MUTUAL FUND: COMPARISON OF VARIOUS SCHEMES UNDER

EQUITY

A project submitted to
University of Mumbai for partial completion of the degree of
Bachelor in Commerce (Accounting and Finance)
Under the Faculty of Commerce

BY
PRATAP SHRIKRISHNA CHAVAN

Under the guidance of

PROF MACKRINA TUSCANO

Shankar Narayan College of Arts Commerce and

Science Mahavidyalaya Marg, Navghar Gaon,
Bhayandar (East), Thane, Maharashtra 401105

Academic Year
2020-2021

Semester VI

UNIVERSITY OF MUMBAI

1
 DECLARATION

I the undersigned PRATAP SHRIKRISHNA CHAVAN here by, declare that

the work embodied in this project work titled “MUTUAL FUND:
COMPARISON OF VARIOUS SCHEMES UNDER EQUITY” from my
own contribution to the research work carried out under the guidance of
MACKRINA TUSCANO is a result of my own research work and has not been
previously submitted to any other University for any other Degree\ Diploma to
this or any other university.
Wherever reference has been made to previous works of others, it has been
clearly indicated as such and included in the bibliography.

I, hereby further declare that all information of this document has been obtained
and presented in accordance with academic and ethical conduct.

PRATAP SHRIKRISHNA CHAVAN

Certified by

PROF MACKRINA TUSCANO

2
 Acknowledgement

To list who all have helped me is difficult because they are so numerous
and the depth is so enormous.
I would like to acknowledge the following as being idealistic channels and
fresh dimensions in the completion of the project.
I take this opportunity to thank the University of Mumbai for giving me
chance to do this project.
I would like to thank my Principal, Dr. V. N. YADAV for providing the
necessary facilities required for completion of this project.
I take this opportunity to thank our HOD BRINDA SHAH for her moral
support and guidance.
I would also like to express my sincere gratitude towards my project guide
PROF. MACKRINA TUSCANO whose guidance and care made the
project successful.
I would like to thank my College Library, for having provided various
reference books and magazines related to my project.
Lastly, I would like to thank each and every person who directly or
indirectly helped me in the completion of the project especially my
parents and peers who supported me throughout my project.

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 Executive Summary
The Mutual Fund is an untapped area which is bound to be the next growth story. While this
area had been on a downward track since 2008, it has started showing signs of recovery. This
project emphasis on, “Mutual Funds: Comparison of various schemes under equity”,
conducted at Master Trust Ltd. In this project I have analysed the Mutual Funds Schemes,
particularly the Equity Diversified open ended (growth) schemes and compared schemes of
various fund houses, namely ICICI PRUDENTIAL, SBI and RELIANCE to evaluated in
which scheme to invest & from which to switch and current performance and position of
these schemes as well.

Taking into consideration the various mutual fund schemes under equity I have chosen:

□ Future Outlook
□ Quarterly, Half Yearly and Yearly performance
□ Top holdings and weightage to them
□ Top sectors and weightage to them
□ Latest NAV and
□ Management
□ Entry & Exit loads

As the various tools for evaluation.

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 INDEX

SR. NO PARTICULAR PAGE NO.

Chapter 1 Introduction 6
1.1 Introduction to Company (Master Trust Ltd)
1.2 Objectives
Chapter 2 Mutual Fund 10
2.1 Basis
2.2 History
2.3 Types of Mutual Funds
2.4 Pros and Cons
Chapter 3 Equity Funds Explained 20

Chapter 4 Fund House 21

4.1 ICICI Prudential
4.2 Reliance
4.3 SBI
Chapter 5 Comparison of various funds under equity 49

Chapter 6 Conclusion 58
Chapter 7 Latest Amendment in Mutual Fund 59

Reference 60

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 CHAPTER 1
INTRODUCTION

1.1 INTRODUCTION TO COMPANY (MASTER TRUST LTD)

OVERVIEW

Master Trust Group is one of the leading financial services company in India. We have a
strong belief in nurturing investment culture, attitude and inculcating a very strong approach
towards value investing forms the central part of any sound investment philosophy. With an
impeccable track record in client servicing of over two decades, we have now grown to 650+
strong employee organizations with over 1, 50,000+ client relationships. At Master Trust, our
endeavour is to constantly meet every financial need of our esteemed clients.

