GENERAL PROJECT REPORT

ON

“A Study Of Business Strategy Of Kotak Asset Management

Company To Sell Mutual Fund”
Submitted to
UNIVERSITY OF MUMBAI

SUBMITTED BY- PROJECT GUIDE-

Khan md yasir PROF. Ritu Chakraborty

Finance- Roll No- F 117

2017-2019

SHEILA RAHEJA SCHOOL OF BUSINESS MANAGEMENT & RESEARCH

1
 Table of Contents
Sr No. Topics Page No.
1.
Prefatory Items

i. Declaration
ii. Acknowledgement
iii. Letter of Transmittal
iv. Title Page
v. Letter of Authorization
vi. Certificate
vii. Table of Content :

A. Index of tables
B. Index of charts
viii. Executive Summary
2.
Introduction

i. Problem Statement
ii. Research Objective
iii. Research hypothesis
iv. Research Design
v. Literature Review
3.
Methodology

i. Data collection
ii. Data Analysis
iii. Hypothesis Testing

2
iv. Limitations
4.
Conclusion

i. Findings
ii. Suggestions
5.
Appendices

i. Bibliography

3
 DECLARATION

I, Khan md yasir, a student of Sheila Raheja School of Business Management & Research,
Bandra (East) hereby declare that this project is done and submitted in partial fulfillment of the
requirements for the degree of Masters Of Management Studies (MMS) by Mumbai
University.

I hereby declare that this project report titled ―A study of business strategy of kotak asset
management company to sell mutual fund.” is my original piece of research work and not
copied from elsewhere nor submitted before any degree, diploma or course to any institute or
university. The research work is carried out by me under the guidance and supervision of.Prof.
Ritu Chakraborty The information incorporated in this project is true and original to the
best of my knowledge.

Place: Mumbai ________________

Date: -- Khan md yasir

4
 ACKNOWLEDGEMENT

I take this opportunity to specially gratify Dr. Vijay Wagh, director, Sheila Raheja School of
Business Management & Research, for permitting me to undertake this study and also
Placement Head, Prof. Vivek Sharma, for his exemplary guidance, monitoring and constant
encouragement throughout the course of this internship project.

I am deeply indebted to my guide Prof. Ritu Chakraborty for not only his valuable and
enlightened, guidance but also for the freedom he rendered me during this project work.

Faculty Members, who have extended their kind help, guidance and suggestion without which it
could not have been possible for me to complete this project report.

Khan md yasir
Roll No: F 117
Specialization- Finance
SRBS, Mumbai.

5
 TITLE

A study of business strategy of kotak asset management company to sell mutual fund

6
 LETTER OF AUTHORIZATION

Director,

Sheila Raheja School of Business Management.

Dear Students,

After reviewing the proposed study,“A study of business strategy of kotak asset management
company to sell mutual fund‖, presented by the students of Sheila Raheja School of Business
Management, I have granted permission for the study to be conducted at the name of the
institute.

The purpose of study is to conduct the research on ,“A study of business strategy of kotak asset
management company to sell mutual fund‖. The primary activity will be to study and find out
the To understand that current study is undertaken.

The students have prepared the project step by step according to the topic taught after every
lecture under my guidance.

Sincerely,

Director,

Sheila Raheja School of Business Management, Bandra.

7
 TABLE OF CONTENT

A) Index of table

1. KOTAK STANDARD MULTICAP FUND: 37

2. KOTAK EQUITY OPPORTUNITIES FUND: 38

3. KOTAK SMALL CAP FUND: 39

4. KOTAK EMERGING EQUITY: 40

5. KOTAK MEDIUM TERM FUND: 41

6. KOTAK CREDIT RISK FUND: 42

8
 B) Index of Graphs

1. The growth of assets over the years 43

2. Mutual Fund SIPs Over Bear Phases Work Best 59
3. Even Flat and Volatile Market Phases are a Good Time for SIP 60
4. Starting a SIP in A Market Rally May Disappoint 61
5. The Key for SIPs to Outperform Lumpsum Is To Lower the Average 62
Cost of Investment

9
 PROBLEM STATEMENT

Mutual fund strategies help investors to diversify portfolio, so to understand that current study is
undertaken

10
 RESEARCH OBJECTIVES

1. To study mutual fund.

2. To study business strategy of mutual fund.

11
 RESEARCH HYPOTHESIS

SET 1:-

H0: Mutual fund strategies help investors to diversify portfolio.

H1: Mutual fund strategies does not help investors to diversify portfolio.

12
 RESEARCH DESIGN

The research is descriptive in nature.

13
 LITERATURE REVIEW

Literature Review in Tabular form

Sr. Author Title of Objective Tools Findings

no paper
1. Aarthy B, Factors 1) To analyse The research tool Tax benefits, high return,
Aswathy A affecting the factors used here is price and capital
Nair, Anju Sai Investment influencing Questionnaire appreciation are some of the
P, Amrita on Mutual investments and Personal major factors which the
Vishwa Funds and Its decision of Interview investor will look into while
Vidyapeetham Preference of retail investors method. The investing in mutual fund.
Retail in Mutual questionnaire
Investors Funds. consists of both Retail investor gathers
open and close information about the
2) To study the end questions. performance of various
investors mutual unds mainly from
perception and brokers, financial
preference consultants,financial
towards Mutual institutions, internet, TV
funds. channels and
magazines/newspapers
Secondary respectively.
Objective
Tax benefit, return potential,
1)To identify

14
 the factors liquidity, low cost and
which prevent transparency are the major
the investors factors that motivate a retail
from investing investor to invest in mutual
in mutual fund. Economies of scale
funds. are also a motivating factor
to a certain extent.
2)To find out
the motivating The level of satisfaction of
factors which investors regarding mutual
encourages the fund on the basis of risk
investors to exposure is average and that
invest in of overall experience is also
mutual fund average.
industry.

3)To analyse
the
performance of
various mutual
fund schemes
and suggest the
best one.

2. Dr. Ujjwal M. Comparative 1)To evaluate Tools used for 1)On the basis of standard
Mishra Risk Analysis the data analysis are deviation investor will
of Kotak performance of Standard
& Mr. Chetan Select selected Deviation, not prefer this fund because
Borole Covariance, it is more volatile
Focus Fund Mutual Fund Correlation, R-

15
 (G) Mutual Schemes. Squared and than the benchmark.
Fund Scheme Beta
2)To analyse 2)On the basis of co-
the Returns of variance investor will prefer
Selected
Mutual this fund for investment
because covariance is
Fund Schemes.
positive.
3) To study the
risk 3)On the basis of correlation
measurement investor will prefer
tools of Mutual this fund for investment.
Fund. 4)On the basis of R- squared
investor will prefer

this fund for investment.

5)On the basis of Beta

investor will not prefer this

fund for investment because

the Beta of this fund

is greater than 1 , When the

beta is more than 1

then the fund will more

riskier for investment.

