Executive Summery

EXECUTIVE SUMMERY
This report is all about the study of financial performance of SMC GLOBAL SECURITIES LTD. in
Delhi. In this, I studied annual report of SMC. My objective is to study the financial performance of the
SMC with the help of Mutual Fund Benefits & Asset Allocation.
For this report, Research Methodology used in descriptive research design. That design is related with
describing the characterstic of particular thing. In this, I define clearly what I want to measure and
employ adequate methods for measuring it. Data collected from annual report of different time period,
manual web-sites and weekly-published booklets.
In short span of time, SMC has achieved good financial position as a branch of SMC.
INTRODUCTION
Mutual Fund And Asset Allocation
1. SMC is one of the leading and experienced brokerage houses having its corporate office in Delhi,
besides offices in Mumbai, Kolkata and a mammoth network of more than 500 offices spread
across the country.
2. Member of NSE, BSE, F&O, NCDEX, MCX, DGCX, Clearing Member in NSE Derivative
Segment & DGCX and ISO 9001: 2000 certified DP for shares and commodities.
3. We offer large avenues of Investment Solutions, catering to all classes of Investors.
4. Promoted and lead by a team of professionals having rich experience in the capital markets of
more than 15 years.
5. Providers of one of the best trading platforms to trade in NSE, BSE, NCDEX, MCX and DGCX.
6. We have the most advanced, hi-tech in house R&D wing equipped with some of the best people,
process and technology resources providing complete research solutions on Equity,
Commodities, IPOs and Mutual Funds.
7. SMC has expanded, globally by acquiring Trading & Clearing Membership of Dubai Gold and
Commodity Exchange (DGCX).
8. SMC is contributing one of the highest average daily turnovers in NSE, F&O, BSE, NCDEX
&MCX.
9. Dedicated and highly motivated workforce of more than 1000 personnel drawn from diverse
academic backgrounds, such as CA, CS, ICWA, M.B.A and IT.
VISION
To be a global major in providing complete investment solutions, with relentless focus on investor care,
through superior efficiency and complete transparency.
CORE VALUES
CORE VALUE
ND SERVICE
PRODUCTS & SERVICES
EQUITY TRADING
 Derivative Trading.
 Commodities Trading.
 Commodities Trading in International Markets through DGCX.
 Mutual Fund & IPO Distribution.
 Depository Services (ISO 9001:2000) for Shares & Commodities.
 Real time Internet Trading.
 Web based accounting.
 Research support to the clients through SMS and E-mails.
 Clearing Services for Trading Members in NSE F&O and DGC
FOUNDERS & PROMOTERS
Mr. Subhash Chand Aggarwal Mr. Mahesh Gupta
Mr. Subhash Chand Aggarwal, Chairman and Managing Director of SMC Global Securities Ltd. and
Mr. Mahesh Chand Gupta, Chairman and Managing Director of SMC Comex (P) Ltd. are the founders
and promoters of SMC. Both are chartered accountants. They are an embodiment of professional
excellence. They are the visionaries who planted the sapling of the giant tree called SMC. With rock
solid reserve and firm commitment, they have shaped their vision to reality. They have a rich experience
of more than 20 years in the capital market. Their exceptional leadership skills and outstanding
commitment has made SMC as one of the leading investment solutions and services provider. They both
assign top priority to the principles of transparency, honesty and integrity in all our dealings.
Both of them are professionals to the core. Their specialization in risk management and surveillance and
their disciplined style of working is an inspiration to the workforce of SMC. Their experience of the
securities as well as the commodity market and their leadership qualities has made SMC a force to
reckon with
APPROACHES OF SMC
VALUE FOR INTEGRIT

INVESTOR’ Y AND
S TRUST HONESTY
APPROACH OF SMC
PERSONALIZE NETWORK
D ATTENTION WHICH
WORKS
1. VALUE FOR INVESTOR'S TRUST : We value the trust reposed in us by our clients and
are committees to uphold it at all cost.
2. INTEGRITY AND HONESTY: We at SMC are men of integrity and believe in

transparency and discipline.
3. PERSONALIZED ATTENTION: Our most valued asset is our relationship with the clients,
which we have built by giving personalized attention to all our clients.
4. NETWORK WHICH WORKS: We have a vast network extending to 130+cities but we
ensure that it WORKS for the investors in terms of accessibility, convenience and hassle free
trading experience.
WORK CULTURE OF SMC GLOBAL SECURITY LTD.

Surrounded by a world of flux and change, the surest way to enrich your existence is to continuously
learn and grow. Our practices around the world offer the resources to help you evolve: personally,
professionally and intellectually.
Inside the office, our collaborative, people-focused culture encourages mutual respect, open
communications and ongoing learning. Broaden your career path and your mind through our globally
based education initiatives, performance management programs, mentoring programs and regular
performance feedback.
Outside the office, you'll have time for the people you care about most. In many locations, we offer
flexible work arrangements and other work/life harmony programs, as well as a variety of benefits
tailored to meet your individual needs.
Think... For us at SMC Global Securities Ltd., this is more than a mere statement - it is a theme
around which, our business models are built.
At SMC Global Securities, our aim is not only getting the job done, but ensuring that the teams evolve
into smarter knowledge pool. We believe in stimulating intelligence that is built around creative
thinking. Consistent training on latest technologies and industries is an integral part of working @ SMC
Group.
Getting work done is important, however enjoying while you're doing it, is more important. At SMC, the
environment is challenging, driven to better results, while at the same time it also aimed at building our
people into world-class information technology professionals.
HISTORICAL PRESPECTIVE OF INDIAN MUTUAL FUND
The mutual fund industry in India started in 1963 with the formation of UTI, at the initiative of the
Government & RBI.
UTI functioned under the Regulatory and administrative control of the RBI. In 1978 UTI was de-linked
from the RBI and IDBI took over the regulatory and administrative control in place of RBI. The first
scheme launched by UTI was Unit Scheme 1964.
With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry2003,
UTI was bifurcated into two separate entities. One is the Specified Undertaking of the UTI with of
Rs.29, 835 crores as at the end of January 2017, representing broadly, the assets of US 64 scheme,
assured return and certain other schemes. The Specified Undertaking of UTI, functioning under an
administrator & rules framed by Government.
The second is the UTI Mutual Fund Ltd., 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 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. As at the end of September 2018, there were 29 funds, which manage assets of
Rs.153108 crores under 421 schemes.
INTRODUCTION
A mutual fund is a pool of money, collected from investors, and is invested according to certain
investment objectives.
A mutual fund is created when investors put their money together. It is therefore a pool of the investors’
funds. The most important characterstic of a mutual fund is that the contributors and the beneficiaries
of the fund are the same class of people, namely the investors. The term mutual means that investors
contribute to the pool, and also benefit from the pool. There are no other claimants to the funds. The
pool of funds held mutually by investors is the mutual fund.
MEANING: An instrument that empowers investors to a well-diversified portfolio of equities, bonds

