BANASTHALI UNIVERSITY

A Project Report
On
COMPARISON OF UTI MUTUAL FUNDS
Submitted in the fulfillment of the requirement of the award of
the degree of
MASTERS OF BUSINESS ADMINISTRATION
(Year 20102011!
Super"i#ed $%& Submitted $%&
'r( )arendra Ar%a Swati *alal (+,+2!
(Senior 'anager!
-anita.umari(+,/,!
DECLARATION
0e hereb% declare that the project wor. entitled 1COMPARISON OF
UTI MUTUAL FUNDS2 i# an authenticated wor. carried b% me at UTI
under the guidance of 'r( )arendra ar%a for the award of the degree of

'a#ter of $u#ine## Admini#tration and thi# wor. ha# been #ubmitted to
$ana#thali 3ni"er#it%4 Raja#than(
5he information gi"en in thi# project i# true to the be#t of m%
.nowledge(
Swati dalal
-anita .umari
'$A 66nd Sem
ACKNOWLEDGEMENT
Super"i#ion and guidance of a large number of indi"idual# ha"e
contributed to the #ucce##ful completion of thi# project( 5hi# project i# a
humble attempt to #.etch down the contribution of all tho#e per#on# who
ha"e directl% or indirectl% gi"en their preciou# time and help along with
proper guidance for ma.ing thi# report in the following #hape(
6 am highl% than.ful to 'r( )arendra ar%a 3564 without who#e
permi##ion project of 356 would ha"e been ca#tle in the air( 6 than. 'r(
)arendra ar%a project coordinator who pro"ided me with their
#uper"i#ion and guidance in completing thi# project effecti"el%(
7a#t but not the lea#t4 6 pa% m% gratitude to m% parent#4 famil% member#4
friend#4 facult% member# of $ana#thali 3ni"er#it% and all member# of
3564 for their #upport and whole hearted cooperation in drafting thi#
report(

5able of content
8O'PA)Y PRO967:

1. Introduction
The Indian mutual fund industry has come a long way since its modest
beginning in form of establishment of Unit Trust of India in 1963. Today it boasts

of large number of private sector players with total asset under management close
to Rs. !9"!""" crore. The mutual funds offer a nice avenue for investors who do
not have the re#uisite $nowledge! a large corpus or the time to $eep tab on the
mar$ets and ta$e investment decisions.
%owever the with the large number of schemes and fund houses clamoring
for attention! the common investor faces two main challenges. &irstly! that of
choosing a scheme that is appropriate for his investment needs. 'econdly!
choosing among a particular category of scheme the fund house that will perform
and beat the mar$et. The financial services industry along with its aggressive
mar$eting entices people to chase performance by touting ()star mutual funds or
emerald stoc$s. *aga+ines and television channels are not far behind in getting
e,perts to tell you how you should identify these gems. The common investor
generally loo$s at criteria such as past performance! or star fund manager for
ma$ing investment decision. %owever these choices may turns out to entirely
incorrect due to varied reasons such as! changing mar$et dynamics! e,it of star
fund manger etc.
In this report we attempt to answer the second dilemma of an investor that
of performance evaluation of the mutual fund house. -e compare five schemes of
UTI mutual fund on various parameters and finally comment on the performance
of these schemes.
Vision
To be the most .referred *utual &und.
*ission
To ma$e uti mutual fund/
The most trusted brand! admired by all sta$eholders
The largest and most efficient money manager with global presence
The best in class customer service provider
The most preferrd employer
The most innovative and best wealth creator
0 socially responsible organi+ation $nown for best corporate governance
Genesis

1anuary 12! ""3 is when UTI *utual &und started to pave its path following the
vision of UTI 0sset *anagement 3o. 4td. 5UTI0*36! which was appointed by
UTI Trustee 3o! .vt. 4td. for managing the schemes of UTI *utual &und and the
schemes transferred7migrated from the erstwhile Unit Trust of India.
UTI0*3 provides professionally managed bac$ office support for all business
services of UTI *utual &und in accordance with the provisions of the Investment
*anagement 0greement! the Trust 8eed! the '9:I 5*utual &unds6 Regulations
and the ob;ectives of the schemes. 'tate)of)the)art systems and communications
are in place to ensure a seamless flow across the various activities underta$en by
UTI*&.
'ince &ebruary 3! ""2! UTI0*3 is also a registered portfolio manager under the
'9:I 5.ortfolio *anagers6 Regulations! 1993 for underta$ing portfolio
management services. UTI0*3 also acts as the manager and mar$eter to
offshore funds through its 1"" < subsidiary! UTI International 4imited! registered
in =uernsey! 3hannel Islands.
UTI0sset Under *anagement presently manages a corpus of over Rs.
69!1"!("9.2( la$hs as on 3"th 1une "11 5source/www.amfiindia.com6. UTI
*utual &und has a trac$ record of managing a variety of schemes catering to the
needs of every class of citi+ens. It has a nationwide networ$ consisting 12> UTI
&inancial 3entres 5U&3s6 and UTI International offices in 4ondon! 8ubai and
:ahrain.
UTI0*3 has a well)#ualified! professional fund management team! which has
been fully empowered to manage funds with greater efficiency and accountability
in the sole interest of the unit holders. The fund managers are ably supported by a
strong in)house securities research department. To ensure investors? interests! a
ris$ management department is also in operation.
Reliability
UTI*& has consistently reset and upgraded transparency standards. 0ll the
branches! U&3s and registrar offices are connected on a robust IT networ$ to
ensure cost)effective #uic$ and efficient service. 0ll these have evolved UTI*&
to position as a dynamic! responsive! restructured! efficient and transparent entity!
fully compliant with '9:I regulations.
Investment !iloso"!y
UTI *utual &und?s investment philosophy is to deliver consistent and stable
returns in the medium to long term with a fairly lower volatility of fund returns
compared to the broad mar$et. It believes in having a balanced and well)
diversified portfolio for all the funds and a rigorous in)house research based
approach to all its investments. It is committed to adopt and maintain good fund
management practices and a process based investment management.

