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TITLE OF DISSERTATION : “A CASE STUDY ON EQUITY

LINKED TAX SAVING SCHEMES IN MUTUAL FUNDS AND
RISK AND RETURN ANALYSIS WITH REFERENCE TO
PRIVATE SECTOR, KERALA.”
 CHAPTER:-1
INTRODUCTION

INTRODUCTION

o A Mutual Fund is a trust that pools the reserve funds of various speculators who share a
typical budgetary objective. The cash, hence gathered, is then put resources into the
capital market instruments, for example, offers, debentures and different securities. The
salary earned through these ventures and the capital thankfulness acknowledged is shared
by its unit holders in extent to quantity of units claimed by them.
 Shared Funds deals with the standard of do not put all investments tied up on
one place i.e. broadening. Upgrade diminishes the danger since all stocks may not move a
comparative path in a comparative degree meanwhile. Shared store issues units to the
investors‟ according to quantum of money contributed by them Investors‟ of ordinary
resources are known as unit holders.

The advantages or hardships are shared by the investors‟ in degree to their theory. The
normal enrolled with Securities and Exchange Board of India (SEBI)which manages
securities showcases before it can gather assets from people in general.
Key features
o Professional speculation the executives.
o Diversification of Portfolio.
o Low Cost of Investment.
o Convenience and Flexibility to contribute any sum whenever.
o Quick and Personalized Services from AMC.
o Ease of Investing
o High Liquidity.
o Choice of Dividend or Growth Options.
o Tax Savings Funds also available

To state in straightforward words, a common store gathers the reserve funds from little financial
specialists, put them in Government and other corporate securities and procure pay through
intrigue and profits, other than capital gain It tackles the standard of" little drop of water makes a
noteworthy ocean'.

DEFINITION

The securities and Exchange Board of India (Mutual Funds) Regulation, 1993 characterizes a
common reserve "a store set up as a trust by a support, to raise monies by the trustees through the
offer of units to, the general population, under at least one plans, for putting resources into
securities as per these controls"
As per Weston J. Fred and Brigham, Eugene, F, Unit trusts are "partnerships
which acknowledge dollars from savers and afterward utilize these dollars to purchase stock,
long haul securities, momentary obligation instruments issued by business or government units;
these organizations pool assets and hence diminish hazard by broadening".

TYPES OF MUTUAL FUNDS

Closed-ended Funds

A shut end subsidize has a stipulated development period which for the most part
extending from 3 to 15 years. The store is open for membership just amid a predefined period.
Speculators can place assets into the arrangement at the season of the underlying open issue and
from that point they can buy or move the units of the arrangement on the stock exchanges where
they are recorded. To give a leave course to the monetary experts, some close-by completed
backings give a decision of offering back the units to the Mutual Fund through discontinuous
repurchase at NAV related expenses. SEBI Regulations stipulate that something close to one of
the two leave courses is given to the money related pro.
Interval Funds

Interim supports consolidate the highlights of open-finished and close-finished plans. They are
open accessible to be obtained or recuperation in the midst of pre-chosen between times at NAV
related costs
.
INVESTMENT OBJECTIVE:

Equity Funds Dividend

 The aim of Equity Funds Dividend is to give capital increase over the medium to long
haul. Such plans typically put a greater part of their corpus in values. It has been demonstrated
that profits from stocks, have beated most other sort of speculations held over the long haul.

Equity Funds Growth

The point of Equity Funds development is to give capital increment over the medium to
whole deal. Such designs frequently put a predominant piece of their corpus in qualities. It has
been shown that benefits from stocks, have defeated most other kind of hypotheses held over the
long haul
Balanced Funds Dividend

The purpose of balanced accounts benefit is to give both profit and ordinary salary. Such plans
occasionally disperse a piece of their winning and put both in values and settled salary securities
in the extent shown in their offer reports.

Balanced Funds Growth

The point of adjusted assets is to give both development and normal salary. Such plans
intermittently appropriate a piece of their gaining and put both in values and settled salary
securities in the extent demonstrated in their offer archives.
OTHER SCHEMES:
Tax Saving Schemes
These plans offer duty refunds to the financial specialists under explicit courses of action
of the Indian Income Tax laws as the Government offers impose motivating forces for interest in
determined roads Hypotheses made in Equity Linked Savings Schemes (ELSS) and Pension
Schemes are allowed as deduction u/s 88 of the Income Tax Act, 1961.
SPECIAL SCHEMES:

Industry Specific Schemes

 Industry Explicit Schemes place just in the organizations decided in the offer file. The
hypothesis of these advantages is restricted to unequivocal endeavors like InfoTech, FMCG, and
Pharmaceuticals, etc.
Index Schemes

Record Funds try to copy the execution of an explicit document, for instance, the BSE Sensex or
the NSE 5o.
Spectral Scheme

Unearthly Funds are those, which put solely in a predefined industry or a gathering of
businesses or different portions, for example, 'A' Group offers or starting open contributions.

ADVANTAGES OF INVESTING IN MUTUAL FUNDS

 Professional the board.

 Diversification.
 Convenient organization.
 Return potential.
 Low cast.
 Liquidity.
 Flexibility.
 Choice of plans.
 Tax benefits.
 Well managed.

TAX - BENEFITS

o No expense on profits in the hands of the financial specialist (just a 12.61o/o profit
circulation assess paid by the reserve before conveyance of profits)
o No profit conveyance impose for value shared assets (totally tax exempt profits)
o Tax obligation just when speculation is recovered/pulled back (only oneout of every odd
year)
o Long term capital" gains tax reductions.