3. Dr. Binod Investors’ 1)To study and The study is The association between age

16
Kumar Singh Attitude analyze the basically an and attitude towards the
towards impact of analytical study mutual funds are calculated
Mutual Funds various based on primary using chi-square. About 35
as an demographic research. respondents having age
factors on group (25-35), 28
investment investors’ ’ respondents having age
option attitude group (35-

towards mutual 45) and 8 respondents have

fund. age above 45 have a
positive attitude towards the
2)To study mutual funds.
about the
factors (on the There is a highest positive
basis of rank) attitude towards the mutual
responsible for funds in the age group (25-
the selection of 35) against
mutual
the others.
funds as an
investment 2) The association between
option. income and attitude towards
the mutual funds are
calculated using chi-square.
About 12 respondents have
monthly income upto
15,000, 36 respondents
having

monthly income between

15,000-25,000 and 23

17
 respondents having monthly
income above

25,000 have a positive

attitude towards the mutual
funds. There is a highest
positive attitude

towards the mutual funds

having monthly income
above 25,000 against the
others.

3)The association between

level of education and
attitude towards the

mutual funds shows about 6

respondents having
qualification upto matric,12

respondents having
qualification upto
intermediate,33 respondents
having qualification upto

graduate and 20 respondents

having qualification upto
post-graduate have a
positive attitude

towards the mutual funs.

18
 There is a highest positive
attitude towards the mutual
funds among

the graduate respondents

against the others.

4) The investors’ basically

invested in mutual funds
due to high return potential,
transparency, liquidity,
flexibility and affordability

4 Dr anand A 1. To evaluate Tools used for 1. Different types of mutual

damani Comparative and compare the data is funds have different levels
Study of the questionnaire of volatility or potential
Performance performance of and comparison price, and those
of Top 5 equity between peers.
Mutual Funds diversified with the greater chance of
in India mutual fund losing value are also the
schemes of funds that can produce the
greater returns for
selected
companies you over time.

2. To compare
the 2. The important difference
performance of between the two is that their
equity risk and return curve varies
diversified in a very
mutual fund

19
 schemes of different way over different
selected time-scales. Debt returns are
predictable and there are
companies vis- many
à-vis the
market. government-guaranteed
deposits available to the
3. To study Indian investor.
change in
investment
pattern

5 Debalina Roy The Scenario To study how The research tool 1. Many investors start the
of Investment the investment used here is investment process without
and Koushik in Systematic in mutual funds telecalling and determining the investment
Ghosh Investment through Data Gathering.
Systematic objectives and proper
investment planning.

Plan (SIP) plans (SIP) can 2. Service holders generally

among the gain prefer investments in fixed
Retail momentum and deposits, bonds, post
Customers increase offices whereas the group of
percentage of businessmen or self-
income. To employed individuals is
find more
out what inclined to the equity
percentage of market.
bank customer
invest in 3. Systematic Investment

20
mutual funds Plan (SIP) is the best way to
especially build up capital over a

through period of time for those who

Systematic don’t have a lump sum to
investment plan invest as our present
(SIP) with
specific analysis suggests that the
reference to risk in investment by
HDFC Systematic Investment Plan
is
Bank,
Shyambazar expected to be lower than
Branch, that for lump sum
Kolkata, India. investment.
To compare
risk between
SIP and lump
sum investment
in mutual
funds. To make
a probabilistic
approach of the
risk in
investing
money in
mutual funds.
To make a
SWOT

21
 Analysis in SIP

investments.

6 Dimple Batra A dea To find an The research tool Many of people do not have
comparison individual is used is DEA invested in mutual fund due
of systematic measure of the techniques to lack of
and
efficiency and awareness although they
lump sum the have money to invest. As
investment corresponding the awareness and
in mutual input and output
funds targets for Data income is growing the
Envelopment number of mutual fund
Analysis (DEA) investors are also growing.
Similarly the main purpose
of investment for most of
the respondents is tax

saving and they are

preferring PPF as their
investment option even
though mutual funds offer
ELSS option which is not so
popular, so appropriate
measures should be initiated
to increase the awareness
about the mutual funds to
the investors and the firm
should offer the mutual fund

22
 according to

the need or purpose of the

investor.

7 Dr. Soheli An analysis 1.To Comparative 1.The Indian Mutual Fund

Ghose of the understand the Analysis of Industry, though still in its
different concept of secondary data. early stages is growing at an
types of Systematic astronomical pace.
systematic Investment
plans of Plans. 2.The growth in the number
mutual fund of young market savvy
investments 2. To investors has helped in this
in india understand the development to a large
concept of extent. Though the rural
Systematic areas have not been tapped
Withdrawal completely, there is a huge
Plans scope for market
penetration. With advanced
3. To technology and growing
understand the investor awareness the
concept of mutual fund industry will
Systematic surely continue its great run
Transfer Plans. in years to come.
4. To compare fluctuations.
the above plans 3.SEBI and other
for possible Government regulatory
advantages and agencies have made the
problems in the investment scenario

23
 context of extremely transparent,
competitive
investments.
and investor friendly. Thus
a well regulated financial
market will further help in
consolidating

the investors’ faith in

mutual funds. In the Global
scenario, Indian Mutual
Funds are at a very

nascent stage. lives.

Investors should foray into
this lucrative avenue of
investing and see their
money multiply in no time.

8 Anich uddin Investor 1.To study Sampling People use internet to be

Perception various factors method. aware about the mutual fund
about that affect the so that internet become very
Systematic investment in effective. Out of
Investment systematic
Plan (SIP) the 100 respondent 35%
investment investor has been using
plan. internet for any kinds of
information about the
2.To study the mutual fund where as 27%
purpose of the people use Television, 19%
investment in through the broker, 11%

24
SIP. through the intermediaries,
and remaining only 8%
3.To study the people use news paper.
amount of
investment in .Systematic investment plan
SIP . is fully hassle free
investment. Small number
4.To study the of amount is allowed to
awareness of invest in systematic
investors about investment plan and it is the
the Mutual big opportunity for small
fund SIP. and medium income group
5.To study the category’s investor. 66%
sector investor motivated to invest
in mutual fund SIP
preferences for
SIP. because Mutual funds SIP
gives to the investor a good
number long term return
and its Cost averaging
process.

The selection of debt or

equity plan depends on the
clients age. If the client is
young they prefer debt plan
but as their experience on

investing increases year by

year they start to prefer on

25
 equity plan. It is seen that
investor are more interested
to invest at minimum
amount. Increasing the sip
amount reduces the number
of investor and it is also
seen that male are more
interested then female.