UTI *utual &und follows an investment approach of giving as e#ual an
importance to asset allocation and sectoral allocation! as is given to security
selection while managing any fund. It combines top)down and bottom)up
approaches to enable the portfolios7funds to adapt to different mar$et conditions
so as to prevent missing an investment opportunity.
In terms of its funds performance! UTI *utual &und aims to consistently remain
in the top #uartile vis)@)vis the funds in the peer group.
*umbai
1
st
&eb ""3

O#$ECTIVE O% T&E 'T(D)
The ob;ective of study is to compare uti?s ( mutual funds on certain parameters
such as /
Type of investors
Ab;ective of the investment
'I. returns provided by various mutual fund and its fund
positioning in the mar$et.



'COE O% 'T(D)
The scope of the study is to promote and sell the funds of uti mutual funds to the
customers of the ban$s so that they can be awared of investing money in 'I.?s of
mutual fund.
-e have noted that similar schemes will generally have similar investment
ob;ectives! ris$)return grade! entry e,it loads and loc$)in periods. %owever! we
observe that even when these similar schemes operate in same environment! with
same constraints there is a mar$ed difference in there performance. -e evaluate
the absolute as well as relative performance of the schemes based on different
measure stated above
*UTU04 &UB8'
*utual funds are investment companies that pool money from investors at large and offer to sell
and buy bac$ its shares on a continuous basis and use the capital thus raised to invest in
securities of different companies. This article helps you to $now in depth on/ Is it possible to
diversify investment if invested in mutual fundsC &ind more on the wor$ing of mutual fund
Dnow more about the legal aspects in relation to the mutual funds 0t the beginning of this
millennium! mutual funds out numbered all the listed securities in Bew Eor$ 'toc$ 9,change.
*utual funds have an upper hand in terms of diversity and li#uidity at lower cost in comparison
to bonds and stoc$s. The popularity of mutual funds may be relatively new but not their origin
which dates bac$ to 1>th century. %olland saw the origination of mutual funds in 1FF2 as
investment trusts before spreading to 0nglo)'a,on countries in its current form by 1>6>. -e will

discuss now as to what are mutual funds before going on to seeing the advantages of mutual
funds. *utual funds are investment companies that pool money from investors at large and offer
to sell and buy bac$ its shares on a continuous basis and use the capital thus raised to invest in
securities of different companies. The stoc$s these mutual funds have are very fluid and are used
for buying or redeeming and7or selling shares at a net asset value. *utual funds posses shares of
several companies and receive dividends in lieu of them and the earnings are distributed among
the share holders. 0 :rief of %ow *utual &unds -or$ *utual funds can be either or both of
open ended and closed ended investment companies depending on their fund management
pattern. 0n open)end fund offers to sell its shares 5units6 continuously to investors either in retail
or in bul$ without a limit on the number as opposed to a closed)end fund. 3losed end funds have
limited number of shares. *utual funds have diversified investments spread in calculated
proportions amongst securities of various economic sectors. *utual funds get their earnings in
two ways. &irst is the most organic way! which is the dividend they get on the securities they
hold. 'econd is by the redemption of their shares by investors will be at a discount to the current
B0Gs 5net asset values6. 0re *utual &unds Ris$ &ree and -hat are the 0dvantagesC Ane must
not forget the fundamentals of investment that no investment is insulated from ris$. Then it
becomes interesting to answer why mutual funds are so popular. To begin with! we can say
mutual funds are relatively ris$ free in the way they invest and manage the funds. The investment
from the pool is well diversified across securities and shares from various sectors. The
fundamental understanding behind this is not all corporations and sectors fail to perform at a
time. 0nd in the event of a security of a corporation or a whole sector doing badly then the
possible losses from that would be balanced by the returns from other shares. This logic has seen
the mutual funds to be perceived as ris$ free investments in the mar$et. Ees! this is not entirely
untrue if one ta$es a loo$ at performances of various mutual funds. This relative freedom from
ris$ is in addition to a couple of advantages mutual funds carry with them. 'o! if you are a retail
investor and planning an investment in securities! you will certainly want to consider the
advantages of investing in mutual funds. 4owest per unit investment in almost all the cases Eour
investment will be diversified Eour investment will be managed by professional money
managers
0bout *utual &und