& other securities. Each shareholder participates in the gain or loss of the fund.
DEFINITION: “A mutual fund is a collective investment that allows investors tom pool participates
in larger and diversified portfolio.
TYPES OF MUTUAL FUND
Mutual fund schemes may be classified on the basic of its structure and its investment objectives: -
By Structure
Open-ended Funds
An open-end fund is one that is available for subscription all through the year. These do not have a fixed
maturity. Investors can conveniently buy and sell units at Net Asset Value ("NAV") related prices. The
key feature of open-end schemes is liquidity.
Closed-ended Funds
A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. The fund
is open for subscription only during a specified period. Investors can invest in the scheme at the time of
the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges
where they are listed.
Interval Funds
Interval funds combine the features of open-ended and close-ended schemes. They are open for sale or
redemption during pre-determined intervals at NAV related prices.
Balanced Funds
The aim of balanced funds is to provide both growth and regular income. Such schemes periodically
distribute a part of their earning and invest both in equities and fixed income securities in the proportion
indicated in their offer documents. In a rising stock market, the NAV of these schemes may not
normally keep pace, or fall equally when the market falls. These are ideal for investors looking for a
combination of income and moderate growth.
Load Funds
A Load Fund is one that charges a commission for entry or exit. That is, each time you buy or sell units
in the fund, a commission will be payable. Typically entry and exit loads range from 1% to 2%. It could
be worth paying the load, if the fund has a good performance history.
No-Load Funds
A No-Load Fund is one that does not charge a commission for entry or exit. That is, no commission is
payable on purchase or sale of units in the fund. The advantage of a no load fund is that the entire corpus
is put to work.
OTHER SCHEMES
Tax Saving Schemes
These schemes offer tax rebates to the investors under specific provisions of the Indian Income Tax laws
as the Government offers tax incentives for investment in specified avenues. Investments made in
Equity Linked Savings Schemes (ELSS) and Pension Schemes are allowed as deduction u/s 88 of the
Income Tax Act, 1961. The Act also provides opportunities to investors to save capital gains u/s 54EA
and 54EB by investing in Mutual Funds.
SPECIAL SCHEMES
 Index Schemes
Index Funds attempt to replicate the performance of a particular index such as the BSE Sensex or the
NSE 50
 Sectoral Schemes
Sectoral Funds are those, which invest exclusively in a specified industry or a group of industries or
various segments such as 'A' Group shares or initial public offerings.
 Industry Specific Schemes
Industry Specific Schemes invest only in the industries specified in the offer document. The investment
of these funds is limited to specific industries like InfoTech, FMCG, and Pharmaceuticals etc.
TYPES OF PRODUCTS
Depending on the investment portfolio that is created, the following are the types of products that are
offered by mutual fund:
 Equity funds
 Debt funds
 Balanced funds
Equity funds: Equity funds are those that invest pre-dominantly in equity shares of companies. There
are a variety of ways in which an equity portfolio can be created for investors.
There are thus the following choices in equity funds:

1) Simple equity funds
2) Primary market funds

3) Sectoral funds
4) Index funds
5) Other equity funds
Debt funds:
It is those that pre-dominantly invest in debt securities. Since more debt securities pay periodic interest
to investors, these funds are also knows as income funds. The universe of debt securities comprises of
long term instruments such as bond issues by a central & state governments, public sector organizations,
public financial institution & private sector companies; and short terms instruments such as call money
lending; commercials papers; certificates of deposits; & treasury bills. Debt funds tend to create a
variety of options for investors by choosing one or more of these segments of the dept market in their
investment portfolio.
What are gilt funds?
It invests only in securities that are issued by the government, & therefore does not carry any credit risk.
These funds invest in short & long-term securities issued by the government. These funds are preferred
by institutional investors who have to invest only in government paper. These funds also enable retail
investors to participate in the market for government securities, which is otherwise a large-ticket
wholesale market.
Balanced funds?
Funds that invest in debt & equity market are called balanced funds. A typical balanced fund would be
almost equally invested in both the markets. The variations are fund that invest pre-dominantly in equity
(about 70%) & kept a smaller part of their portfolio in debt securities. Balanced funds also tend to
provide investors exposure to both equity & dept markets in a one products. Therefore the benefits of
diversification get further enhanced, as equity & debt markets have different risk & return profile.
BENEFITS OF THE MUTUAL FUND
Mutual fund is very effective & helpful in achieving the individual goals. Because it provides many
benefits to the investors. These benefits are as under: -
1.Professional:
Fund manager are professionals who track the market on an on-going basis. With their mix of
professional qualification and market knowledge, they are better placed than the average investor to
understand the markets.
2.Diversification:
Since a Mutual Fund scheme invests in number of stocks and/or debentures, the associated risks are
greatly reduced.
3.Less Expensive:
This is due to savings in brokerage costs, demat costs, depository costs When compared to direct
investments in the capital market, Mutual Funds cost less. Etc.
4.Liquidity:
Investments in Mutual Funds are completely liquid and can be redeemed at their Net Assets Value-
related price on any working day in the open ended fund.
5.Transparency:
You will always have access to up-to-date information on the value of your investment in addition to the
complete portfolio of investments, the proportion allocated to different assets and the fund manager’s
investment strategy.
6. Return Potential :
Over a medium to long-term, Mutual Funds have the potential to provide a higher return as they invest
in a diversified basket of selected securities
7. Affordability:
Investors individually may lack sufficient funds to invest in high-grade stocks. A mutual fund because of
its large corpus allows even a small investor to take the benefit of its investment strategy.
Any income distributed after March 31, 2002 will be subject to tax in the assessment of all Unit holders.
CONCLUSION:
A mutual fund is a pool of money, collected from investors, and is invested according to certain
investment objectives.
Its benefits explain its importance in finance. Each mutual fund related those points.
Does investing in mutual funds mean investing in equities?

Mutual funds can be divided into various types depending on asset classes. They can also invest in debt
instruments such as bonds, debentures, commercial paper and government securities apart from equity.
Every mutual fund scheme is bound by the investment objectives outlined by it in its prospectus. The
investment objectives specify the class of securities a mutual fund can invest in. Based on the
investment objective, the following types of mutual funds currently operate in the country.
Growth Schemes
Income Schemes
Balanced Schemes
Money Market Schemes
What is NAV & how is it calculated?

Net Asset value is the actual value of units of the scheme on a given business day. NAV reflects the
market value of the fund's investments on that day after accounting for all the expenses.
The current value of investment of a scheme can be known from the NAV (Net Assets Value). The
NAV in real sense measures the value of net assets invested in the scheme (Gross assets –Gross
Liabilities)

Total Assets – Total Liabilities

NAV =
No. of Units Outstanding
NAV = Market Fair value of scheme investments+

Accrued income+ other assets+ Receivables--
Accrued Expenses-Payables-Other liabilities

Number of outstanding Units.
Can the NAV of a debt fund fail?
A debt fund invests in fixed-income instruments, where safety of capital and regular returns are assured.
These include Commercial Paper, Certificates of Deposit, debentures and bonds. While the rate of
interest on these instruments stays the same throughout their tenure, their market value keeps changing,
A debt fund's NAV is the market value of its portfolio holdings at a given point in time. As interest rates
change, so do the market value of fixed-income instruments - and hence, the NAV of a debt fund. Thus
it is a misnomer that the debt fund's NAV does not fall.
Performance Measures of Mutual Funds
Mutual Fund industry today, is one of the most preferred investment avenues in India. But, with a
numbers of schemes to choose from, the retail investor faces problems in selecting funds. Factors such
as investment strategy and management style are qualitative, but the funds record is an important
indicator too. It is, frankly, the only quantitative way is not right to judge how good a fund is at present.
Therefore, there is a need to correctly assess the past performance of different mutual funds.
These fluctuations in the returns generated by a fund are resultant of two guiding forces.
First, market risk or systematic risk and second, unsystematic risk, the total risk of a given fund is sum
of these two and is measured in terms of standard deviation of returns of the fund. Systematic risk is
measured in terms of Beta. Beta is calculated by relating the returns on a mutual fund with the returns in
the market. While unsystematic risk can be diversified through investments in a number of instruments,
systematic risk cannot. By using the risk return relationship, we can assess the competitive strength of
the mutual funds vis-à-vis one another.
Reason for measure fund performance
1. An investor needs to understand the basis of appropriate performance for the fund, and acquire
the basic knowledge of measure the performance of a fund. This will help him to measure the
performance of his fund and take right decisions.
2. An advisor will be able to know how to measure and evaluate the funds performance, compare
them and offer proper advice to an investor.
The most important and widely used measures of performance are:
Ø The Treynor Measure
Ø The Sharpe Measure
Ø Jenson Model
The Treynor Measure