9 Laxman Identifying 1.To study Sampling 1. In the Regression analysis

Prasad and the investor method the Coefficient value of
Dr.S.K.Sharm Consumer`s attitude gender is 0.000 which is
a Investment towards less than 0.05; the gender is
Behaviour investment a major factor which affects
towards option the Customer Attitude
Systematic selection. towards investment option
Investment selection with special
Plan in Bhilai 2. To identify reference to sip.
Region factors
affecting 2. The Coefficient value of
investor marital status is 0.003 which
attitude is less than 0.05; the marital
towards status is a major factor
investment which affects the Customer
option selection Attitude towards investment
with special option selection with special
reference to reference to sip.
sip.

26
10 Rishab Mutual Funds To Understand CRISIL Mutual Looking at the past
Telukunta and the concept of Fund Ranking developments and
Systematic mutual funds Methodology combining it with the
and the
Investment current trends it can be
different types
plans with of the fund. concluded that the future of
their best Along with the Mutual Funds in India has
performing concepts such lot of positive things to offer
funds as NAV, to its investors. The mutual
Rupee-cost fund industry has done well
averaging. in the past and is still doing
great. Rs 20 trillion is
expected to be the mutual
fund industry size by the
end of this year. The basic
rule of mutual fund is
needed to be kept in mind
that we should invest
regularly, Invest for a long
time and start from an early
stage. These 3 rules will
help the investor reap good
return in the future from
what they sow in the past.

27
 RESEARCH METHODOLOGY

Data Collection Method

Secondary Data collection method:

 Newspaper

 Magazines

 Websites

 Social Media Applications

 Online Articles

 Journals

 Kotak asset management company

 Café mutual fund

 AMFI

28
 DATA COLLECTION

Mutual fund

A mutual fund is an investment security that enables investors to pool their money
together into one professionally managed investment. Mutual funds can invest in
stocks, bonds, cash or a combination of those assets. The underlying security types,
called holdings, combine to form one mutual fund, also called a portfolio.

In simpler terms, mutual funds are like baskets. Each basket holds certain types of
stocks, bonds or a blend of stocks and bonds to combine for one mutual fund
portfolio.

For example, an investor who buys a fund called XYZ International Stock is
buying one investment security — the basket — that holds dozens or hundreds of
stocks from all around the globe, hence the "international" moniker.

It's also important to understand that the investor does not actually own the
underlying securities — the holdings — but rather a representation of those
securities; investors own shares of the mutual fund, not shares of the holdings. For
example, if a particular mutual fund includes shares of stock in Apple, Inc.
(AAPL) among other portfolio holdings, the mutual fund investor does not directly
own Apple stock.

Instead, the mutual fund investor owns shares of the mutual fund. However, the
investor can still benefit by the appreciation of shares in AAPL.

29
Since mutual funds can hold hundreds or even thousands of stocks or bonds, they
are described as diversified investments. The concept of diversification is similar
to the idea of strength in numbers. Diversification helps the investor because it can
reduce market risk compared to buying individual securities.

Basic Types of Mutual Funds

There are thousands of mutual funds in the investment universe but they can be
divided into a few basic types and categories of funds. The two primary types of
mutual funds are stock funds and bond funds. From there, the categories of funds
get more specialized and diverse.

For example, stock funds can be further broken into three sub-categories
of capitalization — small-cap, mid-cap, and large-cap. They are then categorized
further as either growth, value, or growth and income. Stocks can also be classified
as international, global or foreign, all of which have similar objectives.

Bond funds are primarily categorized by the duration of the bonds, which are
described as short-term, intermediate-term, or long-term. They are then broken into
sub-categories of corporate bonds, municipal bonds, and U.S. Treasury bonds.

Most mutual fund categories can be purchased as index funds, which can be
described as passively-managed funds. This means that the portfolio manager does
not actively buy and sell securities but rather matches the holdings of a benchmark
index, such as the S&P 500 index or the Dow Jones Industrial Average. Beginners
often start with one of the best S&P 500 Index funds. Index funds often have
hundreds of holdings and offer investors the greatest features of mutual funds —
simplicity, diversity and low-cost.

30
Understanding the Risks of Investing in Mutual Funds

Stocks, bonds, and mutual funds all involve some level of market risk, which is the
possibility of fluctuation in value or even the loss of principal (the amount you
originally invested).

For example, you could invest $1,000 for 10 years and end up with $950. Although
receiving a negative return like this over a 10-year period is extremely rare, it is
possible. It is more reasonable to expect an average of return of somewhere
between 7 and 10 percent for stock investments, including stock mutual funds, for
periods of 10 years or more. However, there are short periods, such as 1 year,
where your stock mutual fund can decline in value by as much as 30 to 40 percent.
Similarly, you could have gains of more than 50% in one year.

So whether you're investing in individual stocks or a stock mutual fund, you need
to have some reasonable expectations about how the stock market behaves. And
more importantly, how you will react in the brief but inevitable extremes? Will you
sell your mutual funds if they lose 10% in 3 months? Before you begin investing,
it's best to get an idea of your risk tolerance.

Mutual fund industry Evolution in India:

The mutual fund industry in India started in 1963 with the formation of Unit Trust
of India, at the initiative of the Government of India and Reserve Bank of India.
The history of mutual funds in India can be broadly divided into four distinct
phases

31
First Phase - 1964-1987

Unit Trust of India (UTI) was established in 1963 by an Act of Parliament. It was
set up by the Reserve Bank of India and functioned under the Regulatory and
administrative control of the Reserve Bank of India. In 1978 UTI was de-linked
from the RBI and the Industrial Development Bank of India (IDBI) took over the
regulatory and administrative control in place of RBI. The first scheme launched
by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs. 6,700 crores of
assets under management.

Second Phase - 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non-UTI, public sector mutual funds set up by public
sector banks and Life Insurance Corporation of India (LIC) and General Insurance
Corporation of India (GIC). SBI Mutual Fund was the first non-UTI Mutual Fund
established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab
National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank
of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its
mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.
At the end of 1993, the mutual fund industry had assets under management of Rs.
47,004 crores.

Third Phase - 1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in the Indian
mutual fund industry, giving the Indian investors a wider choice of fund families.
Also, 1993 was the year in which the first Mutual Fund Regulations came into
being, under which all mutual funds, except UTI were to be registered and
governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton)
was the first private sector mutual fund registered in July 1993.

32
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more
comprehensive and revised Mutual Fund Regulations in 1996. The industry now
functions under the SEBI (Mutual Fund) Regulations 1996.
The number of mutual fund houses went on increasing, with many foreign mutual
funds setting up funds in India and also the industry has witnessed several mergers
and acquisitions. As at the end of January 2003, there were 33 mutual funds with
total assets of Rs. 1,21,80W5 crores. The Unit Trust of India with Rs. 44,541
crores of assets under management was way ahead of other mutual funds.