“master trust” - is a one-point shop for all the investment needs of a customer. The one-
stop destination is specifically targeted towards the retail customers who require a very strong
relationship driven approach towards value investing. The philosophy of “master trust” has
its genesis from Master Trust group’s belief in nurturing the investment culture towards value
investing.

MISSION

To always earn the right to be our clients’ first choice through personal & social wealth
maximization

VISION

To be well diversified financial shop for wealth creation and being an ideal service provider in
our domain of business

CORPORATE PHILOSOPHY
Becoming an expert at anything takes a strong will, unyielding determination and pure ability

VALUE SYSTEM

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YEAR MILESTONE
1985 The seeds of the group were Swon as Arora financial consultants(P)Ltd. (later
converted into master trust ltd.)
1986 Acquired membership of Ludhiana stock exchange under the name of M/S H
Arora and co (later converted into a corporate membership as master share and
stock brokers ltd.)
1987 Became members of DSE (Delhi Stock Exchange) under the name of M/s Harjit
Arora and co. (later converted into a corporate membership as MTL share and
stock brokers ltd.)
1993 Acquired the status of SEBI accredited category| Merchant Bankers
Became dealers of OTCEI (Over the Counter Exchange of India)
1994 Master Capital Services Ltd. Became corporate members of NSE (National Stock
Exchange of India Ltd.)
1995 Master Trust Ltd. Came out with an IPO (Initial Public Offer) of equity share
&
fully convertible debentures
Upgraded dealership of OTCEI to membership
1997 Became RBI approved Fully Fledge Money Changers
1999 Launched depository services as a Depository Participant of NSDL
2001 Launched depository services as a Depository Participant of CSDL
Commenced trading in Derivatives Segments in NSE
2002 Entered into insurance business as corporate agents for Life and
General
Insurance
2004 Became member of NCDEX (National Commodity Derivatives Exchange Ltd.)
and MCX (Multi Commodity Exchange of India Ltd.)
Introduced Virtual Private Network (VPN)
Became insurance broker under name of M/s Master Insurance Brokers.
2006 Acquired the membership of BSE (Bombay Stock Exchange Ltd.)
Commenced internet trading and margin funding against shares
2007 Set up regional offices in Baroda, Kolkata and Hyderabad
2008 Introduced Currency Derivatives Trading Through MCX-SX & NSE
2009 Established an arbitrage desk implemented Master Swift Established CRM
2010 Trading turnover peaks US$ 1 billion/day of group companies
Became Member of NSEL and ACE Arbitrage desk activated spot commodity
rebranding exercise of retail services

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 BOARD OF DIRECTORS

Mr. Harjit Singh Arora (F.C.A., F.C.S.), is the Managing Director

of the Company and has more than 25 years of experience in corporate,
financial and merchant banking matters. He is one of the promoters of
the company and has been involved in the secondary and primary
markets right from the incorporation of the company.

Mr. R.K. Singhania (F.C.A.) is well known personality in the

corporate circles. He is the Director of the Company and was formerly
the Director (Finance) with India’s premier Oswal group for more than
10 years. He is one of the promoters and has rich experience in the
corporate M&A space with deals worth Rs. 50 billion executed in FY
2005-06 alone. He is having more than 25 years’ experience in
corporate strategy, tax planning & financial engineering internationally.
Mr. Pawan Chhabra (F.C.A.) is having a rich experience of more
than 20 years in primary and secondary share market and merchant
banking activities. His primary responsibility includes lesioning with
SEBI, RBI, NSE, BSE, MCX, NCDEX and FI/ FII business
development.

Mr. G.S. Chawla (B.E., M.B.A., D.B.F.) has worked with a public
financial Institution for more than 12 years. He has 15 years rich
experience of capital market, finance and other related activities. His
primary responsibility involves development of PMS business,
advisory & research, merchant banking, insurance broking and
technology initiatives.