Advantage of indexation for ventures held over a year.

 CHAPTER-2

REVIEW OF LITERATURE

REVIEW OF LITERATURE

History of the Indian Mutual Fund Industry

 The shared store industry in India began in 1963 with the arrangement of UTI, at the activity
of the RBI and the indian govt.. The historical backdrop of shared assets in India can be broadly
separated into four particular stages

First Phase – 1964-87 (UTI MONOPOLY)

An Act of Parliament built up UTI on 1963. It was set up by the RBI and controlled under the
Regulatory and legitimate control of the RBI. UTI later got de-associated from RBI and the IDBI
took charge of the administrative and regulatory control. The foremost plot impelled by UTI was
Unit Scheme 1964. Around the complete of 1988 UTI had Rs.6,7oo crores of preferences under
organization.
Second Phase – 1987-1993 (Entry of Public Sector Funds)

1987 signified the entry of non-UTI, open region regular backings set up by open part
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 developed in June 1987 sought after
by Can bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank
Mutual Fund (Nov 89), Bank of India (Jun 9o), Bank of Baroda Mutual Fund (Oct 92). LIC set
up its common hold in June 1989 while GIC had set up its common store in December 199o.At
the finish of 1993, the shared store industry had resources under administration of Rs.47,oo4
crores.
Third Phase – 1993-2oo3 (Entry of Private Sector Funds)

With the passage of private area assets in 1993, another time starts in the Indian common store
industry, giving the Indian financial specialists a more extensive decision of reserve families.
Additionally, 1993 is the year in which the main Mutual Fund Regulations appeared, under
which every shared store, aside from UTI were to be enlisted and administered. The recent

Kothari Pioneer (now converged with Franklin Templeton) was the main private segment
common store enrolled in July 1993.
 The 1993 SEBI (Mutual Fund) Regulations were substituted by an increasingly extensive
and reconsidered Mutual Fund Regulations in 1996. The business currently works under the
SEBI (Mutual Fund) Regulations 1996.

The quantity of shared store houses continued expanding, with numerous remote
common subsidizes setting up assets in India and besides the business has seen

A couple of mergers and acquisitions. As toward the complete of January 2oo3, there were 33
imparted advantages for total assets of Rs. 1,21,8o5 crores. The Unit Trust of India with
Rs.44,541 crores of advantages under organization was way before other regular resources.

Fourth Phase – Since February 2oo3

In February 2oo3, after the invalidation of the Unit Trust of India Act 1963 UTI was bifurcated
into two separate components. One is the predefined Undertaking of the Unit trust of India with
assets under organization of Rs.29,835 crores as toward the complete of January 2oo3,
addressing widely, the advantages of US 64 scheme, ensured return and certain diverse plans.
The Specified Undertaking of Unit Trust of India, work under an official and under the principles
encompassed by Government of India and does not go under the area of the Mutual Fund
Regulations.

The second is the UTI Mutual Fund Ltd, upheld by SBI, PNB, BOB and LIC. It is enlisted with
SEBI and limits under the Mutual Fund Regulations. With the bifurcation of the ongoing UTI
which had in March 2ooo more than Rs. 76,ooo crores of advantages under organization and
with the setting up of an UTI Mutual Fund, changing in accordance with the SEBI Mutual Fund
Regulations, and with late mergers happening among different private division saves, the shared
store industry has entered its present period of union and development. As toward the finish of
June 3o, 2oo3, there were 31 reserves, which oversee resources of Rs. 1o4762 crores under 376
plans.
While UTI was bifurcated into UTI Mutual Fund and the Specified Undertaking of the Unit
Trust of India ground-breaking from February 2oo3. The Assets under administration of the
Specified Undertaking of the Unit Trust of India has in this manner been prohibited from the
aggregate resources of the business all in all from February.

Trend in Mutual Funds Industry

The Indian Mutual reserve industry, in spite of the sum total of what that has been said
about it is still in an incipient stage and has to a great degree splendid future ahead. The business
is as yet one-tenth size of the managing an account stores in the nation.

The private segment common reserve industry in its hate 'symbol' is barely 7 years old. The total
asset under organization over the span of the last 4 to 5 tears has almost remain stale around the
Rs 1oo, ooo crore stamp.

This has put a question mark before the cases that common resources are creating bit of the cash
related assets and masterminding industry in India. It holds scope for improvement. In India this
industry began with the setting up of the Unit Trust Of India (UTI) in 1964 by the assembly of
India so as to mobiles little sparing. Amid the previous 37 years, UTI has become a predominant
player in the business with resources with over Rs 76,547 crore as of March2ooo. In any case,
bother hit UTI has lost its predominant position in the business and the advantage under
organization has slipped fundamentally to Rs 46,396 crore.

Private portion regular resources, which were permitted close by outside accessories in 1993,
presently value an overwhelming position in the country. Kothari Pioneer Mutual hold was the
important store to be set up in the private section with remote save. The private part at present
controls around RS 45,818 crore assets under organization, a vast segment of the degree of the
business.
The shared store industry have turned into the quickest developing area in the nation's capital and
money related market with a normal aggravated development rate of 2o percent in the course of
recent years. This is regardless of expanding rivalry with in excess of 3o resource the executives
organizations for speculator's cash. As on June 2oo2, the industry have Rs 1oo,7o3 crore
resource under administration spread crosswise over 36 assets with in excess of 39o plans.

Trade Board of India (SEBI) turned out with complete control in 1993, which characterized the
structure of the shared reserve and resource the board, Companies out of the blue. "The business
is advancing into a greater and better venture mechanism for all market section", Say Kavita
Hurry, CEO ING Investment Management, further, as of now, ING Investments oversees around
Rs.364 crore as on June 2oo2.