Fourth Phase - since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI
was bifurcated into two separate entities. One is the Specified Undertaking of the
Unit Trust of India with assets under management of Rs. 29,835 crores as at the
end of January 2003, representing broadly, the assets of US 64 scheme, assured
return and certain other schemes. The Specified Undertaking of Unit Trust of
India, functioning under an administrator and under the rules framed by
Government of India and does not come under the purview of the Mutual Fund
Regulations.
The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. With the
bifurcation of the erstwhile UTI which had in March 2000 more than Rs. 76,000
crores of assets under management and with the setting up of a UTI Mutual Fund,
conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking
place among different private sector funds, the mutual fund industry has entered its
current phase of consolidation and growth.

33
 KOTAK ASSET MANAGEMENT COMPANY
About

Established in 1985, Kotak Mahindra Group is one of India's leading financial services
conglomerates. In February 2003, Kotak Mahindra Finance Ltd. (KMFL), the Group's flagship
company, received banking licence from the Reserve Bank of India (RBI), becoming the first
nonbanking finance company in India to convert into a bank - Kotak Mahindra Bank Ltd.
As on June 30, 2016, Kotak Mahindra Bank Ltd, has a significant national footprint of 1,333
branches spread across 674 locations and 2,034 ATMs, affording it the capacity and means to
serve its customers through its wide presence.
The consolidated net worth of the Group stands at Rs. 34,443 crore (US $ 5.1 billion; 1 US $ =
Rs. 67.62) as on June 30, 2016. The Group offers a wide range of financial services that
encompass every sphere of life. From commercial banking, to stock broking, mutual funds, life
insurance and investment banking, the Group caters to the diverse financial needs of individuals
and the corporate sector. The Group has a wide distribution network through branches and
franchisees across India, an International Business Unit at GIFT city, Gujarat, and international
offices in London, New York, Dubai, Abu Dhabi, Mauritius and Singapore.
Business

Kotak Mahindra Asset Management Company Limited (KMAMC), a wholly owned subsidiary
of Kotak Mahindra bank Limited (KMBL), is the Asset Manager for Kotak Mahindra Mutual
Fund (KMMF). KMAMC started operations in December 1998 and has approximately 7.5 Lac
investors in various schemes. KMMF offers schemes catering to investors with varying risk -
return profiles and was the first fund house in the country to launch a dedicated gilt scheme
investing only in government securities. The company is present in 80 cities and has 84
branches.

Purpose of Business

Our vision is to be a responsible player in the Indian mutual fund space, always striving to offer
best in class products across investor lifecycle. We strive hard to deliver consistent performance
over the benchmark across all our products, thereby creating customer satisfaction. Our 12 years

34
of existence offering a broad range of investment products across asset classes with varying risk
parameters that cater to needs of various customer segments, have enabled us to garner trust of
over 10 lac investors.

UNDERSTANDING PRODUCTS OF KOTAK MUTUAL FUND

KOTAK STANDARD MULTICAP FUND:

Table no: 1

PARTICULARS PRODUCT FEATURES

Fund House Kotak Mahindra Mutual Fund

Scheme Type Open-ended

Investment Objective The scheme aims to generate capital appreciation from a

diversified portfolio of equity and equity related
instruments, generally focused on a few selected sectors.

Class Equity

Category Multi Cap

Plan Type Regular Plan

Inception Date Jul 2009

Scheme Benchmark Nifty 200 Index

Face Value (Rs. / Unit) 10.00

AUM Rs. 19,613 Crs.

Fund Manager Harsha Upadhyaya

Expense Ratio Regular: 1.97%

Direct: 1.00%

35
Minimum Initial Investment Rs. 5,000

KOTAK EQUITY OPPORTUNITIES FUND:

Table no: 2

PARTICULARS PRODUCT FEATURES

Fund House Kotak Mahindra Mutual Fund

Scheme Type Open-ended

Investment Objective The scheme aims to generate capital appreciation from a

diversified portfolio of equity and equity related
instruments, generally focused on a few selected sectors.

Class Equity

Category Large and Midcap

Plan Type Regular Plan

Inception Date Jul 2004

Scheme Benchmark Nifty 200 Index

Face Value (Rs / Unit) 10.00

AUM Rs. 2499.56 Crs.

Fund Manager Harsha Upadhyaya

Expense Ratio Regular: 2.07%

Direct: 0.92%

36
Minimum Initial Investment Rs. 5,000

KOTAK SMALL CAP FUND:

Table no: 3

PARTICULARS PRODUCT FEATURES

Fund House Kotak Mahindra Mutual Fund

Scheme Type Open Ended

Investment Objectives To Generate Capital Appreciation From A Diversified

Portfolio Of Equity And Equity Related Securities. No
Assurance That Objective Of Scheme Will Be Realized.

Class Open Ended

Category Small Cap

Plan Type Regular

Inception Date Feb 24 ,2005

Scheme Benchmark NIFTY Smallcap 50

Face Value (Rs/Unit) 10.00

AUM Rs 834.48 Crs.

Fund manager Mr. Pankaj Tiberwal

Expense ratio Regular: 2.30%

Direct: 1.20%

Minimum Initial Investment Rs. 5000

37
KOTAK EMERGING EQUITY:

Table no: 4

PARTICULARS PRODUCT FEATURES

Fund House Kotak Mahindra Mutual Fund

Scheme Type Open Ended

Investment Objectives To Generate Long Term Capital Appreciation From A

Portfolio Of Equity And Equity Related Securities. No
Assurance That The Objectives Of Scheme Will Be
Realized.

Class Equity

Category Mid Cap

Plan Type Regular

Inception Date Feb 2007

Scheme Benchmark NIFTY Free Float Midcap 100

Face Value( Rs /Unit) 10.00

AUM Rs3251.57 Crs

Fund Manager Mr. Pankaj Tiberwal

Expense Ratio Regular: 2.04%

Direct: 1.09%

Minimum Initial Investment 5000

38
KOTAK MEDIUM TERM FUND:

Table no: 5

PARTICULARS PRODUCT FEATURES

Fund House Kotak Mahindra Mutual Fund

Scheme Type Open-ended

Investment Objective The scheme seeks to generate regular income and capital
appreciation by investing in a portfolio of medium term
debt and money market instruments.

Class Debt

Category Income

Plan Type Regular Plan

Inception Date Jul 2009

Scheme Benchmark NIFTY Medium Duration Index

Face Value (Rs. / Unit) 10.00

AUM Rs. 4733.44 Crs.

Fund Manager Mr. Deepak Agarwal

Expense Ratio Regular: 1.70%

Direct: 0.98%

Minimum Initial Investment Rs. 5,000

39
KOTAK CREDIT RISK FUND:

Table no: 6

PARTICULARS PRODUCT FEATURES

Fund House Kotak Mahindra Mutual Fund

Scheme Type Open Ended

Scheme Objectives The Scheme Aims To Maximize Return Through An

Active Management Of Portfolio Of Debt And Money
Market Securities.

Class Debt

Category Credit Risk

Inception Date April 2010

Scheme Benchmark CRISIL AA Short Term Bond Index

Face Value( Rs /Unit) 10.00

AUM Rs. 5222.08 Crs.

