds. Under ELSS funds an individual get an

exemption of over Rs. 1 Lakh on its income.

To review and handle every Mutual fund, there is a Fund Manager appointed.

Every Fund manager keeps a thorough watch on the market in order to regulate

the money invested in different stocks. This reduces the risk of an investor who

has invested in different portfolios.

Though investing in mutual funds provides fewer returns as compared to

investing in Shares but here risk is reduced as compared to direct investment in

stock market. Since the money is blocked for the period of 3 years, its positive

aspect as it takes at 3years mutual fund to grow.

Above mentioned Funds are all Defensive in nature since there BETA is less

than 1, i.e. they maintain a secured and low risk factor assuring low but

guaranteed returns. Also basic motive is to get the Tax exemption. Hence lowrisk profile is maintained. The 2009 downturn took every fund beneath the

ground but Indian market having a strong debt base helped these fund to recover

even faster with the economy.

Mutual Funds are good option for individual having high income and who are

looking forward to save their taxes. It is a good option to safeguard your money

and helps it grow more.

In the end, I would like to say that my experience at SBI Mutual Fund wasextraordinary. I experienced and learned certain extra knowledge within my

field and fields related to them. Mutual funds are also subject to market. The

offer document must be read very carefully by an investor before investing the

money.


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CHAPTER 8

BIBLIOGRAPHY


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BIBLIOGRAPHY

REPORTS & MANUALS SBI MUTUAL FUND HAND BOOK SBI MUTUAL FUND INVESTMENT UPDATE APRIL 2010 HDFC MUTUAL FUND INVESTEMENT PLANNER SUNDARAM PNB PARIBUS INVESTEMENT MAP ICICI PRUDENTIAL MUTUAL FUND KEY INFORMATION

MEMORANDUM

NEWSPAPERS

The Economic Times Business Standard

WEBSITES

www.sbimf.com www.indiainfoline.com www.valueresearchonline.com
http://www.sbimf.com/http://www.sbimf.com/http://www.indiainfoline.com/http://www.indiainfoline.com/http://www.indiainfoline.com/http://www.sbimf.com/

sbi study mutual funds

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