%ow does a *utual fund wor$C
0 mutual fund is a collection of stoc$s! bonds! or other securities owned by a group of investors
and managed by a professional investment company. &or an individual investor to have a
diversified portfolio is difficult. :ut he can approach to such company and can invest into shares.
*utual funds have become very popular since they ma$e individual investors to invest in e#uity
and debt securities easy. -hen investors invest a particular amount in mutual funds! he becomes
the unit holder of corresponding units. In turn! mutual funds invest unit holders money in stoc$s!
bonds or other securities that earn interest or dividend. This money is distributed to unit holders.
If the fund gets money by selling some stoc$s at higher price the unit holders also are liable to
get capital gains. 0 mutual fund is #uite simply a collection of stoc$s! bonds! or other securities
owned by a group of investors and managed by a professional investment company. Thus the
mutual funds are not the depositing instrument that has guarantee of getting certain amount but it
is li$e any other securities where the investor can have capital gains or loss.
0dvantages of *utual &und
ro*essional +ana,ement - The primary advantage of funds 5at least theoretically6 is the
professional management of your money. Investors purchase funds because they do not have the
time or the e,pertise to manage their own portfolio. 0 mutual fund is a relatively ine,pensive
way for a small investor to get a full)time manager to ma$e and monitor investments.
Diversi*ication . :y owning shares in a mutual fund instead of owning individual stoc$s or
bonds! your ris$ is spread out. The idea behind diversification is to invest in a large number of
assets so that a loss in any particular investment is minimi+ed by gains in others. In other words!
the more stoc$s and bonds you own! the less any one of them can hurt you 5thin$ about 9nron6.
4arge mutual funds typically own hundreds of different stoc$s in many different industries. It
wouldn?t be possible for an investor to build this $ind of a portfolio with a small amount of
money.
Economies o* 'cale . :ecause a mutual fund buys and sells large amounts of securities at a time!
its transaction costs are lower than you as an individual would pay.

Li/uidity . 1ust li$e an individual stoc$! a mutual fund allows you to re#uest that your shares be
converted into cash at any time.
'im"licity . :uying a mutual fund is easyH .retty well any ban$ has its own line of mutual
funds! and the minimum investment is small. *ost companies also have automatic purchase
plans whereby as little as Rs 1""" can be invested on a monthly basis.
%istory of *utual &und in India
.ioneer of mutual fund is UTI in 1963.
0ctual growth started in 19>F.
The dramatic improvement through #uality wise and #uantity wise.
*ain reason for its poor growth is new concept in the country.
4arge sections of Indian investor are yet to be intellectual with this concept.
%ence the it is prime responsibility of all *utual &und companies ! to ma$e the product
correctly abreast of selling.
There are four 2 phases according to the development of sector
&irst .hase 1962)19>F
1962 to 19>F/ I Unit Trust of India 5UTI6 was established on 1963 by an 0ct of
.arliament.
It was set up by the Reserve :an$ of India and functioned under the Regulatory and
administrative control of the Reserve :an$ of India.
In 19F> UTI was de)lin$ed from the R:I and the Industrial 8evelopment :an$ of India
5I8:I6 too$ over the regulatory and administrative control in place of R:I.
The first scheme launched by UTI was Unit 'cheme 1962. 0t the end of 19>> UTI had
Rs.6!F"" cores of asset
'econd .hase I 19>F)1993 59ntry of .ublic 'ector &unds6
19>F mar$ed the entry of non) UTI! public sector mutual funds set up by public sector
ban$s and 4ife Insurance 3orporation of India 54I36 and =eneral Insurance 3orporation
of India 5=I36.
':I *utual &und was the first non) UTI *utual &und established in 1une 19>F followed
by 3anban$ *utual &und 58ec >F6! .un;ab Bational :an$ *utual &und 50ug >96! Indian
:an$ *utual &und 5Bov >96! :an$ of India 51un 9"6! :an$ of :aroda *utual &und 5Act
96.
4I3 established its mutual fund in 1une 19>9 while =I3 had set up its mutual fund in
8ecember 199".
0t the end of 1993! the mutual fund industry had assets under management of Rs.2F!""2
crores.
Third .hase I 1993)""3 59ntry of .rivate 'ector &unds6
-ith 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. 0lso! 1993 was the
year in which the first *utual &und Regulations came into being! under which all mutual
funds! e,cept UTI were to be registered and governed.
The erstwhile Dothari .ioneer 5now merged with &ran$lin Templeton6 was the first
private sector mutual fund registered in 1uly 1993.

The 1993 '9:I 5*utual &und6 Regulations were substituted by a more comprehensive
and revised *utual &und Regulations in 1996. The industry now functions under the
'9:I 5*utual &und6 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
ac#uisitions.
0s at the end of 1anuary ""3! there were 33 mutual funds with total assets of Rs.
1!1!>"( crores.
The Unit Trust of India with Rs.22!(21 crores of assets under management was way
ahead of other mutual funds.
&ourth .hase I since &ebruary ""3
In &ebruary ""3! following the repeal of the Unit Trust of India 0ct 1963 UTI was
bifurcated into two separate entities. Ane is the 'pecified Underta$ing of the Unit Trust
of India with assets under management of Rs.9!>3( crores as at the end of 1anuary ""3!
representing broadly! the assets of U' 62 scheme! assured return and certain other
schemes.
The 'pecified Underta$ing of Unit Trust of India! functioning under an administrator and
under the rules framed by =overnment of India and does not come under the purview of
the *utual &und Regulations.
The second is the UTI *utual &und 4td! sponsored by ':I! .B:! :A: and 4I3. It is
registered with '9:I and functions under the *utual &und Regulations
-ith the bifurcation of the erstwhile UTI which had in *arch """ more than Rs.F6!"""
crores of assets under management and with the setting up of a UTI *utual &und!
conforming to the '9:I *utual &und Regulations! and with recent mergers ta$ing 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.