Fund Manager Mr. Deepak Agarwal

Expense Ratio Regular: 1.60%

Direct: 0.90%

Minimum Initial Investment 5000

40
Graph no: 1

(Source: cafe mutual fund)

How does a mutual fund operate?

Image no: 1

41
A mutual fund company collects money from several investors, and invests it in various options
like stocks, bonds, etc. This fund is managed by professionals who understand the market well,
and try to accomplish growth by making strategic investments. Investors get units of the mutual
fund according to the amount they have invested. The Asset Management Company is
responsible for managing the investments for the various schemes operated by the mutual fund.
It also undertakes activities such like advisory services, financial consulting, customer services,
accounting, marketing and sales functions for the schemes of the mutual fund.

What is Net Asset Value?

Net Asset Value (NAV) is the total asset value (net of expenses) per unit of the fund and is
calculated by the AMC at the end of every business day. In order to calculate the NAV of a
mutual fund, you need to take the current market value of the fund's assets minus the liabilities, if
any and divide it by the number of shares outstanding. NAV is calculated as follows:

NAV = (Asset of the fund – Liabilities of the fund ) / Number of outstanding unit of the
fund.

For example, if the market value of securities of a Mutual Fund scheme is

₹ 500 lakh and the Mutual Fund has issued 10 lakh units of ₹ 10 each to investors, then the
NAV per unit of the fund is ₹ 50.d

42
Image no: 2

Advantages of Mutual Funds:

o Diversification
o professional management
o Regulatory oversight
o Liquidity
o convenience
o Low cost
o Transparency
o Flexibility
o Choice of schemes
o Tax benefits
o Well regulated
43
Working of Mutual Funds:
The following figure explains the working of mutual funds:-
Image no: 3

The important terms of the figure are explained as follows:

Fund sponsor:
The sponsor is the company which sets up the mutual fund. It means anybody corporate acting
alone or in combination with another body corporate established a mutual fund after and
completing the formalities.

44
Trust:
Mutual fund can either be managed by the board of trustees, which is a body of individuals, or by
a trust company, which is a corporate body. Most of the funds in India are managed by Board of
trustees. The trustee being the primary guardian of the unit holders, fund n assets has to be a
person of high repute and integrity. The trustee however, does not directly manage the portfolio
securities. The portfolio is managed by the AMC as per the defined objectives, accordance with
trust Deed and SEBI (Mutual fund) Regulations.

(AMC): Asset Management Company:

The AMC, which is appointed by the sponsor or the trustees and approved by SEBI, acts like the
investment manager of the trust. The AMC functions under the supervision of its own Board of
Director, and also under the direction of the trustees and SEBI. AMC, in the name of the trust,
floats and managers the different investment ―schemes‖ as per the SEBI Regulation and as per
the investment management agreement shunned with the trustees.

Custodian:
Apart from these, the mutual fund has some other fund constituents such as custodian is
appointed for safe keeping of securities and participating in the clearing system through
approved depository. The bankers handle the financial dealings of the fund. Transfer agent is
responsible for issue and redemption of units of mutual fund.

Risk Return Matrix:

The risk return trade-off indicated that if investors is willing to take higher risk then
correspondingly he can expect higher returns and vice versa if the pertains to lower risk
instruments, which would be satisfied by lower returns. For example, if an investor's opts for
bank FD, which provide moderate return with minimal risk. But as he moves ahead to invest in
capital protected funds and the profit-bounds that give out more return which is slightly higher as
compared to the bank deposits but the risk involved also increases.

45
Thus investors choose mutual funds as their primary means of investing, as mutual fund provide
professional management, Diversification, convenience and liquidity. That doesn't mean mutual
fund investment are risk free. This is because the money that is pooled in are not invested only in
debts funds which are less riskier but are also invested in the stock markets which involves A
higher risk but can expect higher risk but can expect higher returns.
CATEGORIZATION AND RATIONALIZATION OF MUTUAL FUNDS

Under the recent Categorization and Rationalization of Mutual Fund Scheme initiative of SEBI,
mutual funds schemes are undergoing renaming, modification of investment mandates and
mergers.

Recently, SEBI came up with a regulation on categorization and rationalization of mutual fund
schemes. It is an effort to bring about uniformity in the functioning of Asset Management
Companies (AMCs) and to standardize attributes of mutual fund schemes across specific
categories. Under this regulation, the fund houses need to define their mutual fund schemes
clearly. The product offerings need to look different from each other in terms of core
characteristics like investment objective and asset allocation. This would help a mutual fund
investor to examine a mutual fund scheme properly before finalizing the decision to invest in it.

SEBI has specified 36 categories of mutual fund schemes in total. As per the new rules, the
AMCs will not be allowed to offer two schemes under different names with identical investment
mandates. One category of mutual fund will be permitted to sell only one mutual fund scheme.
As a result of this mandate, the fund houses are now realigning their schemes and portfolio to
classify them under the newly formed categories.

So the new system aims to bring uniformity to the schemes and ensures that there is a specific
and clear categorization of schemes. Now, comparisons will be among the right things and
hopefully, using the right and relevant numbers.

46
Image no: 4

47
NEW MUTUAL FUND CATEGORIES & SUB CATEGORIES:

Equity Fund Types & Sub-Categories:

 Large Caps
 Large & Midcaps
 Midcaps
 Small Caps
 Multi Caps
 Dividend yield
 Value
 Contra
 Focused
 Sectoral/thematic
 ELSS (Equity Linked Savings Scheme)

Earlier, the definition of what is a Large Cap and what is mid cap and what is small cap was not
defined by SEBI. So fund houses used to pick and choose whatever they wished depending on
the in-house definition of market caps or their convenience!

But this has been standardized too in this exercise.

There is clear classification as to what is a large cap, mid cap or a small cap company:

 Large Cap Company: 1st to 100th company in terms of full market capitalization

 Mid Cap Company: 101st to 250th company in terms of full market capitalization

 Small Cap Company: companies beyond 250th company in terms of full market
capitalization

Fund houses will be required to rebalance their scheme portfolios within a short period based on
the updated list of market caps put out by AMFI.

Here is the latest AMFI list of Indian companies by market cap.

48
To ensure strict adherence, the individual characteristics of each of these scheme types has been
clearly defined now by SEBI. For example:

 Large Caps – to invest at least 80% in large caps

 Large & Midcaps – at least 35% each in large caps and midcaps

 Midcaps – at least 65% in midcaps

 Small caps – at least 65% in small caps

 Multi caps – at least 65% in equities & no market-cap wise restriction

 Dividend yield – at least 65% in equities but in dividend yielding stocks

 Value / contra – at least 65% in equities but a fund house can either offer a value fund or
a contra fund but not both

 Focused – atleast 65% in equities but can have a maximum of 30 stocks

 Sectoral / Thematic – atleast 80% in chosen sector stocks

 ELSS (Equity Linked Savings Scheme)

If these percentages seem a little too tight to you from fund manager’s perspective, please
understand that enough relaxation is provided for decent portfolio flexibility.