Drastic Transformation:

The business is experiencing a change and is seeing expansive number of mergers,

acquisitions and takeovers in the plans and resource the board organizations. Common store
items are contending with the banks stores, Reserves Banks of India (RBI) securities, benefits
assets and post workplaces conspires that give ensured return as well as tax-exempt returns. Be
that as it may, common assets can't give guaranteed return since they are putting resources into
money related markets and comes back from them are, by definition, unverifiable. These change
profiting the speculator agreeable open-finished plans, expanding the scope of assets to browse,
upgraded straightforwardness and enhancement direction.

Market Trends:

A solitary UTI with only one plan in 1964 currently rivals upwards of 4oo odd items and 34
players in the market. Despite the hardened rivalry and losing piece of the overall industry, UTI
still remains a considerable power to figure with.

Most recent six years have been the most fierce and in addition leaving ones for the business. New players have
come in, while others have chosen to cut off shop by either moving or converging with others. Item
development is currently old fashioned with the diversion moving to execution conveyance in store the
executives and also benefit. Those straightforwardly connected with the store the executives business like
wholesalers, recorders and exchange specialists, and even the controllers have turned out to be increasingly
develop and dependable.

The business is likewise profoundly affecting money related markets. While UTI has dependably
been a prevailing player on the bourses and also the obligation advertises, the new ages of
private assets, which have increased considerable mass, are currently observed utilizing their
muscles. Reserve chiefs by their determination criteria for stocks have constrained corporate
administration on the business. By compensating fair and straightforward administration with
higher valuations, an arrangement of hazard remunerate has been made where the corporate part
is progressively straightforward then previously.

Assets have moved their concentration to the retreat free parts like pharmaceuticals, FMCG and
innovation segment. Assets exhibitions are making strides. Assets accumulation, which arrived at
the midpoint of at under Rs1oobn per annum more than five-year time span spreading over 1993-
98 multiplied to Rs21obn in 1998-99. In the present year assembly till now have surpassed
Rs3oobn. Add up to accumulation for the current money related year finishing March 2ooo is
relied upon to reach Rs45obn.

What is especially important is that main part of the activation has been by the private division
common assets instead of open area shared assets. For sure private MFs saw a net inflow of Rs.
7819.34 crore amid the initial nine months of the year as against a net inflow of Rs. 6o4.4o crore
on account of open area reserves.

Common assets are presently additionally contending with business banks in the race for retail
speculator's investment funds and corporate buoy cash. The power move towards shared assets
has turned out to be self-evident. The coming couple of years will demonstrate that the
customary sparing roads are missing out in the present situation. Numerous financial specialists
are understanding that interests in bank accounts are on a par with securing up their stores a
storeroom. The reserve activation incline by common assets in the present year demonstrates that
cash is going to shared assets bigly. The accumulation in the principal half of the monetary year
1999-2ooo matches the entire of 1998-99.
BASIC MUTUAL FUND INVESTMENT INSTRUMENT
Mutual Funds are investing in 3 types of funds:
 Stocks
 Bonds
 Money market instruments
Broadly, Mutual Funds invest basically in 3 types of asset classes.
1. Stocks:- Stocks represent ownership or equity in a company popularly known as shares.
2. Bonds:- These represent debt from companies, financial institutions or government
agencies.
3. Money Market Instruments:- These include short – term dent instrument such as
treasury bills, certificate of deposits, and inter bank call money.
Mutual Fund can be classified based on their objectives as:
 Sector equity schemes:- These schemes invest in share of companies in as specific
sector.
 Diversified equity schemes:- These schemes invest in shares and fixed income of the
economy of companies across different sectors.
 Hybrid economy schemes:- These schemes invest in a mix shares and fixed income
instruments.
 Income schemes:- These schemes invest in fixed income instruments such as bonds
issued by corporate and financial institutions, and government securities.
 Money Market schemes:- These schemes invest in short – term instrument such as
certificate of deposits, treasury bills and short – term bonds.

Tax – Planning:

For most individuals,financial arranging and expense arranging are to totally unrelated activities.
While arranging our speculations we invest a lot of energy assessing different alternatives and
figuring out which suits us the best. In any case, with regards to arranging out speculations from
an expense – sparing point of view, as a rule, we just go the customary way and do precisely the
same thing that we did in the before years. All things considered, on the off chance that you
didn't know the rules administering such speculations are a great deal unique this year and
dormancy on your part to revamp your venture plan could cost you dear.

For what reason are the stakes higher this year?

Until the previous,tax advantage was given as a refund on the speculation sum, which
couldn't surpass Rs 1,oo,ooo ; of this Rs 3o,ooo was only held for foundation Bonds. Likewise,
the refund lessened with each ascent in the salary chunk; people gaining over Rs 5oo,ooo every
year were not qualified to clain any rebate.For the current money related year, the Rs 1,oo,ooo
limit has been held; anyway inner tops have been discarded. People have a more prominent level
of adaptability in choosing the amount to put resources into the qualified instruments. The other
noteworthy changer are -
One, the discount has been supplanted by a conclusion from gross aggregate salary, adequately.
The higher your salary piece, the more prominent is the tax reduction. Furthermore, two, all
people regardless of the level of pay are qualified for this venture. For most perusers, these
advancements will result in higher assessment reserve funds.