=RA-T% IB 0''9T' UB89R *0B0=9*9BT
Regulations
*utual &unds in India are governed by the 'E#I 0+utual %und1 Re,ulations 1223as amended
from time to time.
Argani+ation of *utual &und
The structure consists of
'"onsor
'ponsor is the person who acting alone or in combination with another body corporate
establishes a mutual fund. 'ponsor must contribute at least 2"< of the net worth of the
Investment *anaged and meet the eligibility criteria prescribed under the 'ecurities and
9,change :oard of India 5*utual &unds6 Regulations! 1996.The 'ponsor is not responsible or

liable for any loss or shortfall resulting from the operation of the 'chemes beyond the initial
contribution made by it towards setting up of the *utual &und.
Trust
The *utual &und is constituted as a trust in accordance with the provisions of the Indian Trusts
0ct! 1>> by the 'ponsor. The trust deed is registered under the Indian Registration 0ct! 19">.
Trustee
Trustee is usually a company 5corporate body6 or a :oard of Trustees 5body of individuals6. The
main responsibility of the Trustee is to safeguard the interest of the unit holders and inter alias
ensure that the 0*3 functions in the interest of investors and in accordance with the 'ecurities
and 9,change :oard of India 5*utual &unds6 Regulations! 1996! the provisions of the Trust
8eed and the Affer 8ocuments of the respective 'chemes. 0t least 73rd directors of the Trustee
are independent directors who are not associated with the 'ponsor in any manner.
Asset +ana,ement Com"any 0A+C1
The Trustee as the Investment *anager of the *utual &und appoints the 0*3. The 0*3 is
re#uired to be approved by the 'ecurities and 9,change :oard of India 5'9:I6 to act as an asset
management company of the *utual &und. 0tlas ("< of the directors of the 0*3 is an
independent director who is not associated with the 'ponsor in any manner. The 0*3 must have
a net worth of at least 1" crore at all times.
Re,istrar and Trans*er A,ent
The 0*3 if so authori+ed by the Trust 8eed appoints the Registrar and Transfer 0gent to the
*utual &und. The Registrar processes the application formJ redemption re#uests and dispatches
account statements to the unit holders. The Registrar and Transfer agent also handles
communications with investors and updates investor records.
Types of *utual &und
E/uity Oriented 'c!emes These schemes! also commonly called =rowth 'chemes! see$ to
invest a ma;ority of their funds in e#uities and a small portion in money mar$et instruments.
'uch schemes have the potential to deliver superior returns over the long term. %owever!
because they invest in e#uities! these schemes are e,posed to fluctuations in value especially in
the short term.
9#uity schemes are hence not suitable for investors see$ing regular income or needing to use
their investments in the short)term. They are ideal for investors who have a long)term investment
hori+on. The B0G prices of e#uity fund fluctuates with mar$et value of the underlying stoc$
which are influenced by e,ternal factors such as social! political as well as economic.
Inde4 'c!emes
Inde, &unds replicate the portfolio of a particular inde, such as the :'9 'ensitive inde,! 'K.
B'9 (" inde, 5Bifty6! etc These schemes invest in the securities in the same weight age
comprising of an inde,. B0Gs of such schemes would rise or fall in accordance with the rise or
fall in the inde,! though not e,actly by the same percentage due to some factors $nown as
Ltrac$ing errorM in technical terms. Becessary disclosures in this regard are made in the offer
document of the mutual fund scheme. There are also e,change traded inde, funds launched by
the mutual funds! which are traded on the stoc$ e,changes.
'ector '"eci*ic 'c!emes
These are the funds7schemes! which invest in the securities of only those sectors or industries as

specified in the offer documents. e.g. .harmaceuticals! 'oftware! &ast *oving 3onsumer =oods
5&*3=6! .etroleum stoc$s! etc. The returns in these funds are dependent on the performance of
the respective sectors7industries. -hile these funds may give higher returns! they are more ris$y
compared to diversified funds. Investors need to $eep a watch on the performance of those
sectors7industries and must e,it at an appropriate time. They may also see$ advice of an e,pert.
Ta4 'avin, 'c!emes
These schemes offer ta, rebates to the investors under specific provisions of the Income Ta, 0ct!
1961 as the =overnment offers ta, incentives for investment in specified avenues. e.g. 9#uity
4in$ed 'avings 'chemes 594''6. .ension schemes launched by the mutual funds also offer ta,
benefits. These schemes are growth oriented and invest pre)dominantly in e#uities. Their growth
opportunities and ris$s associated are li$e any e#uity)oriented scheme.
Income5Debt Oriented 'c!eme
The aim of income funds is to provide regular and steady income to investors. 'uch schemes
generally invest in fi,ed income securities such as bonds! corporate debentures! =overnment
securities and money mar$et instruments. 'uch funds are less ris$y compared to e#uity schemes.
These funds are not affected because of fluctuations in e#uity mar$ets. %owever! opportunities of
capital appreciation are also limited in such funds. The B0Gs of such funds are affected because
of change in interest rates in the country. If the interest rates fall! B0Gs of such funds are li$ely
to increase in the short run and vice versa. %owever! long term investors may not bother about
these fluctuations.
&ybrid5#alanced 'c!emes
These schemes are commonly $nown as balanced schemes. These schemes invest in both
e#uities as well as debt. :y investing in a mi, of this nature! balanced schemes see$ to attain the
ob;ective of income and moderate capital appreciation and are ideal for investors with a
conservative! long)term orientation. :alanced &und and =ift &und are e,amples of hybrid
schemes.
*oney *ar$et74i#uid 'chemes
These funds are also income funds and their aim is to provide easy li#uidity! preservation of
capital and moderate income. These schemes invest e,clusively in safer short)term instruments
such as treasury bills! certificates of deposit! commercial paper and inter)ban$ call money!
government securities! etc. Returns on these schemes fluctuate much less compared to other
funds. These funds are appropriate for corporate and individual investors as a means to par$ their
surplus funds for short periods.
Gilt 'c!emes
These funds invest e,clusively in government securities. =overnment securities have no default
ris$. B0Gs of these schemes also fluctuate due to change in interest rates and other economic
factors as are the case with income or debt oriented schemes.
Arbitra,e %und
0rbitrage is one of the most effective ways to insulate against mar$et volatility. 0n arbitrage
fund buys e#uities in the cash mar$et and simultaneously sells in the futures mar$et! thus
ensuring mar$et neutrality for the investment. In other words! it is a uni#ue asset class by itself
where returns are generated by capturing the pricing differential between the cash and the futures
mar$ets. It is also termed as a mar$et)neutral fund where the returns are not going to be impacted
by volatility in the mar$et.