Mr. Harinder Singh (B. Com, I.C.W.A.—inter) has been

monitoring the secondary market operations of the company for the last
12 years. He looks after compliances, secondary & commodity market,
margin funding, mutual fund distribution, IPOs, arbitrage and business
development.

Mr. Sanjay Sood (F.C.A.) is having more than 15 years of

experience in Merchant Banking, Foreign Exchange Management,
Financial and Retail Services. He is responsible for looking after the
FX business and the depository business.

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1.2 OBJECTIVES OF THE STUDY

Primary Objective:

Comparison of similar schemes of different fund houses, their evaluation and which scheme
is best to invest and from where the money should be taken out. Study of various fund
houses, their management and the future outlook.

Secondary Objective:

Study of the basic Mutual Fund Industry

Fundamental Analysis

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 CHAPTER 2
MUTUAL FUNDS

2.1 BASICS OF MUTUAL FUNDS

Before explaining what is mutual fund, it’s very important to know the area in which mutual
funds works, the basic understanding of stocks and bonds.

STOCKS

Stocks represent shares of ownership in a public company. Examples of public companies

include Reliance, ONGC and Infosys. Stocks are considered to be the most common owned
investment traded on the market.

BONDS

Bonds are basically the money which you lend to the government or a company, and in return
you can receive interest on your invested amount, which is back over predetermined amounts
of time. Bonds are considered to be the most common lending investment traded on the
market. There are many other types of investments other than stocks and bonds (including
annuities, real estate, and precious metals), but the majority of mutual funds invest in stocks
and/or bonds.

MUTUAL FUNDS

A Mutual Fund is a trust that pools the savings of a number of investors who share a common
financial goal. The money thus collected is then invested in capital market instruments such
as shares, debentures and other securities. The income earned through these investments and
the capital appreciation realised are shared by its unit holders in proportion to the number of
units owned by them. Thus, a Mutual Fund is the most suitable investment for the common
man as it offers an opportunity to invest in a diversified, professionally managed basket of
securities at a relatively low cost. The flow chart below describes broadly the working of a
mutual fund:

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Mutual funds are considered as one of the best available investments as compare to others,
they are very cost efficient and also easy to invest in, thus by pooling money together in a
mutual fund, investors can purchase stocks or bonds with much lower trading costs than if
they tried to do it on their own. But the biggest advantage to mutual funds is diversification,
by minimizing risk & maximizing returns.

DIVERIFICATION

Diversification is nothing but spreading out your money across available or different types of
investments. By choosing to diversify respective investment holdings reduces risk
tremendously up to certain extent. The most basic level of diversification is to buy multiple
stocks rather than just one stock. Mutual funds are set up to buy many stocks. Beyond that,
you can diversify even more by purchasing different kinds of stocks, then adding bonds, then
international, and so on. It could take you weeks to buy all these investments, but if you
purchased a few mutual funds you could be done in a few hours because mutual funds
automatically diversify in a predetermined category of investments (i.e. - growth companies,
emerging or mid-size companies, low-grade corporate bonds, etc).

2.2 HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY: The mutual fund
industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of
the Government of India and Reserve Bank of India. The history of mutual funds in India can
be broadly divided into four distinct phases.

First Phase – 1964-87

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

Second 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.

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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.

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. 1,21,805
crores. The Unit Trust of India with Rs.44,541 crores of assets under management were 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.

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The graph indicates the growth of assets over the years:

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2.3 TYPES OF MUTUAL FUND SCHEMES

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position,
risk tolerance and return expectations etc. thus mutual funds has Variety of flavours, being a
collection of many stocks, an investor can go for picking a mutual fund might be easy. There
are over hundreds of mutual funds scheme to choose from. It is easier to think of mutual
funds in categories, mentioned below

Overview of existing schemes existed in mutual fund category: BY

STRUCTURE
1. Open - Ended Schemes:

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.