The fund’s performance is measured in relation to the market performance. The ideal fund’s return rises
at a faster rate than the general market performance when the market is moving upwards and its rate of
return declines slowly than the market return, in the decline.
It is a risk-adjusted rate of return measure that is calculated by dividing the assets risk premium by their
beta coefficient. Symbolically, it can be represented as:
Treynor's Index (Tn) = (Ri - Rf)/Bi
Where, Ri represents return on fund, Rf is risk free rate of return and Bi is beta of the fund.
All risk-averse investors would like to maximize this value. While a high and positive Treynor's Index
shows a superior risk-adjusted performance of a fund, a low and negative Treynor's Index is an
indication of unfavorable performance.
The Sharpe Measure
Sharpe ratio is a ratio of returns generated by the fund over and above risk free rate of return and the
total risk associated with it. Sharpe index measures the risk premium of the portfolio relative to the total
amount of risk in the portfolio. This risk premium is the difference between the portfolio’s average rate
of return and the risk less rate of return. The model evaluates funds on the basis of reward per unit of
total risk. Symbolically, it can be written as:
Sharpe Index (Si) = (Ri - Rf)/Si

Where, Si is standard deviation of the fund, Ri indicate average, return of fund, Rf is risk free return
While a high and positive Sharpe Ratio shows a superior risk-adjusted performance of a fund, a low and
negative Sharpe Ratio is an indication of unfavorable performance..
Jenson Model
This measure was developed by Michael Jenson. This measure involves evaluation of the returns that the
fund has generated vs. the returns actually expected out of the fund given the level of its systematic risk.
The surplus between the two returns is called Alpha, which measures the performance of a fund
compared with the actual returns over the period. Required return of a fund at a given level of risk (Ri)
can be calculated as:
Ri = Rf + Bi (Rm - Rf)
Where, Rm is average market return during the given period. After calculating it, alpha can be obtained
by subtracting required return from the actual return of the fund.
Risk management and the Mutual Funds
The basic objective of a mutual fund is to provide a diversified portfolio to investors. So, as to reduce
the risk. It is very daunting/discouraging to note that the drop in the NAV of some of the schemes is
higher than the erosion of value in some of the BSE/NSE stocks. With investment in volatile BSE/NSE
sectors being the driver of growth last season, almost everybody had taken big exposures to them.
The Beta of some of the favorite stocks is shown below. The Table contains the Beta of some of the ICE
scripts that constitute the top 10 holdings across various equity funds.
2.09 Taurus Libra Leap (5.68%), DSP ML Tech.

(6.06%)
DSQ Software Ltd.
Satyam Computer Services Ltd. 2.00 ING Growth Port (11.2%), Alliance Equity Fund
(9.7%), Chola freedom Tech (11.51%)
SSI Ltd. 1.98 IL&FS eCom (9.63%), LIC Dhansamridhi

(9.18%)
Wipro Ltd. 1.87 ING Growth (23.8%), Magnum Sector Fund

-Infotech (15%), Alliance Alliance New
Millennium (10%)
Himachal-Futuristic 1.82 UTI Sector- Services (9.48%), Taurus Discovery

Communications Ltd. Stock (10.45%)
Global Tele-Systems Ltd. 1.81 UTI US 92 (7.02%), ING Growth Portfolio

(3.8%)
Zee Telefilms Ltd. 1.70 UTI Sector- Services (7.21%), ING Growth
Portfolio (10.06%),
Infosys Technologies Ltd. 1.54 ING Growth Portfolio (20.5%), Alliance New
Millennium (11.5%)
We can see, some of the stocks are too volatile and can cause wild movements in the NAVs of funds.
The standard deviation of the returns in some of these funds points to it. While Alliance Equity Fund has
a Standard Deviation of 2.53, Birla Advantage has 2.57. ING Growth has 3.3, which is relatively high
due to its exposure to too volatile ICE scrips.
MEASURING RETURNS
An investor in mutual fund earns returns from two sources:
 Income from dividend paid by the mutual fund.
 Capital gains arising out of selling the units at a price higher than acquisition price.
The mutual fund invests the fund mobilized from the investor, in a portfolio of marketable securities.
Since the value of these securities can change over time, the mutual fund cannot assure a rate of return.
There is no technique by which the fund manager can accurately predict how the market prices will
behave in the future.
Methods for computing returns on investment in mutual fund .
The various methods for measuring mutual fund returns are as follows:
1. Percentage change in NAV
2. Simple total return
3. ROI or Total return with dividend re-investment.
4. Percentage change in NAV.
Percentage change in NAV is an absolute measure of return, which finds the NAV appreciation between
two points of time, as a percentage.
For a period equal to one year
Formula
Absolute change in NAV
NAV in the beginning
For a period more than one year
Formula
Difference in NAV
Beginning NAV
(n) Being the number of months between the beginning and end NAV.
This method is simple and very easy to calculate and understand. An important limitation also is that this
method does not take into account the dividends distributed by the fund. Therefore this method is more
useful for computing returns on growth options of mutual fund schemes. It may not be suitable for
computing returns on schemes with dividend distribution or withdrawal plans.
Total return method

The total return method takes into account the dividend distributed by the mutual fund, and adds it to the
NAV appreciation, to arrive at return. Example an investor bought units of mutual fund scheme at a
price of Rs.12.45 per unit. He redeems the investment a year latter, at Rs.15.475 per unit. During the
year, he also receives dividend at 7%. The rate of return on his investment can be compute as
{[(15.475-12.45)+0.70]/12.45}*100
= (3.725/12.45)/100
= 29.92%
The amount (15.475-12.45) represents the capital gain earned by the investor. 0.70 is the dividend
amount received which is 7% of Rs.10, the face value of the unit. The rate of return in the percentage
return the investor makes, on his investment Rs.12.45, from these two sources.
Simple annualized total return

It is customary to represent return as % per annum. The market it easier to compare the return from
various investment option, for a standard holding period. Therefore, if the holding period is different
from 1 year, we have to normalize the computation show above, as % p.a. let us assume that the capital
gain and dividend in the above e.g. were earned for a holding period of 250 days, and not 1 year. We can
then normalize the rate of as follows:
(3.725/12.45)*365/250*100
= 43.68%
The return is called the simple annualized return from investing in mutual fund.
The most important limitation of this method is that it does not take into account the re-investment of
dividends received in the intervening period.
RISK AND PERFORMANCE EVALUATION
Risk and its measurement

Risk arises out of the fact that returns do not remain constant or unchanged. Every changed in return is a
situation of risk for the investor. The simplest way to measure risk is to find out, over a period of time,
what is the average return from investing in a fund. If the actual returns earned by the investor are close
to the average, such a fund is less risky. If the return varies by larger amounts, around the average, the
fund is more risky.
We can measure risk as under:
Standard Deviation
The distance between the average return and the dispersion of actual returns around this average can be
measured with the help of a statistical measure called the standard deviation.
Bogle’s Ex-Marks or R- squared

This measure simple compares the returns from the fund and the return from a market index, over the
same period, and measures the extent of sympathy in their movement.
Beta coefficient
Beta determine the volatility, or risk of a mutual fund in comparison to that of its index. Fund with a
Beta very close to 1 means the fund’s performance closely matches the index. Benchmark.
The value of the Beta= Cov (Rp. Rm)/Var (Rm)
Cov (Rp. Rm) = Covariance between the portfolio return (Rp) and the market return (Rm)
Var (Rm) = Variance of the market return (Rm)
Covariance is a measure of variance of one variable with another variable. This can be calculated as:
Let,
The number of pair of portfolio and the index return=N
The return of portfolio =Rp
The market or index return =Rmi

Where the subscript I range from 1 to N, depending upon the specific value of the variable. Covariance
between portfolio and the market return, Cov (Rpi.Rmi) is then given by:
Cov (Rpi.Rmi) = {(Rpi-Rpi) (Rmi-Rmi)}/N
Where Rpi and Rmi are the average of the portfolio return (Rpi) and market return (Rmi) respectively.
Similarly, the variance of the market, Var (Rmi) is computed as follow:
Var (Rmi) ∑ (Rmi-Rmi)2 /N
BENCHMARKS
Benchmarks are independent portfolios that are not managed by any fund manager, but are
representative of the behavior of returns from the markets.
 If the scheme’s (OD) indicates a benchmark for return comparisons, the same should be used by
the scheme.
 Growth funds with more than 65% in equity should always use any of the standard equity market
indices like Sensex; NSE fifty, BSE 100 or Crisil 500.
What is meant by recurring sales expanses?