&or any arbitrage fund! the following mar$et conditions are beneficial N a bullish mar$et and a
volatile mar$et. -hile the fund performs very well in bullish mar$ets! a volatile mar$et gives it
opportunities for early e,it! thus enhancing the overall yield of the portfolio. %owever! a
prolonged bear phase is not an ideal situation for this $ind of product.
8ifference between 0rbitrage &und K Income &und both in terms of ris$ and returns In terms of
returns! an arbitrage fund is better than an income product. 0n income product has a fi,ed yield)
to)maturity while in an arbitrage product! the yields are better due to lower cost of carry and are
usually in the range of 1")12<. 'econdly! the ris$ parameters are similar or lower than an
income product. 0n arbitrage fund does not carry any credit rating ris$ and interest rate ris$!
while the returns can be much higher than an income product. 0dded to this! a mutual fund
arbitrage product en;oys all the ta, benefits en;oyed by mutual fund products 8erivatives in India
have more often been used for speculation purposes than for hedging and arbitrage. -hat are
your views on thisC :oth in India and the world over! derivatives have been widely used as a
leverage product but as the trends are changing and the investors are maturing! the other tools
li$e hedging and ris$ free arbitrage strategies are also being widely used.
Gold E4c!an,e.Traded 'c!emes
9,change)traded funds 59T&s6 are mutual fund schemes that are listed and traded on e,changes
li$e stoc$s. 9T&s trading value is based on the net asset value 5B0G6 of the assets it represents.
=enerally! 9T&s invest in a bas$et of stoc$s and try to replicate a stoc$ mar$et inde, such as the
'K. 3BO Bifty or :'9 'ense,! a mar$et sector such as energy or technology! or a commodity
such as gold or petroleum. Recently! the 'ecurities and 9,change :oard of India 5'9:I6
amended its regulations and allowed mutual funds launch gold e,change)traded funds 5=9T&s6
in India. Two mutual funds! UTI mutual fund and :enchmar$ *utual &und! has been launched.
These funds got listed on the Bational 'toc$ 9,change 5B'96. 0 gold)e,change traded fund unit
is li$e a mutual fund unit bac$ed by gold as the underlying asset and would be held mostly in
demat form. 0n investor would get a securities certificate issued by the mutual fund running the
=old)9T& defining the ownership of a particular amount of gold. =9T&s are designed to offer
investors a means of participating in the gold bullion mar$et without the necessity of ta$ing
physical delivery of gold! and to buy and sell through trading of a security on a stoc$ e,change.
-ith gold being one of the important asset classes! =9T&s will provide a better! simpler and
affordable method of investing as compared to other investment methods li$e bullion! gold coins!
gold futures! or ;ewelry.
+aturity lans 0%+s1
'afe! predictable and better post)ta, returns than ban$ &8s Rising interest rates not only mean
rising 9*Is but also offer an opportunity to earn higher returns. 8ebt schemes are now offering
attractive returns with short)term rates in the region of >)1"<. 3all money rates have been
moving higher to about F.()>< due to tight li#uidity conditions. -ith the R:I deciding to raise
the cash reserve ratio 53RR6! li#uidity conditions have worsened. Tightness in the money
mar$ets is e,pected to continue till the end of the current financial year and investors can
consider investing in short term options li$e &*.s or floating rate schemes. &i,ed maturity
plans! or &*.s as they are popularly called! are close)ended funds with a fi,ed tenure and invest
in a portfolio of debt products whose maturity coincides with the maturity of the product.
The primary ob;ective of a &*. is to generate income while protecting the capital by investing
in a portfolio of debt and money mar$et securities. The tenure can be of different maturities!

ranging from one month to five years. &*.s can be compared to fi,ed deposits of a ban$. -hile
a fi,ed deposit offers a Pguaranteed? return! returns in &*.s are only Pindicative?. Typically! the
fund house fi,es a Ptarget amount? for a scheme! which it ties up informally with borrowers
before the scheme opens. That way it $nows the interest rate it will earn on its investments!
providing the Pindicative return? to investors.
+ont!ly Income lans
*onthly income plans! or *I.s! as they are more popularly $nown! are a category of mutual
funds that invest mainly in debt instruments. Anly about 1")")< of the assets are allocated to
e#uity stoc$s. :ut the very name I monthly income plan I is a misnomer! as these funds do not
guarantee a monthly income. 4i$e any other fund! the returns are mar$et)driven. Though many
fund houses strive to declare a monthly dividend! they have no such obligation. *I.s are
launched with the ob;ective of giving a monthly income to investors! but the periodicity depends
upon the option chosen by the investor. These are generally monthly! #uarterly! half)yearly and
annual options. 0 growth option is also available! where the investors do not receive regular
dividends! but gains in the form of capital appreciation.
*utual &und 3ategory 3 Eear Return
I8&3 .remier 9#uity 9#uity ".9 percent
IB= 8ividend Eield 9#uity ".36 percent
Reliance Regular 'avings 9#uity 9#uity 19.(> percent
:irla 'un 4ife 8ividend 9#uity 1>.F percent
UTI 8ividend Eield 9#uity 1>.6> percent
I3I3I .rudential &und 9#uity 1F.32 percent
%8&3 Top "" 8iversified 1F.16 percent
Reliance Regular %ybrid ".12 percent
%8&3 .rudence %ybrid 16.2 percent
6. Di**erent +utual *und 'c!emes
There are currently wide varieties of mutual funds schemes available in Indian mar$ets these can
be classified on following basis!
1. *oney *ar$et54i#uid funds6
. 9#uity
a. 'trategy
a.i. 0ggressive growth
a.ii. =rowth