So if a fund house is running a mid-cap fund, then atleast 65% of the portfolio has to be in stocks
ranked between 101st and 250th by market cap. But the remaining 35% or lower (if higher than
65% allocated to midcaps) is available to have some large and small caps, which may be on their
way up or way down to enter into the definition of mid-cap in near future.

So enough leeway has been given to include ideas other than pure sub-category demanded
allocations as well. And this is fairly decent in my view and will still allow smart mutual fund
managers enough flexibility to build a solid portfolio of stocks in-line with their fund’s
investment objective.

And here is the best part.

49
To ensure that the number of funds is rationalized, a fund house is allowed to have only 1 type of
scheme in each sub-categories mentioned above.

Only exceptions that are allowed are in case of:

 Index Funds – can have as many schemes as there are indices

 Fund of Funds

 Sectoral / Thematic funds – can have as many schemes as there are sectors

Debt Fund Types & Sub-Categories:

The earlier categorization of debt funds was found to be very broad and hence, more clear
definitions have been drafted.

Now, the new types specify more targeted categories around the level of interest rate risk and
credit risk taken by the funds. As a result, now the debt funds have quite a large number of sub-
categories or types:

 Overnight funds

 Liquid funds

 Ultra-Short Duration funds

 Low duration funds

 Money market funds

 Short duration funds

 Medium duration funds

 Medium to long duration funds

50
  Long duration funds

 Dynamic bond funds

 Corporate bond funds

 Credit risk fund funds

 Banking and PSU funds

 Gilt funds

 Gilt funds with 10-year constant duration

 Floater funds

And here is the real difference between these funds:

 Overnight funds – holding portfolio with maturity of upto 1 day

 Liquid funds – holding portfolio with maturity of upto 91 day

 Ultra-Short Duration – holding portfolio with maturity 3-6 months

 Low duration – holding portfolio with maturity 6-12 months

 Money market – holding portfolio of money market instruments with maturity of upto 1
year

 Short duration – holding portfolio with maturity 1-3 years

 Medium duration – holding portfolio with maturity 3-4 years

 Medium to long duration – holding portfolio with maturity 4-7 years

 Long duration – holding portfolio with maturity more than 7 years

 Dynamic bond – can invest across durations

 Corporate bond – atleast 80% in corporate bonds (AA+ & above)

 Credit risk fund – atleast 65% in corporate bonds below AA

51
  Banking and PSU – atleast 80% in instruments issued by banks, PSU undertakings,
municipal corporations, etc.

 Gilt – atleast 80% in instruments issued by government across periods

 Gilt with 10-year constant duration – atleast 80% in instruments issued by government
across periods such that average maturity is 10 years

 Floater – atleast 65% in floating rate instruments

Then there are other categories too:

Hybrid Fund sub-categories

 Conservative hybrid funds – 10 to 25% equity allocation

 Balanced hybrid funds – 40 to 65% equity allocation

 Aggressive hybrid funds – 65 to 80% equity allocation

 Dynamic Asset Allocation – can vary without restrictions

 Multi-Asset funds – invest in atleast 3 assets with minimum of 10% in each

Solutions oriented Schemes

 Retirement Planning

 Children Future Planning

Other Schemes

 Index funds

 ETFs (Exchange Traded Funds)

Fund of Funds (FoF)

52
INVESTMENT STRATEGIES

WHAT ARE SYSTEMATIC INVESTMENT PLANS AND THEIR BENEFITS?

SIPs are fixed investments made at periodic intervals in predetermined products. These may be
mutual funds or even direct equities based on individual preferences and financial goals. Your
predetermined amount is invested in your chosen investment vehicle on the specified date. The
number of units you accumulate is based on the market price of the particular investment product
on the specific date. In other words, SIPs give you benefit during market dips as well since you
are able to purchase more units at a lower price. If the market is rising and the price is higher,
your predetermined amount is used to acquire a lesser number of units. An SIP is ideal for new
investors and people with a regular cash flow.

Here are four benefits of investing in mutual funds via SIP:

1. SIPs Create An Investment Discipline

2. SIPs Give You The Benefits Of Cost Averaging
3. SIPs Give You Better Liquidity Than Traditional Options
4. SIPs Offer You The Flexibility In Choosing Your Investment Amount

Now let’s look at the points in more detail:

1. SIPs Create An Investment Discipline In You

SIP encourages a disciplined approach to investing. Your bank account is directly debited by the
predetermined amount on the specified date. Therefore, you are unable to delay your investment
during a particular period stating that you do not have the required funds.

2. SIPs Give You The Benefit Of Cost Averaging

As already mentioned, the number of units purchased on the specific date depends on the market
price. Therefore, you are able to average the total cost of your SIP mutual fund investments.

3. SIPs Give You Better Liquidity Than Traditional Options

53
When you invest in a recurring or fixed deposit, you are unable to withdraw the amount before
its due date. Furthermore, if you prematurely close the deposit account, you may have to pay a
penalty or forego the interest. This kind of inflexibility is not applicable to SIP investments.
The benefits of investing in liquid funds vs fixed deposits is that you may discontinue or partially
redeem your mutual fund holdings at any time in case you need funds to meet any emergency
requirements.

4. SIPs Offer You The Flexibility In Choosing Your Investment Amount

Most SIP mutual funds are for a fixed amount invested on the specified date. However, there are
some funds that allow you to vary the SIP amount based on the prevailing market conditions.
Therefore, if the markets fall, your investment amount automatically increases and vice versa.

WHAT IS LUMP SUM INVESTING AND ITS BENEFITS?

A lump sum investment means that you invest the entire amount available at once in your chosen
financial instrument, which may be direct equity or mutual fund schemes. These are often used
by seasoned investors who have experience and knowledge about the financial markets along
with having surplus cash.

A lump sum investment is beneficial when the market and shares’ valuations are low.
Alternatively, it is a wise choice when the price-earnings (P/E) multiple of the market and the
specific stocks are low. Here are four benefits of lumpsum investing in mutual funds:

1. You Get Better Control Over Your Investments With Lumpsum Investing
2. Lumpsum Investing Gives You The Benefits Of Power Of Compounding
3. Lumpsum Investing Gives You The Power To Benefit From Market Corrections
4. Lumpsum Investing Gives You Better Returns In A Bull Market

Now let’s look at the points in more detail:

1. Lumpsum Gives You Control Over Your Investments

54
When you invest a lump sum, you are able to decide on how much to invest and which financial
instrument to purchase. Furthermore, you are able to retain control of your investment because
you do not have to rely on the judgment of fund managers. If you have the knowledge and
experience, lump sum investment and rolling over the same as per the market conditions may
enable to accumulate a significant corpus over a longer period of time.