2. Close - Ended Schemes:

These schemes have a pre-specified maturity period. One can invest directly in the scheme at
the time of the initial issue. Depending on the structure of the scheme there are two exit
options available to an investor after the initial offer period closes. Investors can transact (buy
or sell) the units of the scheme on the stock exchanges where they are listed. The market price
at the stock exchanges could vary from the net asset value (NAV) of the scheme on account
of demand and supply situation, expectations of unitholder and other market factors.
Alternatively, some close-ended schemes provide an additional option of selling the units
directly to the Mutual Fund through periodic repurchase at the schemes NAV; however, one
cannot buy units and can only sell units during the liquidity window. SEBI Regulations
ensure that at least one of the two exit routes is provided to the investor.

3. Interval Schemes:

Interval Schemes are that scheme, which combines the features of open-ended and close-
ended schemes. The units may be traded on the stock exchange or may be open for sale or
redemption during pre-determined intervals at NAV related prices.

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The risk return trade-off indicates that if investor is willing to take higher risk then
correspondingly, he can expect higher returns and vice versa if he pertains to lower risk
instruments, which would be satisfied by lower returns. For example, if an investor 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-bonds that give out more return which is slightly
higher as compared to the bank deposits but the risk involved also increases in the same
proportion.

Thus, investors choose mutual funds as their primary means of investing, as Mutual funds
provide professional management, diversification, convenience and liquidity. That doesn’t
mean mutual fund investments risk free. This is because the money that is pooled in are not
invested only in debts funds which are less risky but are also invested in the stock markets
which involves a higher risk but can expect higher returns. Hedge fund involves a very high
risk since it is mostly traded in the derivatives market which is considered very volatile

Overview of existing schemes existed in mutual fund category: BY

NATURE
1. Equity fund:

These funds invest a maximum part of their corpus into equities holdings. The structure of the
fund may vary different for different schemes and the fund manager’s outlook on different
stocks. The Equity Funds are sub-classified depending upon their investment objective, as
follows:

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 □ Diversified Equity Funds

□ Mid-Cap Funds

□ Sector Specific Funds

□ Tax Savings Funds (ELSS)

Equity investments are meant for a longer time horizon; thus, Equity funds rank high on the
risk-return matrix.

2. Debt funds:

The objective of these Funds is to invest in debt papers. Government authorities, private
companies, banks and financial institutions are some of the major issuers of debt papers. By
investing in debt instruments, these funds ensure low risk and provide stable income to the
investors. Debt funds are further classified as:

□ Gilt Funds: Invest their corpus in securities issued by Government, popularly known
as Government of India debt papers. These Funds carry zero Default risk but are
associated with Interest Rate risk. These schemes are safer as they invest in papers
backed by Government.
□ Income Funds: Invest a major portion into various debt instruments such as
bonds, corporate debentures and Government securities.
□ MIPs: Invests maximum of their total corpus in debt instruments while they take
minimum exposure in equities. It gets benefit of both equity and debt market. These
scheme ranks slightly high on the risk-return matrix when compared with other debt
schemes.
□ Short Term Plans (STPs): Meant for investment horizon for three to six months.
These funds primarily invest in short term papers like Certificate of Deposits (CDs)
and Commercial Papers (CPs). Some portion of the corpus is also invested in
corporate debentures.
□ Liquid Funds: Also known as Money Market Schemes, these funds provide easy
liquidity and preservation of capital. These schemes invest in short-term instruments
like Treasury Bills, inter-bank call money market, CPs and CDs. These funds are
meant for short-term cash management of corporate houses and are meant for an
investment horizon of 1day to 3 months. These schemes rank low on risk-return
matrix and are considered to be the safest amongst all categories of mutual funds.

3. Balanced funds:

As the name suggest they, are a mix of both equity and debt funds. They invest in both
equities and fixed income securities, which are in line with pre-defined investment objective
of the

16
scheme. These schemes aim to provide investors with the best of both the worlds. Equity part
provides growth and the debt part provides stability in returns.