a.iii. Galue
a.iv. :lend
a.v. =rowth and income
b. :y si+e
b.i. 4arge caps
b.ii. *idcaps
b.iii. 'mall caps
c. Inde,
d. International
d.i. =lobal
d.ii. Us
d.iii. 3ountry specific
d.iv. 9merging mar$ets
e. 'ector funds
3. :ond
a. *unicipal
b. 3orporate
c. *ortgage)bac$ed
d. =I4T
2. &loating rate funds
a. 'hort)term
b. 4ong)term
(. 9#uity 4in$ed 'aving 'chemes 594''6
6. Apen)ended and close ended
*oreover! the finance minister *r. . 3hidambaram in his Union budget of ""F)">! proposed
the Indian mutual fund industry to play bigger part in infrastructure development in India. This

mean they can now directly invest into infrastructure pro;ect by launching dedicated
infrastructure development funds.
7. 'ome 8ey terms
A. O"en Ended 'c!eme) 0 type of mutual fund where there are no restrictions on the
amount of shares the fund will issue. If demand is high enough! the fund will continue to
issue shares no matter how many investors there are. *ost of the mutual funds available
in the mar$etplace are open)end funds. Apen)end funds are generally managed actively
and are priced according to their net asset value 5B0G6.
#. Close Ended. 0 fund that has a fi,ed amount of shares outstanding! unli$e mutual funds
which are open)ended 5allow new shares to be purchased6. 3losed)end funds behave
more li$e stoc$s because they trade on an e,change and the price is determined by
mar$et demand after an initial I.A process. closed)end funds can trade below their net
asset value or above it.
C. Net Asset Value) The net asset value 5B0G6 of a mutual fund is simply its assets minus
its liabilities. In other words! B0G e#uals the fundQs worth. %owever B0G listed here are
on per unit basis i.e. total B0G of mutual fund divided by the number of units issued.
D. Entry5E4it Load ) 9ntry load is the commission that an investor has to pay while
purchasing units of a mutual fund. This is a certain percentage that the mutual fund
charges to meet its e,penses. 3ertain funds have 9,it 4oad which means a similar $ind of
commission but it?s charged when the investor e,its the scheme.
E. 'tandard deviation/ It tells us how much the return on the fund is deviating from the
e,pected normal returns.

%. 0lpha Ratio/ It tells us how the mutual fund has beaten it inde,. If it is greater than "!
then we say it has a positive alpha. The greater the number! the greater the out)
performance.
G. :eta/ It tells us how the fund would respond to swings in the mar$et. If the beta is more
than 1! then the funds swings will be greater than the mar$et swings and vice versa.
&. 'harpe Ratio/ It tells us whether the returns of a portfolio are due to smart investment
decisions or due to e,cess ris$. This measurement is very useful because although one
mutual fund can give higher returns than its peers! it is only a good investment if the
higher returns do not come with too much additional ris$. The greater a portfolioQs 'harpe
ratio! the better is its ris$)ad;usted performance.
I. Treynor Ratio9 It is similar to the 'harpe ratio. Instead of comparing the fundQs ris$)
ad;usted performance to the ris$)free return! it compares the fundQs ris$ ad;usted
performance of the relative inde,.
$. 4ar,e ca" *unds 9 Lar,e ca" *unds are t!ose mutual *unds: ;!ic! loo< *or ca"ital
a""reciation by investin, "rimarily in stoc<s o* lar,e blue c!i" com"anies= t!at
!ave more "otential o* earnin, ,ro;t! and !i,!er "ro*it
8. 'mall ca" *unds / 'mall cap mutual funds are essentially stoc$ funds devised at
ma,imi+ing returns or growth. The term small cap refers to the capitali+ation of a
corporation in the stoc$ mar$et which is any where between R 3"" and R billion.
L. +id ca" *unds / The core strategy of mid)cap related funds is to identify and invest in
companies that have ;ust embar$ed on the growth curve
Com"arison Criteria>s
1. =eneral .arameters
a. Investment Ab;ective

b. Ris$ and Return =rade
c. 3orpus
d. 3urrent B0G
e. 9ntry79,it 4oad
f. Top 3urrent %olding 5sectors and stoc$s6 and changes
g. Ather 'pecific information
. .erformance based comparison
a. 0bsolute returns
b. .erformance w.r.t. standard benchmar$
c. 'td dev and :eta
d. 'harpe ratio 5Ri)Rf 7 'td dev6
e. B0G movement over past 3 years
.