TAX SAVING SCHEME:

Under the watchful eye of close finished reserve, the financial specialists need to
look their assets with the trust for specific timeframes as a predetermined y the terms of the offer.
The fundamental issue for the financial specialist is that they can't move in out of the store
uninhibitedly. On account of Closed – Ended plans the costs of the units are determined in
indistinguishable way from on account of Open – Ended plans. Anyway these plans don't charge
an Entry/Exit stack as on account of open – finished plan. In this plan principle advantage is that
the financial specialist can guarantee for the expense sparing. This one on the other same to the
shut – finished plan yet one additional component is in this that the expense sparing he can
guarantee that under the area 8o C for this the speculator needs to through with the duty sections.

STATEMENT OF THE PROBLEM

The Study break down the different duty reserve funds shared store venture roads accessible to
speculators. Value Mutual Funds are one of the vital methods for pooling hazard capital from
little financial specialists. Like all speculation, they likewise convey certain dangers. In this paper
an endeavor has been made to investigate bibliographic audit of the hazard and return of different
shared reserve plans. For this reason, execution measures recommended by Sharpe, Treynor and
Jenson is being utilized. Furthermore, the best performing ELSS plan of shared reserve is being
recommended

SCOPE OF THE STUDY

This examination is worried to check the Impact of directions on the execution of chose shared
assets in kerala. It investigations the hazard and return inclinations of financial specialists and it
additionally examinations the eventual fate of shared assets.

OBJECTIVES OF STUDY

o To ponder the duty investment funds conspire on common assets, its execution in
the market, and its presentation to stock.

o To contemplate the capability of common assets in kerala.

o To dissect the execution of different common subsidizes conspires and

recommends the best one.

SAMPLING

Since the execution assessment of the examination zone is obscure the exploration has chosen to
pursue testing method for the present research work. There are 5 respondent are chosen for the
examination utilizing advantageous inspecting system The example measure is chosen in the
wake of considering the monetary position and time factor.
 TOOLS FOR DATA COLLECTION

The examination required the accumulation of the data from the both essential and optional
which gathered and broke down to reach a reasonable resolution and elucidation.

The information has been gathered both from the essential sources and also from the auxiliary
sources.
1.Sources of primary data
Essential information is unique in nature. Essential information is the primary wellspring
of information, which is for the most part gathered through perception, study, meet from
different associations in shared finances industry.
The information is gathered through close to home meeting with the chiefs of the monetary
division and bookkeeper of the organization.
The essential information has been gathered from the data given by the organization and
through counsel with different departmental heads and furthermore through perception.

2. Sources of secondary data

Optional information are static that as of now exist. Those in presence or some other
reason and they have been accumulated not for prompt use.
This might be wanted as those information that have been incorporated by some
organization other than the client.
The secondary data has been collected from various online sources.
The data has been collected from:
 Company website
 Internet
 Journals
 Annual reports
 Company manuals
 DATA ANALYSIS
Essential information and optional information which were gathered are obviously
aggregated, characterized and clarified trough flowcharts, charts and delineations, tables and
diagrams to arrive at resolutions. Obstructions are drawn from the discoveries and by those
discoveries recommendations have been exhibited.
The tools used for data analysis are as follows:
 Tables
 Diagrams
 Pyramid charts
 Column charts
 Cylindrical charts etc.

LIMITATIONS OF THE STUDY

Research is always subject to inherent limitations. Following are the limitation of the study,
The study is limited to the mutual Fund of kerala region.
It studies about its performance and tax savings.
The duration of the study is limited.
Primary sources of data are used here; it may not be reliable as desired.
 CHAPTER: 3
PROFILE OF THE SELECTED ORGANIZATION
 PROFILES OF CONCERNED ORGANIZATION

1.ICICI Prudential Mutual Fund

This AMC is a joint venture between ICICI Bank of India and Prudential Plc of UK. Prudential
Plc is one of the largest players in the financial services sector of UK. With an AUM
of rupees227,989 crore, ICICI Prudential Mutual Fund is the fund with the largest amount of
money under management.

ICICI Prudential Bluechip Equity Fund, is one of the popular funds by this AMC. It has an AUM
of 13,497 crore which is fairly large but not a problem since this is a large cap fund.

Another very good fund by this AMC is ICICI Prudential Equity and Debt Fund. It has returned
an annual rate of 15.03% since it was launched in 1999. Such a rate is considered exceptional
considering this fund has been around for 18 years.

Other notable funds by this AMC are ICICI Prudential Nifty Next 50 Index Fund, ICICI
Prudential Top 100 Fund, among others. ICICI Prudential Mutual Fund has a total of 1459
different mutual funds in its offering. This is easily the most number of funds offered by any
AMC on this list.

2. HDFC Mutual Fund

This AMC was launched in 1999. In 2003, they acquired 8 funds held by Zurich India Mutual
Fund. HDFC Top 200 Fund and HDFC Equity Fund among others were earlier Zurich funds.

In terms of AUM, HDFC Mutual Fund comes a close second, managing a total ₹221,825 crore
worth of assets. The total number of funds offered by HDFC Mutual Fund is an astounding 890
funds. Though this number might seem small in front of the number of funds offered by ICICI
Prudential Mutual Fund, it is no small number when viewed individually.

HDFC Balanced Fund has returned a very impressive 16.97% return since its launch in 2000.
The AUM at present is ₹13,824 crore. Other notable funds by this AMC are HDFC Index Fund –
Nifty Plan and HDFC Index Fund – Sensex.

3. Reliance Mutual Fund

Although the AUM at ₹195,845 is less than that of HDFC Mutual Fund, Reliance Mutual Fund
offers a whopping 1033 funds. Reliance Mutual Fund as an AMC enjoys a healthy amount of
popularity in India. It handles the largest amount of assets beyond the top 15 cities of India.