The Asset management Company charge the fund a fee for operating its schemes, like trustee fee,
custodian fee, registrar fee, transfer fee etc. This fee is called recurring expense and is expressed as a
percentage of the scheme's average net assets. The recurring expenses are subject to certain limits as per
the regulations of SEBI.
W WEEKLY AVERAGE NET ASSETS RS. EQUITY DEBT

FIRST 100CRORES 2.50% 2.25%
NEXT 300CRORES 2.25% 2.00%
NEXT 300CRORES 2.00% 1.75%
BALANCE ASSETS 1.75% 1.50%
TAX ASPECTS
The tax benefits for investing in mutual funds are as follows:
A mutual fund which is registered under the SEBI (mutual fund) regulation1996 is fully exempt from
paying tax on its income, under section 10(23D) of the IT act. Since it is only a pass through entity,
income is not taxed in the hands of the mutual fund.
Twenty percent of the amount invested in specified mutual funds (called equity linked savings schemes
or ELSS and loosely referred to as "tax savings schemes") is deductible from the tax payable by the
Investor in a particular year subject to a maximum of Rs.2000 per investor. This benefit is available
under section 88 of the I.T. Act.
A mutual fund has to pay a withholding tax of 10% on the dividends distributed by it under the revised
provisions of the I.T. Act putting them on par with corporate. However, if a mutual fund has invested
more than 65% of its assets into equity shares, then it is exempt from paying any tax on the dividend
distributed by it. The investor in a mutual fund is exempt from paying any tax on the dividend received
by him from the mutual fund, irrespective of the type of the mutual fund. This benefit is available under
section 10(33) of the I.T. Act.
The following calculations show this in more detail:
Purchase NAV = Rs.10
Sale NAV = Rs.11.2
Indexation component = 8%
Capital gains = 11.2 – 10(1.08)
= 11.2 – 10.8
= 0.4
Capital gains tax = 0.4*0.1 = 0.04.

If an investor buys a fresh unit in the closing days of March and sells it in the first week of April of the
following year, he is entitled to indexation benefit for two financial years, which close in the two March
ending periods. This is termed as double indexation and lowers the tax even further especially for
income funds. In the above example, the calculation would be as follows:
Capital gains = 11.2 – 10(1.08) (1.08)
= 11.2 – 11.7
= -0.5
Thus there would be no capital gains tax.
Taxation of Shares and Mutual Funds
There are three main points in regard to this year's Budget. The first point is in regard to the new share
transaction tax (STT). Originally, it was proposed to be levied at 0.15 per cent on all transactions of
purchases of securities on stock exchanges. But it was reduced on persistent demand from the share
broker and investors. This new tax will increase the cost of purchase every time you buy and sell listed
securities and mutual fund units.
Even in this respect, major changes have been made in this Budget.
Here is a bird's eye-view of the net result of changes in regard to these three points:
Securities Transactions Tax (STT)

Dividend Distribution Tax (DTT)
Long Term Capital Gains (LTCG)
Short Term Capital Gains (STCG)
In case of equity- oriented mutual funds

The unit holders will have to pay STT at the rate of 0.075 per cent at the time of purchase and sale of
units
STT is payable by MF and not by investor. MF has once again been exempted from DTT. Even in the
previous year, they were exempt
No LTCG tax is payable. In previous year, such profit was taxed10 per cent without indexation or 20
per cent with indexation, whichever is less

STCG is taxable at10 per cent. Previously, they are taxable as per normal tax rate i.e. 10 to 35 per cent
as the case may be
In case of debt oriented mutual funds

The unit holders will not have to pay STT
DTT is 12.5 per cent in case payee is individual or HUF, and 20 per cent if the payee is corporate or
other person as firm etc. Previously, both are same at12.5 per cent.
The LTCG tax rate is 20 per cent with indexation, and 10 per cent without indexation, whichever is
less.
STCG is taxable as per normal tax rate i.e. 10 to 35 per cent as the case may be
Non delivery based transactions; as day trader, arbitrageur or future & options
STT is 0.015 per cent in case of day traders etc. and 0.01 per cent in case of derivatives. But credit for
the same can be taken from normal income tax
DDT is not applicable as these traders do not take delivery
Not applicable as the profit is taxable as business profits, so tax rates are normal rate of taxation
Not applicable as the profit is taxable as business profits, so tax rates are normal rate of taxation
Delivery based transactions (in case of investor in securities)
The tax rate is now proposed at 0.075 per cent, payable by both the buyer and the seller upon delivery
of the securities
Companies have to pay DDT at12.5 per cent and dividend is exempted in the hand of payee as per
Section 10(34)
No tax payable on LTCG
Tax is payable @ 10 per cent on STCG
Delivery based transactions (in case of dealer in securities)
The STT is now proposed at 0.075 percent, payable by both the buyer and the seller upon delivery of
the securities. But credit for the same can be taken from normal income tax
Companies have to pay DDT at12.5 per cent and dividend is exempted in the hand of payee as per
Section 10(34).
Not applicable as the profit is taxable as business profits, so tax rates are normal rates of taxation
Not applicable as the profit is taxable as business profits, so tax rates are normal rates of taxation
In case of non- listed shares, etc.
STT is not payable as they are not traded on stock exchange

Companies have to pay DDT @ 12.5 per cent and dividend is exempted in the hand of payee as per
Section 10(34)
LTCG is payable at 20 per cent
STCG is taxable as per normal tax rate, i.e. 10 to 35 per cent as the case may be
The STT is tax levied on purchase and sale of certain securities on any recognized stock exchange.
Further the new rate of capital gain tax will also be applicable from that date; until then, the previous
rate will be applicable.
 The benefits of new transaction tax in case of investor can happen when the profits on the
transaction are more than 1.5 per cent of the purchase price of the securities. The more the
profits, the more they benefit. In case of loss, the loss will also be more.
 New DDT rates are effective from 9 July 2017.
 In some of the cases the mutual funds have to pay distribution tax instead of the payee having
to do the same. This is beneficial for assesses in the upper income bracket or chargeable at a
higher rate. It is adverse in case of those assesses who don't have any chargeable income.
 Dealer in securities means the people who do trading in securities instead of investment. The
difference between the trading and investment is one of the motives and very thin. In case of
 Investment, the securities are held for regular return (dividend) instead of gain from sale of
securities In case of Foreign Institutional Investors, the STCG -- referred to in Section 111A --
shall be calculated at the rate of 10 per cent. Previously, it was taxable at 30 per cent.
Tax provisions applicable after the finance act 20017-18
Dividends:
 Dividends from mutual funds are tax free in the hands of the investors.
 In the case of mutual fund scheme with more than 35% in debt, a dividend distribution tax is to be
paid by the mutual funds.
 In case of mutual fund schemes with more than 65% in equity, the dividend distribution tax is not
to be paid.
Capital Gain Tax Structure
Mutual funds are securities under the securities contract regulation act. Therefore, any holding that is
for a period of less than 12 months is considered short term; holding beyond 12 months is considered
long term. If units are redeemed by an investor, at a price that is higher than its acquisition price, the
investor earns a capital gain if the holding period of the investor is less than 12 months, such gains are
short-term capital gains. In the following way the capital gain is taxable.
Equity Debt
Long-term capital gain-Nil LTCG (individual)-11.22%
(10%+10% surcharge +2% cess)
LTCG (corporate)-22.44% cess