:uild your future/

To meet largest e,penses of your life li$e
marriages! education or a house you need to start
investing early. 'ave a small amount every
month7#uarter and loo$ forward to a bright future.
Rela, and accumulate wealth/

-ith 'I. you don?t re#uire investing a huge sum
of money and start with an amount as little as Rs.
("". Eou can accumulate wealth over long)term.
Reduce ris$/

&or efficient participation in this highly volatile
mar$et! 'I. helps you average out your cost by
generating superior returns in the long run. It
reduces ris$ associated with lump sum
investments.
9n;oy the ease/

'et yourself free from cumbersome paperwor$.
1ust identify the amount and scheme you wish to
invest in and then choose from options li$e 0uto
8ebit793'. The amount will automatically get
debited on a date of your choice. Eou can also
give monthly7#uarterly post)dated che#ues for the
amount you wish to invest.
About 'ystematic Investment lan 0'I1
&ollow a disciplined approach towards investing in UTI *& schemes.
*a$e regular investments through 'ystematic Investment .lan
according to pre)opted schedules. To $now more about this time tested
mechanism!


#uild your investment at re,ular intervals
:y 'ystematic Investment .lan you can invest a
pre)determined among of money in chosen
schemes at the applicable B0G based 'ale .rice
on each transaction date. 9ach transaction will
fetch you additional units that will be added to
your investment account

'te" by ste": reac! out *or
your ,oals
) 'et your financial goals
) Identify the scheme
) 8ecide the 'I. amount
) 4oo$ for a long)term commitment/ Apt for bigger gains as
through 'I. returns increase with e,tended time hori+on.0im
for the big picture/ To

get the most out of the
mar$et fluctuations! start
investing today. The sooner
you start! the earlier you
reach your financial goals.
) 'tart investing

#ene*it *rom (TI 'I
Ru"ee cost avera,in,/ -ith UTI 'I. you can
invest a uniform amount regularly and average out
the cost of ac#uisition of units. This average cost
per unit will determine your overall return on your
investments.


+ont! Amount you
invest 0Rs.1
'ale rice
1 7??? 1?
6 7??? 16
7 7??? 1?
@ 7??? A
B 7??? 1?
Total 1B???

0s evident from above table! when invested
through 'I.! the average purchase price wor$s out
as low at 9.>36! compared to a lump sum
investment of Rs. 1".

.ower of compounding/ :y e,tending your
investment period you can earn profit on your
profit! and accumulate more wealth. The
illustrated graph given below proves this fact.


(TI +(T(AL %(ND 'C&E+E
(TI.#an<in, 'ector %und
Ty"e O* 'c!eme
Apen 9nded 9#uity
Date O* Ince"tion
"97"37""2
'c!eme ObCective 0n open)ended e#uity fund with the ob;ective to provide capital appreciation
through investments in the stoc$s of the companies7institutions engaged in
the ban$ing and financial services activities.
Asset Allocation
0t least 9"< in e#uity 7 e#uity related instruments
%ace Value
Rs.1"7)
+in Investment Amt
Rs. (!"""7)
lan
Latest Nav Date
Gro;t! O"tion @6.@@?? ?D56256?11
Income O"tion 12.BD?? ?D56256?11
Entry Load
9ntry 4oad Bil 50ny application si+e6
E4it Load S 1 years ) 1<
TU 1 years ) Bil
%und +ana,er
*r.0run Dhurana! *r. 0noop :has$ar
Remar<
))
resentation

(TI.Dividend )ield %und
Ty"e O* 'c!eme
Apen)9nded 9#uity Ariented 'cheme
Date O* Ince"tion
117"27""(
'c!eme ObCective 0n open)ended e#uity scheme. It aims to provide medium to long term
capital gains and7or dividend distribution by investing predominantly in
e#uity and e#uity related instruments which offer high dividend yield.
Asset Allocation %igh dividend yield e#uity and e#uity related instruments. Ather e#uity or
e#uity related instruments. 8ebt and money mar$et instruments. 6()1""<. ")
3(<. ")1"<
%ace Value
Rs. 1"
+in Investment Amt
Rs.("""
lan
Latest Nav Date
Income 1@.76?? ?D56256?11
Gro;t! 76.77?? ?D56256?11
Entry Load
9ntry 4oad Bil 50ny application si+e6
E4it Load S 1 years ) 1<
TU 1 years ) Bil
%und +ana,er
*rs. 'wati Dul$arni
Remar<
))
resentation

(TI.O""ortunities %und
Ty"e O* 'c!eme
Apen 9nded 9#uity &und
Date O* Ince"tion
167"F7""(
'c!eme ObCective This scheme see$s to generate capital appreciation and7or income
distribution by investing the funds of the scheme in e#uity shares and e#uity)
related instruments. The focus of the scheme is to capitalise on opportunities
arising in the mar$et by responding to the dynamically changing Indian
economy by moving its investments amongst different sectors as prevailing
trends change.
Asset Allocation
9#uity 9"< to 1""<
%ace Value
Rs.1"
+in Investment Amt
Rs.("""
lan
Latest Nav Date
INCO+E RETAIL 1@.?1?? ?D56256?11
GROET& RETAIL 6D.DD?? ?D56256?11
Entry Load
9ntry 4oad Bil 50ny application si+e6
E4it Load S 1 years ) 1<
TU 1 years ) Bil
%und +ana,er
*r. %arsha Upadhyaya
Remar< UTI)=randmaster Unit 'cheme!UTI)*aster 9#uity .lan 199>!UTI)*aster
9#uity .lan 1999!UTI).9& Unit 'cheme K UTI)Unit 'cheme 199 have
been merged with UTI)Apportunities &und.
resentation