Reliance Small Cap Fund, launched in 2010 has returned a very high 21.28% since inception.
Needless to say, being a small cap fund, it is rated as a high-risk fund. Other mention worthy
funds by this AMC are Reliance Index Fund – Nifty Plan, Reliance Regular Savings Fund –
Balanced, and various others.

4. Birla Sun Life Mutual Fund

Birla Sun Life Mutual Fund manages ₹180,808 as of today. This fund house manages a total of
636 funds. This AMC is a joint venture between Birla Group of India and Sun Life Financial Inc.
of Canada. Birla Sun Life Mutual Fund was started in 1994.

Birla Sun Life Frontline Equity Fund has returned an astounding 22.56% since inception in 2002.
This rate of performance is very good for a large cap mutual fund. Another very good fund by
this AMC is Birla Sun Life Tax Relief 96. This fund is an ELSS fund and helps people save tax
under Section 80C.

5. Kotak Mahindra Mutual Fund

At the seventh position, Kotak Mahindra Mutual Fund has an AUM of ₹82,135. They offer a
total of 316 mutual funds which is relatively lower than what the other AMCs on this list
provide.

Launched in 2009, Kotak Select Focus Fund has since returned an annualized rate of return of
15.59%. It has an AUM of ₹11,590. Kotak Taxsaver is an ELSS mutual fund which is very
popular for saving tax.

6. Franklin Templeton Mutual Fund

Franklin Templeton Mutual Fund has an AUM of ₹75,783 and offers the least number of mutual
funds among all names on this list. Franklin Templeton is actually an American financial
services company that was established in 1947. It’s Indian office was set up in 1996 and the
company has been a leader in the mutual fund domain ever since.

Launched in 2005, Franklin India Flexi Cap Fund has returned an annualized rate of 17.58%
since inception. Such a rate is considered very good as this fund is a large cap fund. Another very
noteworthy fund among others is Franklin India High Growth Companies Fund. This multi cap
fund launched in 2007 has returned a rate of 13.76% despite weathering the market crash of
2008.
ICICI Bank is India's second greatest bank and greatest private section deal with a record with
assets of Rs. 2958.32 billion as on December 31, 2oo6. ICICI Bank gives a wide scope of
budgetary organizations to individuals and associations. This consolidates home advances,
vehicle and individual advances, credit and platinum cards, corporate and agricultural back. The
Bank benefits a creating customer base through a multi-channel get the opportunity to arrange
which joins in excess of 695 branches and development counters, 3o51 ATMs, call centers
andInternet setting aside extra cash.

PrudentialPLC
Set up in London in 1848, Prudential plc, through its associations in the UK and Europe, the US
and Asia, gives retail budgetary organizations things and organizations to in excess of 21 million
clients, policyholder and unit holders around the world. Today, Prudential has a huge number of
clients worldwide and over £238 billion (starting at 3o June 2oo6) of assets under administration.
In Asia, Prudential is the main European disaster protection organization with an immense
system of life and store the board tasks in thirteen nations - China, Hong Kong, India, Indonesia,
Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand, Vietnam and United Arab
Emirates
 CHAPTER: 4
PERFORMANCE EVALUATION

PERFORMANCE EVALUATION
 Leading Tax-Saving funds

Tax-Saving Funds NAV 1-yr 3-yr 5-yr Std Sharpe

(Cr’s) (%) (%) (%) Dev Ratio

(%) (%)
45.76 116.8 91.7 29.5 8.79 o.46
MAGNUM

HDFC- TAX SAVER 99.6 92.6 79.9 42.2 9.o3 o.49

ICICI- TAX PLAN 59.89 76.8 78.5 4o.3 9.87 o.42

HDFC ADVANTAGE 66.47 61.2 75.o - 8.81 o.51

BIRLA EQUITY 46.56 58.9 72.o 29.3 7.87 o.42

TATA TAX SAVING 32.54 53.1 72.3 3o.4 7.11 o.41

SUNDARAM TAX SAVER 21.89 59.9 63.5 31.5 9.55 o.42

FRANKLIN INDIA 87.43 5o.o 58.3 28.o 6.77 o.39

Interpretation:
MAGNUM has NAV of Rs. 45.76 crs. Having std of 8.79% by using sharpe ratio it has
o.46%.
HDFC TAX SAVER has NAV of Rs. 99.6 crs. Having std of 9.o3% by using sharpe ratio
it has o.49%.
ICICI TAX PLAN has NAV of Rs. 66.89% crs. Having std of 9.87% by using sharpe ratio it has
o.42%.
HDFC ADVANTAGE has NAV of Rs. 66.47% crs. It has standard deviation 8.81% by
using sharpe ratio it has o.47%.
BIRLA EQUITY has NAV of Rs. 46.56% crs. It has standard deviation 7.87% by using
sharpe ratio it has o.42%.
TATA has NAV of Rs. 32.54% crs. It has standard deviation 7.11% by using sharpe ratio
it has o.41%.
 SUNDARAM has NAV of Rs. 21.89% crs. It has standard deviation 9.55% by using
sharpe ratio it has o.42%.
FRANKLIN has NAV of Rs. 87.43% crs. It has standard deviation 6.77% by using
sharpe ratio it has o.39%.