Short-term capital gain-10% STCG (individual)-33.66%
STCG (corporate)-39
In case of NRI
Equity Debt
Long-term capital gain-Nil Long-term capital gain-22.44%
Short-term capital gain-11.22% STCG (individual)-33.66%
(10%+10% surcharge +2% cess) (30%+10% surcharge +2% cess)
Dividend Distribution Tax:
INDIVIDUAL: 14.02% CORPORATE: 22.44%
(12.5%+10% surcharge +2% cess) (20%+10% surcharge +2% cess)
So, this was the case in which the securities of mutual fund comes under securities contract regulation
act. The holdings which comes within the year and beyond the particular year are calculated as per the
figure
Asset Allocation
INTRODUCTION
It is the key factor that will define the duration & in the some cases the probability for success in your
financial freedom. Without a proper asset allocation in place, your investments are constantly at the risk
of being wiped out by an unpredictable financial & economic disaster.
Using asset allocation will help you on the finance front of this bettle for security.
A proper asset allocation plan will progressively improved your security, whilst you securely building
your wealth.
We will look at what asset allocation is how to plan & how to maintain & grow your asset within the
framework of your new asset allocation.
SAMUEL BLANKSON
Definition:
“Asset allocation refers to the process of deciding the composition of a portfolio. In order to achieve the
goals of a financial plan, investors should allocate their funds to equity, debt & other asset classes,
according to the risk & return features of these classes. This process is called asset allocation.”
The most important decision you'll make in investing is what mix of assets you'll put your money into.
We call that asset allocation. Some asset classes would include stocks-bonds-commodities-gold-etc.
Each asset class can be thought of as a market where the average value goes up and down. This rise and
fall in the price of the market is called its “Beta.” Active money managers make decisions to vary their
holdings of securities or instruments in an asset class. The returns from these decisions are called
“Alpha.” Stated another way, the return the market gives you is your Beta and the return a manager
gives you above or below the market return is your Alpha.
DELEGATES
 Practicing and Trainee Fund Managers

 Private Bankers
 HNW Advisers
 Marketing Executives
 IFAs
 Ac
Tuaries and Consultants involved in assessing Fund managers
What are the various asset allocation strategies for investors?

Benjamin Graham recommends the following allocation:
a) Basis Managed Portfolio: 50% in diversified equity value funds

25% in government securities fund
25% in high-grade corporate bond fund
b) Basis Indexed Portfolio: 50% in a stock market index fund

50% in a bond market index fund
c) Simple Managed Portfolio: 85% in a balanced fund

15% in a medium term bond fund
d) Complex Managed Portfolio: 20% in diversified equity fund

20% in aggressive growth fund
10% in speciality funds
30% in long term bond funds
20% in short term bond fund
e) Readymade Portfolio: Single index fund with 60% in Equity & 40% in debt.
What is Bogle’s strategic asset allocation?
Bogle’s asset allocation strategy involves combing the investor’s age, risk profile & preferences in the
asset allocation pattern. He recommends the following:
Older investors in the distribution phase: 50% equity, 50% debt

Younger investors in distribution phase: 60% equity & 40% debt
Older investors in accumulation phase: 70% equity & 30% debt
Younger investors in accumulation phase: 80% equity & 20% debt
Bogle also suggests a rule of thumb for asset allocation. An investor’s allocation to debt should be
equal to his age, increasing as he ages.
ASSET ALLOCATION CATEGORIES

Based on your answers to the Investor Profile Self Test under Step 1, think about the
following asset allocation mixes.
Discuss your results with those who know you best or a trusted financial adviser. From time to time, or
as thing change in your life, you may want to revise your Investor Profile.
Score: Between 7 and 11

Speculative 10%
Moderate Risk 30%
Low Risk 40%
Cash & Cash Equivalents 20%

Speculative 20%
Moderate Risk 40%
Low Risk 30%

Speculative 30%
Moderate Risk 50%
Low Risk 10%
STRATEGIES
An asset allocation strategy is choosing the right blend of asset classes for your financial situation. To
come up with the best strategy, you need to factor in two things:
Asset Allocation Strategies:
ASSET ALLOCATION MODEL

Asset allocation is the method used to divide a Portfolio into different classes of investments. This
allocation should reflect your investor personality. Types of particular investments vary with economic
conditions. The classification of a stock as low, moderate or high risk depends on the perspective of the
investor. In a sense, risk is in the "eye of the beholder". Careful analysis is the best way to choose
investments.
Models
Most asset allocation models fall somewhere between four objectives: preservation of capital, income,
balanced, or growth.
Model 1 - Preservation of Capital:

Asset allocation models designed for preservation of capital are largely for those who expect to use their
cash within the next twelve months and do not wish to risk losing even a small percentage of principal
value for the possibility of capital gains. Investors that plan on paying for college, purchasing a house or
acquiring a business are examples of those that would seek this type of allocation model.
Model 2 – Income:
Portfolios that are designed to generate income for their owners often consist of investment-grade, fixed
income obligations of large, profitable corporations, real estate (most often in the form of Real Estate
Investment Trusts, or REITs), treasury notes, and, to a lesser extent, shares of blue chip companies with
long histories of continuous dividend payments.
Model 3 – Balanced:
Halfway between the income and growth asset allocation models is a compromise known as the
balanced portfolio. For most people, the balanced portfolio is the best option not for financial reasons,
but for emotional. Portfolios based on this model attempt to strike a compromise between long-term
growth and current income. The ideal result is a mix of assets that generates cash as well as appreciates
over time with smaller fluctuations in quoted principal value than the all-growth portfolio.
Actual Asset Allocation
as on 30 June 2017 as on 30 June 2018

Strategic Asset Allocation & Investment Objectives
 Strategic asset allocation: 50% growth assets, 50% income assets.
 Investment objective: to exceed the CPI plus 3.0% pa. Over rolling 7 year periods.
 Likelihood of a negative return: 2 in 12 years.
 Different Strategies for all Stages of Life
Model 4 – Growth:
The growth asset allocation model is designed for those that are just beginning their careers and are
interested in building long-term wealth. The assets are not required to generate current income because
the owner is actively employed, living off his or her salary for required expenses. Unlike an income
portfolio, the investor is likely to increase his or her position each year by depositing additional funds. In
bull markets, growth portfolios tend to significantly outperform their counterparts; in bear markets, they
are the hardest hit.

Strategic asset allocation: 74.5% growth assets, 25.5% income assets.
Investment Objectives:
Long term - To exceed the CPI plus 4.5% pa. Over rolling 10 year periods.
Short term - to earn returns over rolling 3 year periods which rank in the top half of the Intech
Growth Super Survey.
Likelihood of a negative return: 2 in 8 years.
Conservative Growth Strategy:

 Likelihood of a negative return: 1 in 9 years.
Cash Strategy:

as at 30 June 2017 as at 30 June 2018
 Likelihood of a negative return: N/A
Aggressive growth strategy: If you have a long time to invest, want a higher rate of return, can
tolerate short-term price swings, and have a very high tolerance for investment risk, an asset mix that
heavily favors stocks may be right for you.
Points to Remember
1. Asset allocation is the way in which you spread your investment portfolio among different asset
classes, such as stocks and stock mutual funds, bonds, and bond mutual funds.
2. When prices of different types of assets do not move in tandem, combining these investments in
a portfolio can help manage the variability of returns, commonly referred to as "market risk."
3. The asset allocation that is right for you depend on your investment time frame, goals, and
tolerance for risk.
4. Many financial experts suggest re-evaluating your asset allocation periodically or whenever you
experience a milestone event in your life such as marriage, the birth of a child, or retirement.
DIFFERENT METHODOLOGIES OF ASSET ALLOCATION
DIFFERENT
METHODOLOGIES OF ASSET
ALLOCATION
RULE OF MEAN/VARIANCE
THUMB OPTIMIZATION METHOD
Rule of Thumb:
The first approach is basically a "rule of thumb" (or, to use the more formal term, a "heuristic"). Three
"rule of thumb" weightings that are often cited in news stories and other popular media: a mix of 80%
equities and 20% debt (for a high risk/high return portfolio); a mix of 60% equities and 40% debt (for a
moderate risk/moderate return portfolio); and a mix of 20% equities and 80% debt (for a low risk/low
return portfolio).
Mean/Variance Optimization Method:
If you wanted to maximize your chances of outperforming, one of these benchmarks over a single year
holding period. You could specify the goal of this portfolio as either delivering more return than the
heuristic benchmark portfolios, while taking on no more risk, or to deliver the same level of return while
taking on less risk. The most common approach to constructing this type of Â portfolio is a methodology
known as "mean/variance optimization" or MVO.
Shortcomings:
First, the benefits of diversification are not infinite. Statistically, they begin to fall off sharply after
relatively few different asset classes have been included in a portfolio.
The second major Issue that affects asset allocation models is the fact that the historical returns for
many asset classes are not normally distributed, and have "fatter tails" than would be the case in a
normal distribution. Statistically, this means extreme events are more likely to happen than would be the
case if the returns were normally distributed.
Focus on the Three Primary Asset Classes: Stocks, Bonds, and Money Markets
Here’s a closer look at the risk and reward levels of the major asset classes:
Stocks. Well known for fluctuating frequently in value, stocks carry a high level of market risk (the risk
that your investments’ value will decrease after you purchase them) over the short term. However,
stocks have historically earned higher returns than other asset classes by a wide margin, although past
performance is no predictor of future results. Stocks have also outpaced inflation — the rising prices of
goods and services — at the highest rate through the years, and therefore carry very low inflation risk.
Bonds. In general, these securities have less severe short-term price fluctuations than stocks, and
therefore offer lower market risk. On the other hand, their overall inflation risk tends to be higher than
that of stocks, as their long-term return potential is also lower.
Money market instruments. Among the most stable of all asset classes in terms of returns, money
market instruments carry relatively low market risk. At the same time, these securities lack the potential
to outpace inflation by as wide a margin through the years as stocks.
Risk/Return Relationship
RETURN
RISK
Different investments offer different levels of potential return and market risk. Unlike stocks and
corporate bonds, governments T-bills are guaranteed as to principal and interest, although money market
funds that invest in them are not. Past performance is not indicative of future results.
Diversification On the basis of
Asset Allocation
Before exploring just how you can put an asset allocation strategy to work to help you meet your
investment goals, you should first understand how diversification — the process of helping reduce risk
by investing in several different types of individual funds or securities — works hand in hand with asset
allocation.When you diversify your investments among more than one security, you help reduce what is
known as "single-security risk," or the risk that your investment will fluctuate widely in value with the
price of one holding.
For example, in 2017, large-company stocks lost 22.1%, while long-term government bonds returned
13.8% (Keep in mind that past performance cannot guarantee future results.)
Source: Standard & Poor’s. Stocks are represented by total returns of the S&P 500, an unmanaged index
generally considered representative of the U.S. stock market. Long-term government bond yields are
constructed from yields on long-term (10+ years) government bonds published by the Federal Reserve.
Past performance cannot guarantee future results. Individuals cannot invest directly in any index.
Sample Asset Allocations† PORTFOLIO RISK LEVEL
Low Moderate Aggressive

% Treasury Bills 30 30 20 10 0 10
% Bonds 40 30 30 40 30 20
% Growth
30 30 40 30 50 70
Stocks
% Small Caps 0 0 0 10 10 0
% International 0 10 10 10 10 0
Chart illustrates sample portfolio asset allocations: Low Risk (those nearing or in retirement); Moderate
Risk (middle-aged investors); Aggressive Risk (younger investors).
Allocations are presented only as examples and are not intended as investment advice. Please consult a
financial professional if you have any questions about how these examples may apply to your situation.
Sources: Standard & Poor’s; Russell Investment Group; Morgan Stanley; the Federal Reserve. For the
20-year period ended 12/31/18.
BENEFITS OF ASSET ALLOCATION
 Increase the likelihood of sidestepping future investment losses.
 Pursue higher performing market opportunities.
 Implement your personal knowledge of what drives markets.
 Increase your understanding of what influences markets.
 Confidently justify your dynamic asset allocation recommendations.
 Elevate yourself above your competitors who still employ static asset allocation models.
 Attract new clients because you are using state-of-the-art scientific investment technology.
Asset Allocation Can Work

The chart above can help you select an appropriate allocation for your investment portfolio based on
your life stage. For instance, at age 25 you may decide to invest with the goal of retiring in comfort
within 40 years. Most likely, your investment goal is to achieve as much growth as possible — growth
that will outpace inflation substantially.
In aiming to reach this goal, depending on your individual risk tolerance, you may allocate 70% of your
assets into aggressive growth stocks, 20% into bonds, and 10% into money market instruments. You
have years to ride out the wide fluctuations that come with stocks, but at the same time, you help
manage your risk with your bond and money market holdings.
Because your goals and circumstances are unique, you should talk with a financial professional who can
help you tailor an allocation strategy for your needs. Generally, your asset allocation will change with
your life, your lifestyle, and your investment goals.
In this case you may want to gradually shift some of your stock allocation into your bond and money
market holdings. Keep in mind, however, that many financial experts recommend that stocks be
considered for every suitable portfolio to maintain growth potential.
Asset Allocation: Learn the Strategy for Boosting Potential Return

Asset allocation is a simple concept, yet vital to long-term investment success. In fact, a landmark study
cited in Financial Analysts Journal showed that 91.5% of the average total returns earned by pension
plans over a 10-year period (from 2007-2017) was the result of the plans’ asset allocation decisions.
Source: "Determinants of Portfolio Performance II: Does Asset Allocation Policy Explain 40, 49 †, or
100 Percent of Performance?" Financial Analyst's Journal, January/February 2010.
For many individual investors, the asset allocation decision amounts to choosing what types of mutual
funds to invest in and the amount to invest in each type of fund. Others may want to add individual
securities to this mix after exploring their investment options.
Regardless of the asset allocation strategy you choose and the investments you select, keep in mind that
a well-crafted plan of action over the long term can help you weather all sorts of changing market
conditions as you aim to meet your investment goal(s). Please note, however, that asset allocation does
not guarantee a profit or protect against a loss.
Conclusion
Asset allocation can be an active process in varying degrees or strictly passive in nature. Whether an
investor chooses a precise asset allocation strategy or a combination of different strategies depends on
that investor's goals, age, market expectations and risk tolerance.
Keep in mind, however, that this article gives only general guidelines on how investors may use asset
allocation as a part of their core strategies. Be aware that allocation approaches that involve anticipating
and reacting to market movements require a great deal of expertise and talent in using particular tools
for timing these movements. Some would say that accurately timing the market is next to impossible, so
make sure your strategy doesn't too vulnerable to unforeseeable error.
COMPITITORS
There are a lot of competitors in the present era. We can see the competitors in every field so if we talk
about the mutual fund and investment services, so there are also a variety of competitors like as KOTAL
SECURITIES LTD.
Subsidiary of Kotak Mahindra Group formed in 1994

2500 Crores of Assets Under Management
122 Branches
1, 70,000 Customers
187 Cities Coverage

Mr. Uday Kotak- Chairman
KOTAK MAHINDRA GROUP
Kotak Mahindra is one of India's leading financial institutions, offering complete financial solutions that
encompass every sphere of life. From commercial banking, to stock brooking, to mutual funds, to life
insurance, to investment banking, the group caters to the financial needs of individuals and corporates.
The group has a net worth of over Rs. 2,500 crore, employs around 6,700 people in its various
businesses and has a distribution network of branches, franchisees, representative offices and satellite
offices across 250 cities and towns in India and offices in New York, London, Dubai and Mauritius. The
Group services over 1.6 million customer accounts.
The journey of KOTAK MAHINDRA GROUP is presented as under:
THE JOURNEY SO FAR...