2.Lumpsum Investing Gives You The Benefits Of Power Of Compounding

When comparing SIP vs. lump sum, you must consider the power of compounding. Your
investment in an SIP may be as low as INR 500 per month. This ensures you are able to regularly
save money over the long term. However, because the monthly installment is small, the actual
return may not be very high. On the other hand, when you invest a hefty lump sum and remain
invested for a long period, you are able to comprehend the power of compounding. Your capital
earns an income either through appreciation or interest. This income when reinvested continues
to earn additional returns. As a result, you are able to accumulate significant wealth in the long
term.

3. Lumpsum Investing Gives You The Power To Benefit From Market Corrections

If you are a well-informed and experienced investor, you may be able to benefit from market
corrections. When the market dips, you may invest a lump sum to acquire more units of your
chosen financial product. Because you entered at a lower market level, you will be able to make
higher returns on your capital investment.

4. Lumpsum Investing Gives You Better Returns In A Bull Market

As you invest the entire amount in the start during lumpsum investment, your entire amount gets
the benefit of the upward price movement for the entire duration of the bull run. On the other
hand, SIPs would have invested periodically which would have reduced the time duration of the
latter SIPs giving you a smaller share of the profits.

The best strategy includes a combination of SIP as well as lump sum investing. When you invest
a lump sum during lower market levels along with periodic SIP investments, you are able to earn

55
higher returns over a period of three to five years. However, you need to be disciplined and must
keep yourself well-informed. More importantly, you must not panic in case the market sees a
downward trend and start exiting your investments.

SIPs Vs Lumpsum

Investing a large sum of money at one go is always a high-risk proposition. What if the market
heads lower? So will your investment. Hence, a better strategy often propagated is, to break up
your lumpsum investment and buy mutual fund units over the next few months or years.
However, this strategy may not always work in every market condition.

SIPs may not often deliver returns better than a lumpsum or one-time investment. While there is
always a risk of investing a large sum of money, it has more to do with your investment horizon.

You simply cannot invest in SIP for a 1-year or 3-year period and expect returns better than a
lumpsum investment.

The primary aim of a SIP is to lower the average cost for a given investment.

Therefore, for a SIP to trump a lumpsum investment, the NAV of the subsequent investments
needs to be lower than the NAV at the time of the first investment. By doing this, you will be
able to accumulate more units. And when the NAV moves back up, you can realise the higher
value of the additional units you have accumulated.

To give a simple illustration on when SIPs work and when they do not, let’s consider these few
simple examples:

When mutual fund SIPs work -

A monthly SIP works best if the market undergoes a correction during the SIP investment phase.
If it does, you will be able to lower the average cost. Had you made a lumpsum investment, there
would be no way to average out your costs if the market corrected.

56
Hence, in this condition, SIPs outperform Lumpsum investments hands down.

Have a look at the three-year market periods in which it was an ideal time to invest via a SIP. We
assume an investment of Rs 5,000 every month. The NAV is based on the movement of the S&P
BSE Sensex.

Mutual Fund SIPs Over Bear Phases Work Best

Graph no: 2

NAV based on S&P BSE Sensex between September 1, 2010 and September 1, 2013
(Source: www.bseindia.com, PersonalFN Research)

As seen above, when the market dipped, there was ample of opportunity to lower your cost.
Thus, at the end of the period, the SIP portfolio delivered decent return, while the lumpsum
portfolio failed to deliver any gains as the NAV closed just below the purchase price.

Even Flat and Volatile Market Phases are a Good Time for SIP

57
Graph no: 3

NAV based on S&P BSE Sensex between September 1, 2000 and September 1, 2003
(Source: www.bseindia.com, PersonalFN Research)

Similarly, in an earlier period, in which the market was broadly volatile before moving back up,
there were many occasions to lower your purchase on the NAV cost. Here, though the lumpsum
investment generated gains due to a higher final NAV, the SIP performed better as you were able
to average out your costs.

Here, it is important to note that by investing a sum of money via a SIP, you would
additionally earn an interest on the investment kept in your savings account that’s linked
to your SIP. This interest would work out to extra income of Rs 10 – Rs 15,000.

Another alternative to SIP is a Systematic Transfer Plan (STP), but we’ll save that for a another
discussion.

When mutual fund SIPs do not work -

This is quite simple to understand. When the market moves in exactly the opposite way as the
periods considered above, that is when SIPs will fail to outperform a lumpsum investment.

58
This is because you will be purchasing units at a higher price, making your average purchase
cost higher than the initial NAV of the first instalment or the lumpsum investment.

Take a look at the below market periods

Starting a SIP in A Market Rally May Disappoint

Graph no: 4

NAV based on S&P BSE Sensex between May 1, 2009 and May 1, 2012
(Source: www.bseindia.com, PersonalFN Research)

As seen above, as the market moves higher, the subsequent investments of the SIP were made at
a higher NAV, increasing the purchase cost. So, even though the NAV ended at a higher value
compared to when it started, the SIP returns were negative. In other words, it led to a capital loss.
As the market ended higher, the lumpsum investment generated a higher gain.

The Key for SIPs to Outperform Lumpsum Is To Lower the Average Cost of Investment

59
Graph no: 5

NAV based on S&P BSE Sensex between August 1, 2014 and August 1, 2017
(Source: www.bseindia.com, PersonalFN Research)

While this may initially seem like a good time for SIPs compared to a lumpsum investment, it
was not. As seen in the chart, a small window of opportunity existed to lower your purchase cost
when the market tanked in February 2016. On the rest of the occasions, the SIP investments
came in at a higher price. As the data shows, the lumpsum investment did marginally better than
SIP.

Thus, even if you pick the best mutual fund for a SIP, it may not work in your favour if the
market continues to tread higher after your initial investment.

SIP or Lumpsum - Which route should you choose?

If you take a finer look at the above illustrations, SIPs did well when it was started at market
peaks. Because, when the market corrected, it gave investors an opportunity to lower their costs.

If you started a SIP at a market bottom phase, your subsequent investments would have come at
a higher cost. Hence, a lumpsum investment would have done better.

60
However, here’s the caveat — if you could identify market bottom or market peaks, you would
now be sitting on tons of extra income. Remember, the above examples have been cherry-picked
to show the market phases that SIPs worked in and when it did not.

No one can say for sure where markets are headed. One could employ market-timing strategies,
but they may not always work.

The Sensex has hit a peak of 33,000. Could one say for sure it would touch this level when it was
at 30,000? It could only be a lucky guess. Those who started a SIP instead of a lumpsum at
30,000 thinking markets would correct would now be investing at a higher NAV. But, what if the
markets had corrected like in February 2016? Hence, there is always a risk

61
 DATA ANALYSIS

The data was obtained from the customer data of kotak asset Management Company. The data
consist of:-

 No of customers
 No of SIP’s
 Age group
 No of Schemes

The customer groups in data analysis were IFA’s (Independent financial advisors). IFA’s are the
distributors of mutual funds who have the license to sell mutual fund. The number of customers
pitched during the internship period were around 100. The customer data was received from
AMFI website (association of mutual fund industry of India).