PruICICI Tax Plan

 NAV (As on 15-April-17):

 Growth option: Rs. 91.86

Rs.1o,ooo invested at inception: Tax Plan Vs S&P CNX Nifty:

Performance Record*:

Growth Option:
Sector Allocation:
Portfolio:-

Market Value % to
Company / Issuer
( Rs Lakh) NAV
Auto 325.74 1.34%
Hero Honda Limited 325.74 1.34%
Auto Ancillaries 3o16.92 12.42%
• Sundaram Clayton Limited 946.85 3.9o%
• Exide Industries Limited 787.27 3.24%
Sundaram Brake Linings Ltd 283.17 1.17%
Kesoram Industries Limited 262.88 1.o8%
Rane Madras Limited 25o.73 1.o3%
Rane Holdings Limited 25o.32 1.o3%
Rane Brake Linings Ltd 235.7o o.97%
Banks 769.45 3.17%
Corporation Bank 374.o6 1.54%
PNB 243.21 1.15%
Bank of Baroda 116.18 o.48%
Cement 1373.21 5.65%
• Century Textiles & Industries Ltd 972.96 4.oo%
Orient Paper & Industries Limited 254.86 1.o5%
Pokarna Ltd 145.39 o.6o%
Chemicals 1467.74 6.o4%
Andhra Sugars Ltd 722.1o 2.97%
India Glycols Limited 334.76 1.38%
Navin Flourine International Ltd 264.32 1.o9%
Ultramarine & Pigments Ltd. 146.56 o.6o%
Consumer Non-Durable 2o13.94 8.29%
• Mawana Sugars Ltd 85o.56 3.5o%
Pidilite Industries Limited 575.3o 2.37%
Godrej Consumers 474.49 1.95%
Harrisons Malayalam Limited 98.65 o.41%
United Breweries Ltd 14.94 o.o6%
Ferrous Metals 49.94 o.21%
Tayo Rolls Ltd 49.94 o.21%
Fertilizers 2o23.34 8.33%
• DCM Shriram Consolidated Limited 842.12 3.47%
Gujarat State Fert & Chem Limited 724.13 2.98%
Zuari Industries Limited 457.o9 1.88%
Finance 19.o7 o.o8%
Reliance Capital Ventures Ltd 19.o7 o.o8%
Market Value % to
Company / Issuer
( Rs Lakh) NAV
Hardware 429.41 1.77%
HCL Infosystems Ltd 429.41 1.77%
Hotels 486.9o 2.oo%
Taj Gvk Hotels & Resorts Ltd 3o1.56 1.24%
Oriental Hotels Limited 185.34 o.76%
Industrial Capital Goods 1o11.42 4.16%
Aban Lloyd Chiles Offshore Limited 759.o6 3.12%
Numeric Power Systems Ltd 252.36 1.o4%
Industrial Products 12o2.44 4.95%
Polyplex Corporation Limited 354.78 1.46%
M M Forgings Limited 342.64 1.41%
Supreme Industries Limited 261.68 1.o8%
Esab India Limited 243.34 1.oo%
Minerals/Mining 2o8.54 o.86%
Gujarat Mineral Development Corporation
Ltd 2o8.54 o.86%
Non-Ferrous Metals 11o4.8o 4.55%
• National Aluminium Company Limited 11o4.8o 4.55%
Oil 11o.23 o.45%
Hindustan Oil Exploration Ltd 1o6.26 o.44%
Reliance NL Ltd 3.97 o.o2%
Petroleum Products 567.o1 2.33%
Reliance Industries Limited 567.o1 2.33%
Pharmaceuticals 3298.46 13.58%
• Sun Pharmaceuticals Limited 1356.49 5.58%
• FDC Limited 1o62.67 4.37%
• Cadila Healthcare Limited 8o7.91 3.33%
Fulford India Limited 71.39 o.29%
Power 1o7.66 o.44%
Gujarat Industries Power Co Limited 69.77 o.29%
Reliance Energy Ventures Ltd 37.89 o.16%
Software 848.21 3.49%
Subex Systems Limited 57o.o1 2.35%
KPIT Infosystems 278.2o 1.14%
Telecom Services 129.37 o.53%
Reliance Communications Ventures Ltd 129.37 o.53%
Textiles - Cotton 981.22 4.o4%
Porcot Mills Ltd 724.4o 2.98%
Maral Overseas Limited 256.82 1.o6%
Textiles - Products 8o8.97 3.33%
Market Value % to
Company / Issuer
( Rs Lakh) NAV
Raymond Limited 692.91 2.85%
K. G. Denim Limited 112.25 o.46%
Nitin Spinners Ltd 3.81 o.o2%
Textiles - Synthetic 828.3o 3.41%
• SRF Limited 828.3o 3.41%
Cash, Call, CBLO & Reverse Repo 245.o6 1.o1%
Other Current Assets 87o.o8 3.58%
Total Net Assets 24297.43 1oo.oo%

Quantitative Indicators:

Portfolio turnover has been computed as the ratio of the higher value of average purchase
and average sales, to the average net assets in the past one year (since inception for schemes that
have not completed a year). The figures are not netted for derivative transactions.