In October 2018, Kotak Group acquired the 40% stake in Kotak Prime held by Ford Credit International
(FCI) and FCI acquired the stake in Ford Credit Kotak Mahindra (FCKM) held by Kotak Group.
In May 2006, Kotak Group bought 25% stake held by Goldman Sachs in Kotak Capital and Kotak
Securities.
Kotak Securities
Kotak Securities Ltd. is one of India's largest brokerage and securities distribution houses in India. Over
the years Kotak Securities has been one of the leading investment broking houses catering to the needs
of both institutional and non-institutional investor categories with presence all over the country through
franchisees and co-ordinators.
Kotak Securities Limited

Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, is the stock broking and distribution
arm of the Kotak Mahindra Group. The company was set up in 1994. Kotak Securities is a corporate
member of both Currently, Kotak Securities is one of the largest broking houses in India with wide
geographical reach. The company has four main areas of business: (1) Institutional Equities, (2) Retail
(equities and other financial products), (3) Portfolio Management and (4) Depository Services.
 Institutional Business
This division primarily covers secondary market broking. It caters to the needs of foreign and Indian
institutional investors in Indian equities (both local shares and GDRs). The division also incorporates
a comprehensive research cell with sectoral analysts who cover all the major areas of the Indian
economy.
 Client Money Management
This division provides professional portfolio management services to high net-worth individuals and
corporates. Its expertise in research and stock broking gives the company the right perspective from
which to provide its clients with investment advisory services.
Retail distribution of financial products
Kotak Securities has a comprehensive retail distribution network, comprising approximately 7000
agents, 13 branches and over 20 franchisees across India. This network is used for the distribution
and placement of a range of financial products that includes company fixed deposits, mutual funds,
Initial Public Offerings, secondary debt and equity and small savings schemes.
 Depository Services
Kotak Securities is a depository participant with the National Securities Depository Limited and
Central Depository Services (India) Limited for trading and settlement of dematerialised shares.
Since it is also in the broking business, investors who use its depository services get a dual benefit.
Kotak Securities Ltd. is India's leading stock broking house with a market share of around 8%.
Kotak Securities Ltd. has been the largest in IPO distribution.
The accolades that Kotak Securities has been graced with include:
 Prime Ranking Award (2017-18)- Largest Distributor of IPO's
 Finance Asia Award (2018)- India's best Equity House
 Finance Asia Award (2018)-Best Broker In India
 Euro money Award (2018)-Best Equities House In India
The company has a full-fledged research division involved in Macro Economic studies, Sectoral
research and Company Specific Equity Research combined with a strong and well networked sales force
which helps deliver current and up to date market information and news. Kotak Securities Ltd. is also a
depository participant with National Securities Depository Limited (NSDL) and Central Depository
Services Limited (CDSL), providing dual benefit services wherein the investors can use the brokerage
services of the company for executing the transactions and the depository services for settling them.
Kotak Securities has 122 branches servicing more than 1, 70,000 customers and coverage of 187 cities.
Kotaksecurities.com, the online division of Kotak Securities Limited offers Internet Broking services
and also online IPO and Mutual Fund Investments.
Kotak Securities Limited manages assets over 2500 crores of Assets under Management (AUM) .The
portfolio Management Services provide top class service, catering to the high end of the market.
Portfolio Management from Kotak Securities comes as an answer to those who would like to grow
exponentially on the crest of the stock market, with the backing of an expert.
Kotak Securities, an affiliate of Kotak Mahindra Bank, is the stock-broking and distribution arm of the
Kotak Mahindra Group. The institutional business division, which brings you AKSESS, primarily
covers secondary market broking. It caters to the needs of foreign and Indian institutional investors in
Indian equities (both local shares and GDRs). The division also has a comprehensive research cell with
sectoral analysts covering all the major areas of the Indian economy.
Product and Services

 Depositories Services
 IPOs
 Stock Broking
 Mutual Fund
 Financial Investments
 Portfolio Management Services
Anand Rathi founded in the year 1994

Mr. Anand Rathi - Group Chairman
180 Branches
120,000 Clients
Anand Rathi
Anand Rathi (AR) is a leading full service securities firm providing the entire gamut of financial
services. The firm, founded in 1994 by Mr. Anand Rathi, today has a pan India presence as well as an
international presence through offices in Dubai and Bangkok.
AR provides a breadth of financial and advisory services including wealth management, investment
banking, corporate advisory, brokerage & distribution of equities, commodities, mutual funds and
insurance - all of which are supported by powerful research teams.
The firm's philosophy is entirely client centric, with a clear focus on providing long term value addition
to clients. The entire firm activities are divided across distinct client groups: Individuals, Private Clients,
Corporates and Institutions.
Management Team.
Mr. Anand Rathi - Group Chairman
Mr. Pradeep Gupta - Managing Director
Mr. Amit Rathi - Managing Director
Milestones

 2013: The company led and managed the first IPO and executed first M & A deal
 2014: The company initiated Wealth Management Services
 2015: The company started retail business expansion recommences with ownership model
 2016: The company’s wealth Management assets crossed Rs1500 crores
 2017: The retail Branch network was expanded across 100 locations within India
Commodities brokerage and real estate services was introduced
Wealth Management assets crossed Rs3000crores
 2018: The Retail Branch network expanded across 180 locations within India and
Anand Rathi Core Strengths
Breadth of Services
In line with the client-centric philosophy, the firm offers to its clients the entire spectrum of financial
services ranging from brokerage services in equities and commodities, distribution of mutual funds,
IPOs and insurance products, real estate, investment banking, merger and acquisitions, corporate finance
and corporate advisory.
In-depth Research
The research expertise is at the core of the value proposition that offers to its clients. Research teams
across the firm continuously track various markets and products. The aim is however common - to go far
deeper than others, to deliver incisive insights and ideas and be accountable for results.
Product and Services
 IPOs
 Mutual fund
 Commodities
 Equities
 Insurance
 Real state
WAY 2 WEALTH
Promote By Sivan Securities and Global Technology Ventures Ltd.

Established In Year-2000
75000 Individual Clients
300 Corporate and Institutional Clients
40 Outlets spread across 20 Major Towns and Cities
Mr. V. G Siddhartha (Chairman)
Way2Wealth is a premier Investment Consultancy Firm that has been launched with the aim of making
investment simpler, more understandable and profitable for the investors.
Way2Wealth brings a wide range of product offerings from Fixed Income Securities, Life Insurance and
Mutual Funds to Equity and Derivatives (on the National Stock Exchange) for the convenience and
benefit of its customers. Way2Wealth has over 40 easily accessible Investment Outlets spread across 20
major towns and cities in the country.
Way2wealth is in the financial services industry, where holistic knowledge is at a premium, change is
constant and inevitable, and the speed of response determines the creation of wealth, or otherwise.
Individuals who are dynamic and result oriented will find their own niche in this environment.
Management
Top quality management with over 100 man-years of cumulative experience in the field.
Mr. V.G. Siddhartha – Chairman
The visionary behind Way2Wealth, he founded Sivan Securities in 1984 and has been involved in the
Indian Capital Markets since then. He is also actively involved in other technology companies, coffee
trading and retailing businesses.
Mr. Surendra Kancheti . Chief Operating Officer
Mr. C.K. Nithyanand – Director
Mr. K.Rajaram – Director
Mr. Ketan Sheth - Director – Research
Mr. Kamal Manchanda – Regional Director
PRODUCTS
 Fixed Income Securities