(TI.E/uity %und 0%ormerly (TI.+aster,ain (nit 'c!eme1
Ty"e O* 'c!eme
Apen 9nded 9#uity &und
Date O* Ince"tion
"7"27199
'c!eme ObCective UTI 9#uity &und is open)ended e#uity scheme with an ob;ective of
investing at least >"< of its funds in e#uity and e#uity related instrument
with medium to high ris$ profile and upto "< in debt and money mar$et
instruments with low to medium ris$ profile.
Asset Allocation
0t least >"< in e#uity! upto "< in debt
%ace Value
Rs.1"
+in Investment Amt
Rs. (!"""7)
lan
Latest Nav Date
Income O"tion @A.D??? ?D56256?11
Gro;t! O"tion BB.11?? ?D56256?11
Entry Load
9ntry 4oad Bil 50ny application si+e6
E4it Load S 1 years ) 1<
TU 1 years ) Bil
%und +ana,er
*r. 0noop :has$ar
Remar<
))
resentation

(TI.+aster Value %und
Open Ended Equity Fund
01/06/1998
An open-ended equity fund investing in stocks which ae cuent!y
unde va!ued to thei futue eaning potentia! and cay "ediu" isk
pofi!e to povide #$apita! Appeciation#%
100& in Equity
's%10
's% ()000/-
Latest Nav
Income O"tion 67.B6??
Gro;t! O"tion B7.36??
Enty *oad +i! ,Any app!ication si-e.
/ 1 yeas - 1&
01 1 yeas - +i!
2% Anoop 3haska
--


40TE'T NEE'
Thiruvananthapuram! &eb / UTI *utual &und -ednesday announced its tie)up with %8&3
:an$ for an investor education initiative called Q'watantraQ in Derala! Darnata$a and Tamil Badu.
V-e are happy to partner with IndiaQs oldest fund house UTI *utual &und in this uni#ue investor
education initiative. %8&3 :an$Qs huge networ$ of rural and semi)rural branches across Derala!
Darnata$a and Tamil Badu will interact with millions of people living in rural areas to impart
financial $nowledge which hitherto has been the domain of the urban rich!V %8&3 :an$Qs senior
e,ecutive vice)president 5private ban$ing group and third party products6 Bitin Rao said.
0s part of this initiative! two QUTI Dnowledge 3aravansQ will travel through small towns of
Derala! Darnata$a and Tamil Badu. The caravans were flagged off here -ednesday by 8hira;
Relli! %8&3 :an$Qs e,ecutive vice)president and head of branch ban$ing 5south6.
The caravans will cover more than F!3"" $m in about (6 days. Investor meets will be held in
around 13" towns and will be conducted in local languages Tamil! *alayalam and Dannada.
UTI 0sset *anagement 3ompanyQs chief mar$eting officer 1aideep :hattacharya said Q'watantraQ
was IndiaQs ;ourney to financial freedom.
VTa$ing this initiative to the ne,t level! UTI *utual &und has tied up with %8&3 :an$! the
largest distributor of mutual fund products! for continuing its efforts for spreading financial
literacy in the small towns of Derala! Darnata$a and Tamil Badu!V said :hattacharya. 5I0B'6
%INDING'
1. 0ll investments in mutual funds and securities are sub;ect to mar$et ris$s and the B0G of
the units under the scheme may go up or down depending upon the factors and forces
affecting the securities mar$et.
. .ast performance of the sponsor7mutual fund7schemes70*3 is not necessarily an
indication of future results and may not necessarily provide basis for comparison with
other investment.
3. 0ll mutual funds and securities investments are sub;ect to mar$et ris$s and there can be
no assurance or guarantee that the ob;ectives of the scheme will be achieved.
2. The schemes of UTI are sub;ect to ris$ relating to credit ! interest rates! li#uidity!
securities lending! reinvestment ris$! default ris$ and investment in overseas mar$ets!
trading in debts and e#uity derivatives.

(. Uti has continously performed better than bombay stoc$ e,change since last 3)2 years.
6. The large number of investors who are above 2" yrs are more interested in investing
dividebd yield fund because they are more conservative and this funds provide regular
return to the investors.
F. The regular investor with aggressive style of fund managemnt invests in opportunity
fund as they can bear more ris$s

RE'EARC& AND +ET&ODOLOG)
&or the purpose of searching data we have ta$en whole data from secondary source.
&or selling the above five funds of uti mutual funds we have adopted direct mar$eting and
procedure was /
1. The uti has tied up with its sponsor ban$s li$e ':I! :0BD A& :0RA80! :0BD A&
IB8I0! .UB10: B0TIAB04 :0BD.
. Then as a managment trainee uti has send us to two of the sponserd ban$ for selling 'I.?s
to ban$ customers directly.
3. 0s the customer arrives in the ban$ we have to introduce our self and funds of uti to
them.
2. The another way of selling uti mutual fund was to promote it through the camps
organised by ban$s.


LI+ITATION'
1. The nav has been calculated assuming that all payouts durind the period have been
reinvested in the units of the scheme at the immediate e,) div B0G
. .ast performance of the funds may or may not be sustained in future
3. Returns are computed on the basis of compounded annual growth rate.
2. 'I. returns are wor$ed out assuming investment of Rs 1""" every month at B0G per unit
of the scheme as on the 1
st
wor$ing day for the respective time periods and loads have not
been ta$en into account.

CONCL('ION
It can be concluded from the above report that it totally depends upon customers style of
management that in which funds he is more interested in investing but the most prefferd fund of
uti mutual fund is dividend yield fund. 0s it provides a regular return and is a diversified large
mid cap fund.
Uti opportunity fund is a diversified large cap oriented fund with aggressive style of funds
management and is suitable for regular e#uity investors.
The 'I. gives more retuns than the lumpsum amount.




#I#LIOGRA&)
*aga+ine of uti mutual funds
0nnual report
Argani+ational :ehaviour :y 'tephen. .. Robbins
www. uti mf.com
www. mutual*unds navindia.com
www.utihistory.com