Rs In Crs
Assets held as on Jan 31, 2o17 Rs 14,277 Crs
Equity 59% 8,41o
Debt 41% 5,867
Total 1oo% 14,277

Assets held by :

Other than Linked policy

2,414
holders
Linked policy holders 11,863
14,277
KOTAK ELSS

Open – Ended Equity Linked Saving Schemes

About the Scheme:

 A diversified equity scheme that invests in equity and equity related securities and enable
investors to avail the income tax rebate, as permitted from time to time. The investment strategy
is to have 8o – 1oo % in equity portion and o – 2o% in one equity portion.
Ideal Investment Horizon: 3 years and above.
Corpus: Rs.1o6.73 crores
Ratio: Portfolio P/E : 27.o7
 NAV (As on 31 – January – o6):
o Growth option: Rs.11.586
 NAV (As on o5 – April – o7):
o Growth option: Rs.13.72

Performance:

Sector Allocation:
Portfolio:-

% to Net
Name of the Instrument Industry/ Rating
Assets
Equity & Equity Related (Listed/ Awaiting
listing)
Jaiprakash Associates Ltd Construction 3.88
National Aluminium Company Ltd Non-Ferrous Metals 3.66
Areva T and D India Ltd. Industrial capital Goods 3.62
Television Eighteen India Ltd. Media & Entertainment 3.51
Mcdowell & Company Ltd. Consumer Non Durables 3.41
Pantaloon Retail (india) Ltd. Retailing 3.29
MRF Limited Auto Ancillaries 2.84
HDFC Ltd. Finance 2.75
Infosys Technologies Ltd. Software 2.72
Alembic Ltd. Pharmacuticals 2.67
Alfa Laval (India) Ltd Industrial capital Goods 2.63
EID Parry (India) Ltd. Consumer Non Durables 2.58
Andhra Sugars Ltd Chemicals 2.57
TajGVK Hotels & Resorts Limited Hotels 2.56
Nestle India Ltd. Consumer Non Durables 2.55
Centurion Bank of Punjab Ltd. Banks 2.47
Hindalco Industries Ltd Non-Ferrous Metals 2.28
KPIT Cummins Infosystems Ltd. Software 1.46
HCL Infosystems Ltd. Hardware 1.37
 % to Net
Name of the Instrument Industry/ Rating
Assets
Celebrity Fashions Ltd. Textile Products 1.28
Marico Ltd. Consumer Non Durables 1.24
Deccan Chronicle Holdings Ltd. Media & Entertainment 1.15
Indo Gulf Fertilizer Ltd. Fertilisers o.99
Ipca Laboratories Ltd. Pharmacuticals o.89
Texmaco Ltd. Industrial capital Goods o.49
GVK Power & Infrastructure Ltd. Power o.18
Sadbhav Engineering Ltd. Construction o.16
Total 91.o3 91.o3
Money Market Instruments
Commercial Papers/Certificate of Deposits
Corporate Debt / Financial Institutions
Citifinancial Consumer Finance India Ltd. P1+ o.87
Total o.87
Collateral Borrowing & Lending Obligation 1.75
Net Current Assets/(Liabilites) 6.35
Grand Total 1oo.oo

Principal Tax Saving Fund

An Open – Ended Equity Linked Saving Schemes

Sector Strategy:
portfolio:-

Instrument Industry % of NAV

BHEL Industrial Capital Goods 5.32
Reliance Industries Ltd Petroeum Products 4.95
Godrej Industries Ltd Chemicals 4.24
Maharashtra Seamless Ltd Ferrous Metals 3.99
ONGC Ltd Oil 3.36
Godrej Consumer Products Ltd Consumer Non Durables 3.28
United Breweries Holding Ltd Finance 3.26
Crompton Greaves Ltd Industrial Capital Goods 3.16
Automative Axles Ltd Auto Ancillaries 3.14
SBI Banks 3.1o
Pantaloon Retail (I) Ltd Retailing 3.o5
Greaves Cotton Ltd Industrial Products 3.o3
Jaiprakash Associates Ltd Construction 3.o1
Goodlass Nerolac Paints Ltd Consumer Non Durables 2.9o
HDFC Bank Ltd Banks 2.83
Mahindra and Mahindra Ltd Auto 2.81
Omax Auto Ltd Auto Ancillaries 2.79
Blue Star Ltd Consume Durables 2.63
Jindal Steel & Power Ltd Ferrous Metals 2.58
PVR Ltd Media & Entertianment 2.51
Blue Dart Express Ltd Courier 2.29
Instrument Industry % of NAV
Kirloskar Brothers Ltd Industrial Products 2.25
Infosys Technologies Software 2.1o
Rajshree Sugars & Chemicals Ltd Sugar 2.o9
ABB Ltd Industrial Capital Goods 2.o6
CESC Power 1.98
Hindustan Construction Company Construction 1.78
Ltd
Spice Jet Ltd Transport 1.7o
Mahavir Spinning Mills Ltd Textiles - Cotton 1.58
The South Indian Bank Ltd Banks 1.55
Graphite Ltd Industrial Products 1.51
EID Parry Ltd Consumer Non Durables 1.27
Mid-day Multimedia Ltd Media & Entertianment 1.26
Reliance NL Ltd Gas 1.22
Super Sales Ltd Textiles - Cotton 1.14
Bannari Amman Sugar Ltd Consumer Non Durables 1.o7
Vardhaman Spinning & General Finance o.93
Mills
 Cash, Call and Other Assets 6.28
Net Assets 1oo.oo

Franklin India Taxshield

Investment Style:
The fund manager seeks steady growth by maintaining a diversified portfolio of equities
across sectors and market cap ranges.
Investment Objective:
Aims to provide medium to long term growth of capital along with income
tax rebate.
Date of Allotment: April 1o, 1999

Latest NAV:
(As on 31 – January – o6):
Growth Plan Rs. 11o.51
Dividend Plan Rs. 34.85
 NAV (As on o5 – April – o7):
o Growth option: Rs.118.47

Fund Size: Rs. 236.51 crores

Turnover: Portfolio Turnover 71.48%
Standard Deviation: 6.35
R-squared: o.92
Beta: o.83
Sharpe Ratio*: o.6o
* Risk-free rate assumed to be 5.o3% (based on JP Morgan 3 month T-Bill Index)
Expense Ratio: 2.43%
Minimum Investment/ Multiples for New Investors: Rs.5oo/5oo
Additional Investment/ Multiples for Existing Investors: Rs.5oo/5oo
Tax Benefits:
Investments will qualify for tax benefit under the new Section 8oC as amended by the
Finance Act 2oo5

Fund Manager’s Commentary:

The equity exposure of the fund has increased to 94.53% from 88.71% during the month,
as we deployed the cash position. The main addition to the portfolio was Reliance Capital.
Exposure to FMCG and finance sectors has gone up, while that to software and media has come
down.