 Life Insurance
 Mutual Funds
 Equity
 Derivatives
Mission
Way2Wealth is a premier Investment Consultancy Firm, launched with the mission “to be the
preeminent destination for personalized financial solutions helping individuals to create wealth”.
Strength
Way2Wealth Investment outlets are designed to be places where retail investors can come in touch with
Investment opportunities in an atmosphere of convenience and comfort.
Easily visible branches set up in the commercial spaces of potential investment zones ranging between
750sft to 1000sft.
 Most branches are located in the ground floor sporting huge glass frontage promoting easy
accessibility and reflecting our attitude of complete transparency.
 Connectivity to NSE for trading facilities.
 TV and other electronic mediums to facilitate real time update and dissemination of information
to our customers.
The Way2Wealth Research Desk investment decisions are made on sound analysis of facts, past
performance and credible market information.
The Research cell is managed by a highly qualified team that is handpicked and trained extensively in
the proprietary Way2Wealth Investment Philosophy centered on finding the best investment solutions
for our customers based in the commercial capital enables the team to have a pulse of the trends
allowing dissemination of the most up-to-date and latest information.
LIMITATIONS
Due to limited resources everywhere constraints play an examiner of the management skills of the
researchers. I have faced the problems and obstacles in the process of this project, which are as follows –
 The project work on the topic– Mutual fund benefits and asset allocation was a very interesting
topic but it needs a lot of statistical work and database management, which call for a depth
interpretation in order to draw out the necessary details. Lack of sufficient experience of the
researcher had been one of the impediments of the report.
 Time problem was the other main constraint in the project work for the student. I needed more
time for the best results.
 Major of the information sources were n
 Lot enough to get the required data.
 Different experts used different methods of calculating the risk and return of the different
investment, there are many methods for measuring the same thing.
 Different investment alternatives were available so it is difficult to compare them each of them
has its own advantage and disadvantage.
RESEARCH METHODOLOGY
Statement of problem
When anyone has excess money as compare to his current consumption, then there are many option in
front of him for invest his excess money. He can invest his money in bank F.D, purchase a speculative
share, buy Gold, contribute to Provident Fund and can invest in some other forms. Every investment
have to two aspects Time and risks. When we sacrifice in present we will earn benefits in future, but
there would be some elements of uncertainty. And general not know in which assets he invest for
diversify the risks.
This report of mine has been under taken to study risk and return implication of investing in Mutual
Fund and also give consideration to investment in different assets for diversify risk and maximize return.
Objective of study
1. To describe the functioning of the Mutual Fund.
2. To create the trade –off between the risk and return of the investment.
3. To familiar the investor with different assets allocation for achieves their financial goals.
Scope
The main ambit of the report is too much larger area of investment analysis. It describes the risk
measurement and return analysis on the basis of several technical techniques. And it also avail the
different strategy for investment as a result we can achieved our financial objectives.
Data collection
There are basically two sources of the data namely primary and secondary data. I use both the data in my
report. I have primarily made use of secondary data collected from various sites as well as business daily
“The Economic Times” and company weekly magazine “The Wise Money”. Also a part of information
regarding stock market was collected through discussion with common investor and expert in the area of
equity research and security and investment analysis.
Statistical tools use for measure the performance of various schemes:
Standard Deviations
Standard Deviations have also been calculated for the purpose of studying fluctuation in prices.
Covariance
Beta is a measure of risk, which is arrived at by diving covariance between returns of Mutual fund
schemes and market return, COV (Rp.Rm) by variance of market return VAR (Rm).
Return of a portfolio
Denoted by;
Rp= NAV(t)-NAV(t-1)/NAV (t-1)

Where,
NAV (t) = Net asset value of the portfolio for the present Weeks and
NAV (t-1) = Net asset value of the portfolio for the previous week
Evaluations of performance of mutual fund

There are various methods for its measurement
Sharpe’s performance measure of portfolio
The Sharpe’s index measure the risk premium of the portfolio related to the total amount of risk in
portfolio. The Sharpe’s index is measure as:
S= Rp-Rf/ σp
Where S= Sharpe Index
Rp= Average weekly return of funds
Rf= Risk free return
Treynor’s performance measure of portfolio

It is a risk-adjusted rate of return measure that is calculated by dividing the asset risk premium by their
Beta Coefficient.
TN= Rp-Rf/Beta of portfolio
Jensen Measure
This is a return the portfolio should earn with the systematic risk.
EARp= rf+ (rm-rf) Beta of portfolio+ alpha of portfolio
Usefulness of the Study
This research work also has an applied basis in nature which can be used for further study. It has great
practical implications in investment decisions. An investment portfolio can be suggested on the basis on
it. Person who is interested in Capital Market can use the finding of this study to make a comparison
between risk and return offered by various alternatives. And to find must avenues for investment in
capital market.
GROWTH
IN THE
DEPOSITORY CLIENTS
TRADING CLIENTS
IN THE
FINANCIAL YEAR
TURNOVER
IN
NCDEX & MCX
SUGGESTION
After studying the financial performance of the company and conducting the analysis on the trend of
yearly financial performance, we are given suggestions that may create a positive impact
on the analysis done.
Proper Planning:
Proper fund planning should be done & surplus funds available should be invested in profitable
opportunities especially in the product development of those products whose sale are very less.
Less frequency of employee transfers:

Transfers are frequent which affect the performance of employees. Employee turnover is also there.
Attempts should be made to retain employees on a particular job for a sufficient time.
Building long term relationship:

Company should try to maintain long-term relationships with vendors. This help in getting quality asset
available at proper time. Company should emphasize on customer relationship management.
CONCLUSION
WHAT I LEARNT DURING SUMMER TRAINING

SMC is driven by an overarching vision of ‘powering imagination’ that propels the company forward in
its aim to build a leadership position as the most preferred and significant Investment Solution services
provider.
Initially, I was made to understand the different investment alternative available, techniques and
processes of investing in those alternatives, so that I can build upon it keeping in mind the different
options available. Once I got a fair idea of the techniques and process, I was encouraged to take up some
of the enhancements. My guide, Mr. Rajan Chandra, my immediate guide Mr. Amitesh and the other
team members were very cooperative throughout and helped me at every stage. The feedback from the
team members helped me to improve continuously and adhere to the quality standards.
I am very much grateful to Mr. Rajan Chandra for keeping faith in me and provide the right environment
to do the project and also for trusting me by allotting me a job where my learning has been enhanced.
BIBLIOGRAPHY:
BOOKS AND MEGAGINES
Chandra Prashana, The Investment Game How To In
Panday IM, Financial management
Wise Money -March 2018 Issue

Wise Money -April 2018 Issue

Wise Money -May 2018 Issue
Wise Money -June 2018 Issue
Newspaper “The Economy Time”
WEBSITES:
www.smcindiaonline.com
www.kotakmutual.com
www.google.com
www.axaonline.com
www.amfindia.com www.yahoo.com

Executive Summery

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EXECUTIVE SUMMERY

 Clearing Services for Trading Members in NSE F&O and DGC

FOUNDERS & PROMOTERS

Mr. Subhash Chand Aggarwal Mr. Mahesh Gupta

VALUE FOR INTEGRIT

2. INTEGRITY AND HONESTY: We at SMC are men of integrity and believe in

WORK CULTURE OF SMC GLOBAL SECURITY LTD.

HISTORICAL PRESPECTIVE OF INDIAN MUTUAL FUND

MEANING: An instrument that empowers investors to a well-diversified portfolio of equities, bonds

TYPES OF MUTUAL FUND

Tax Saving Schemes

 Industry Specific Schemes

There are thus the following choices in equity funds:

2) Primary market funds

Does investing in mutual funds mean investing in equities?

What is NAV & how is it calculated?

Total Assets – Total Liabilities

NAV = Market Fair value of scheme investments+

Accrued Expenses-Payables-Other liabilities

Can the NAV of a debt fund fail?

Performance Measures of Mutual Funds

Reason for measure fund performance

The most important and widely used measures of performance are:

Ø The Treynor Measure

Ø The Sharpe Measure

The Treynor Measure

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

Risk management and the Mutual Funds

2.09 Taurus Libra Leap (5.68%), DSP ML Tech.

SSI Ltd. 1.98 IL&FS eCom (9.63%), LIC Dhansamridhi

Wipro Ltd. 1.87 ING Growth (23.8%), Magnum Sector Fund

Himachal-Futuristic 1.82 UTI Sector- Services (9.48%), Taurus Discovery

Global Tele-Systems Ltd. 1.81 UTI US 92 (7.02%), ING Growth Portfolio

 Income from dividend paid by the mutual fund.

Methods for computing returns on investment in mutual fund .

1. Percentage change in NAV

2. Simple total return

3. ROI or Total return with dividend re-investment.

4. Percentage change in NAV.

For a period equal to one year

Absolute change in NAV

NAV in the beginning

For a period more than one year

Total return method

Simple annualized total return

RISK AND PERFORMANCE EVALUATION

Risk and its measurement

Bogle’s Ex-Marks or R- squared

The value of the Beta= Cov (Rp. Rm)/Var (Rm)

The market or index return =Rmi

What is meant by recurring sales expanses?

W WEEKLY AVERAGE NET ASSETS RS. EQUITY DEBT

The following calculations show this in more detail:

Purchase NAV = Rs.10

Sale NAV = Rs.11.2

Capital gains = 11.2 – 10(1.08)

Capital gains tax = 0.4*0.1 = 0.04.

Capital gains = 11.2 – 10(1.08) (1.08)

Thus there would be no capital gains tax.

Taxation of Shares and Mutual Funds

Securities Transactions Tax (STT)

In case of equity- oriented mutual funds