The Schemes were sold on the basis of Comparative analysis of statements. It included the
comparison of kotak schemes and peer schemes also. The most selling scheme of kotak is Kotak
Standard Multicap Fund for long term basis. Kotak Standard Multicap Fund (Erstwhile Kotak
Select Focus Fund) is an open-ended equity scheme. The investment objective of the scheme is
to generate long-term capital appreciation from a portfolio of predominantly equity & equity
related securities generally focused on a few selected sectors across market capitalisation.

The targeted age groups were between 25-40 reason being the earning source and at the early
30’s. As they want to secure for the future security. Investment in Mutual funds is done as it
diversifies risk and is also an advantage being managed by professional management. The
portfolio manager decides where to invest the funds and when to buy and sell investment.

Age Group No Limit

Number of Sip’s 25

Number of Customer 100

Number of Schemes 5

62
Types of mutual fund scheme
The first thing that has been done is to define 5 very clear groups to classify all the schemes.
These 5 mutual fund categories are:

1. Equity Schemes – will invest in equity and equity related instruments

2. Debt Schemes – will invest in debt instruments
3. Hybrid Schemes – will invest in a mix of equity, debt and other assets related instruments
4. Solution Oriented Schemes – will have schemes like retirement schemes or children
savings scheme
5. Other Schemes – will have Index funds, Fund-of-Funds and ETFs

Return on equity scheme

Image no: 5

source: https://assetmanagement.kotak.com/kotak-standard-multicap-fund

63
Return on debt scheme

Image no: 6

Source: https://assetmanagement.kotak.com/kotak-low-duration-fund-formerly-known-as-
pinebridge-india-short-term-fund-

Return on balanced scheme

Image no: 7

Source: https://assetmanagement.kotak.com/kotak-equity-hybrid

64
Return on tax scheme
Image no: 8

Source: https://assetmanagement.kotak.com/kotak-tax-saver1

Return on other scheme

Image no: 9

Source: https://assetmanagement.kotak.com/kotak-asset-allocator-fund

65
Interpretation: After studying the SIP’s scheme of Kotak Asset Management
Company I suggested the customers to switch for Kotak Standard Multicap Fund
rather than Kotak Low duration Fund. This product is suitable for investors who
are seeking:

 Long term capital growth

 Investment in portfolio of predominantly equity & equity related securities
generally focused on a few selected sectors.
 It gives higher returns as compared to other schemes
 Since this scheme has higher return, investors are ready to take moderately
high risk.
Image no: 10

Investors should consult their financial advisors if in doubt about whether the
product is suitable for them.

66
 HYPOTHESIS TESTING

SET 1:
HO: Mutual fund strategies does not help investors to diversify portfolio.
H1: Mutual fund strategies help investors to diversify portfolio.
Kotak Standard Multicap fund (Asset Allocation)
Image no: 11

Source: https://assetmanagement.kotak.com/kotak-standard-multicap-fund
From the above asset allocation table of Kotak Standard Multicap Fund it is seen that the fund
invested is diversified in the various sector like financial services, energy, consumer goods,
automobile, IT, Cement sector, Construction and Industrial Manufacturing which is allocated
with weightage of 36.58%,13.80%, 9.37%, 8.39%, 6.93%, 6.11%, 4.75% and 2.10%
respectively.
Hence this all allocation of funds is done on the basis prior in-depth research by Fund
Managers.
So, the image no.10 gives the justification to diversification of mutual funds based on various
factors considered by the researchers.
Hence, We Accept H1 and reject H0.

67
 LIMITATIONS

• The present study was made on the basis of information collected. Therefore conclusions
have relevance to the situation of the Asset management company at the time of study. If some
changes have been introduced in the Asset management company, the conclusion subject to vary
and impose limitation on the study.
• The study was completed within a short period of time and it is very difficult to go
through entire policies and processes of the Asset management company.
• Because of strategies adopted by the Asset management company, it is not possible to
gather all the information necessary for the study. Several times, an organization wants to keep
their document confidential which generates hindrances in the process of data collection.
• It may be that employees might not furnish exact and correct information because of
loyalty to their company, and not wanting to share facts about their company that may not pose a
positive picture of their Asset management company

68
 CONCLUSION

On the basis of this study, I can conclude that Mutual Fund SIP is a monthly based investment
plan through which an investor could invest a fixed sum into mutual funds every month at pre-
decided dates. This hedges the investor from market instability and derives maximum benefit as
the investment is done at regular basis irrespective of market conditions. SIP is a feature
especially designed for investors who wish to invest small amounts on a regular basis to build
wealth over a long
term. It inculcates the habit of regular savings and does not encourage timing and speculation in
the markets. The study would be helpful for the small investors by entering into capital market
by using the Systematic investment plan. Like every investment avenue, SIP also suffers from
various disadvantages but it still seems to be one of the best investment option available to a long
term investor especially First-time investors, Salaried people etc.

69
 FINDINGS

From the above studies it is seen that the investment in mutual fund is much better than direct
investment in capital market instruments, as mutual fund investments are based on the research
by professional management team which makes the investment comparatively secured and
diversified in the appropriate sectors based on their high level returns.

70
 APPENDICES

BIBLIOGRAPHY

I. Aarthy B, Aswathy A Nair, Anju Sai P, Amrita Vishwa Vidyapeetham, 2015,

International Journal of Scientific and Research Publications, Volume 5, Factors affecting
Investment on Mutual Funds and Its Preference of Retail Investors.

II. Dr. Ujjwal M. Mishra & Mr. Chetan Borole, 2017, Imperial Journal of Interdisciplinary
Research (IJIR), Comparative risk analysis of Kotak Select Focus Fund.

III. Dr. Binod Kumar Singh, 2012, Issue2, Vol. 2 , Investors’ Attitude towards Mutual Funds
as an investment option.

IV. Dr anand damani, 2013, A Comparative Study of Performance of Top 5 Mutual Funds in
India.

V. Debalina Roy and Koushik Gosh, 211, Global Journal of Finance and Economic
Management.Volume 1, Number 1, pp. 49-62, The Scenario of Investment in Systematic
Investment.

VI. Dimple Batra, 2012, Volume 3 Issue, A Dea comparison of systematic and lumpsum
investment in mutual funds.

VII. Dr. Soheli Ghose, 2010, An analysis of the different types of systematic plans of mutual
fund investments in india.

VIII. Anich uddin, 2016, Investor Perception about Systematic Investment Plan (SIP).

IX. Laxman Prasad and Dr.S.K.Sharma, 2012, Identifying the Consumer`s Investment
Behaviour towards Systematic Investment Plan in Bhilai Region.

X. Rishab Telukunta, 2015, Mutual Funds and Systematic Investment plans with their best
performing funds.

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