Rs.1o,ooo invested at inception in FIT & S&P CNX 5oo:

Sector Strategy:
 Reliance Tax Saver (ELSS) Fund

FUND DATA

Structure: Open-ended Equity Linked Savings Scheme

Corpus: Rs 1,196.31 crore (March 31, 2oo6)

Minimum Investment: Rs 5oo & in multiples of Rs 5oo

Entry Load: <2cr - 2.25%; =2cr <5cr - 1.25%; =5cr - Nil

Exit Load: Nil
 NAV (As on 31 – January – o6):
o Growth option: Rs.13.51
 NAV (As on o5 – April – o7):
o Growth option: Rs.13.1o
INVESTMENT OBJECTIVE:

The primary objective of the scheme is to generate long-term capital appreciation from a
portfolio that is invested predominantly in equity and equity-related instruments.

Sector Allocation:

%
Industry
Allocation
Auto 12.96
Industrial Capital Goods 12.39
Software 9.36
Banks 8.7
Auto Ancillaries 6.16
Cement 5.28
Consumer Non Durables 4.52
Industrial Products 4.36
Pharmaceuticals 4.22
Ferrous Metals 3.9
Textiles 3.73
Petroleum Products 3.31
Chemicals 2.4
Fertilisers 2.22
Textile Products 1.99
Power 1.74
Steel 1.39
Telecom Services 1.29
Media & Entertainment 1.1
%
Industry
Allocation
Dredging o.89
Construction o.72
Industrial Machinery o.44
Retail o.11
Engineering o.o8
Oil o.o6
Total 93.32
INTERPRETATION:

• Mutual assets dwarf exchanged securities.

• Mutual assets have various target capacities which lead to detectably unique exchanging styles.
These styles include:
• A wide assortment of firms that exchange on news with respect to the gift stuns of people. In
reality this may compare to principal explore about how different parts of the economy are
doing.
• A value subsidize that exchanges just on the harmony cost – basically a specialized exchanging
store.
• A reserve that just exchanges a settled measure of stock – fundamentally a file support.
• Adding common assets to the economy builds stock value instability. This outcome stands out
pointedly from models where supports act like individuals with utility capacities. In those papers
extra assets diminish unpredictability.
• Since numerous assets have requests which are totally cost inelastic, the presentation of an
extra such reserve does not straightforwardly influence the hazard rebate in the costs of
dangerous securities. There might be such an impact, however it works through an adjustment in
speculators' suggested hazard revultions.
• Generally, new assets ought to be supplied with exchanging systems which are maximally
unique in relation to those of existing assets.
 CHAPTER: 5
FINDINGS, CONCLUSIONS AND SUGGESTIONS
 CONCLUSION

Minimum Tax saving is Rs 1000 and the maximum Tax saving is 30000.
An Person can make use of this funds and schemes to save tax by investing maximum of
Rs 1,00,000.
It is observed that the lower risk with the higher returns is the highlight of the mutual
funds. In this tax saving funds,there are two type of benefits , first is saving the tax and
theother is for the money invested in that no need to pay any type of tax.
According to the NAV the Principal Tax Saving Plan Fund is good.
Even though The fund will be in market for a long time but also the return of the fund is
high.
the investor can invest in the Principal Tax Saving Plan Fund or ICICI PRUDENTIAL
Tax Plan Fund .
investor has to look for the lesser the fluctuations and the fund does not have frequent ups
and downs in the market.
So the fund manager has maintained the fund in a good order and the portfolio is
maintained in a desired way and same with the ICICI Tax Plan Fund, also the investor
can invest in any of the fund.
Relience Fund’s NAV has come down during this one year. The customer has to
Investigate properly before investing in Relience Tax Saver
While investing the main things are that has to be noted is that the fluctuations and
performance of fund during that period.
.
 FINDINGS


• Mutual assets dwarf exchanged securities.
• Mutual assets have various target capacities which lead to perceptibly
extraordinary exchanging styles.
These styles include:
• A wide assortment of firms that exchange on news in regards to the gift stuns of
people. In reality this may compare to key research about how different parts of
the economy are doing.
• A value support that exchanges just on the harmony cost – basically a specialized
exchanging store.
• A store that essentially exchanges a settled measure of stock – fundamentally a
file subsidize.
• Adding shared assets to the economy builds stock value instability. This outcome
stands out strongly from models where finances act like individuals with utility
capacities. In those papers extra assets diminish unpredictability.
• Since numerous assets have requests which are totally cost inelastic, the
presentation of an extra such store does not straightforwardly influence the hazard
rebate in the costs of unsafe securities. There might be such an impact, yet it
works through an adjustment in speculators' inferred hazard abhorrences.
• Generally, new assets ought to be invested with exchanging procedures which are
maximally not quite the same as those of existing assets.
 BIBLIOGRAPHY

News papers: -
The Economic Times
Business line
Magazines:- Business World
India Today