Overview of existing schemes existed in mutual fund category: BY

INVESTMENT OBJECTIVES

□ Growth Schemes: Growth Schemes are also known as equity schemes. The aim of
these schemes is to provide capital appreciation over medium to long term. These
schemes normally invest a major part of their fund in equities and are willing to bear
short-term decline in value for possible future appreciation.
□ Income Schemes: Income Schemes are also known as debt schemes. The aim of these
schemes is to provide regular and steady income to investors. These schemes
generally invest in fixed income securities such as bonds and corporate debentures.
Capital appreciation in such schemes may be limited.
□ Balanced Schemes: Balanced Schemes aim to provide both growth and income by
periodically distributing a part of the income and capital gains they earn. These
schemes invest in both shares and fixed income securities, in the proportion indicated
in their offer documents (normally 50:50).
□ Money Market Schemes: Money Market Schemes aim to provide easy liquidity,
preservation of capital and moderate income. These schemes generally invest in safer,
short-term instruments, such as treasury bills, certificates of deposit, commercial
paper and inter-bank call money.
• Other schemes:
Tax Saving Schemes: Tax-saving schemes offer tax rebates to the investors under tax
laws prescribed from time to time. Under Sec.88 of the Income Tax Act, contributions
made to any Equity Linked Savings Scheme (ELSS) are eligible for rebate.
Index Schemes: Index schemes attempt to replicate the performance of a particular
index such as the BSE Sensex or the NSE 50. The portfolio of these schemes will
consist of only those stocks that constitute the index. The percentage of each stock to
the total holding will be identical to the stocks index weightage. And hence, the
returns from such schemes would be more or less equivalent to those of the Index.
Sector Specific Schemes: These are the funds/schemes which invest in the securities
of only those sectors or industries as specified in the offer documents. e.g.,
Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleum
stocks, etc. The returns in these funds are dependent on the performance of the
respective sectors/industries. While these funds may give higher returns, they are
riskier compared to diversified funds. Investors need to keep a watch on the
performance of those sectors/industries and must exit at an appropriate time.

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 TYPES OF RETURNS

There are three ways, where the total returns provided by mutual funds can be enjoyed by
investors:

□ Income is earned from dividends on stocks and interest on bonds. A fund pays out
nearly all income it receives over the year to fund owners in the form of a
distribution.
□ If the fund sells securities that have increased in price, the fund has a capital gain.
Most funds also pass on these gains to investors in a distribution.
□ If fund holdings increase in price but are not sold by the fund manager, the fund's
shares increase in price. You can then sell your mutual fund shares for a profit. Funds
will also usually give you a choice either to receive a check for distributions or to
reinvest the earnings and get more shares.

2.4 PROS AND CONS OF MUTUAL FUNDS

For investments in mutual fund, one must keep in mind about the Pros and cons of
investments in mutual fund.

Advantages of Investing Mutual Funds:

1. Professional Management - The basic advantage of funds is that, they are

professional managed, by well qualified professional. Investors purchase funds because they
do not have the time or the expertise to manage their own portfolio. A mutual fund is
considered to be relatively less expensive way to make and monitor their investments.

2. Diversification - Purchasing units in a mutual fund instead of buying individual stocks

or bonds, the investors risk is spread out and minimized up to certain extent. The idea behind
diversification is to invest in a large number of assets so that a loss in any particular
investment is minimized by gains in others.

3. Economies of Scale - Mutual fund buy and sell large amounts of securities at a time,
thus help to reducing transaction costs, and help to bring down the average cost of the unit for
their investors.

4. Liquidity - Just like an individual stock, mutual fund also allows investors to
liquidate their holdings as and when they want.

5. Simplicity - Investments in mutual fund is considered to be easy, compare to other available

instruments in the market, and the minimum investment is small. Most AMC also have automatic
purchase plans whereby as little as Rs. 2000, where SIP start with just Rs.50 per month basis.

18
Disadvantages of Investing Mutual Funds:

1. Professional Management- Some funds don’t perform in neither the market, as their
management is not dynamic enough to explore the available opportunity in the market, thus
many investors debate over whether or not the so-called professionals are any better than
mutual fund or investor himself, for picking up stocks.

2. Costs – The biggest source of AMC income is generally from the entry & exit load which
they charge from investors, at the time of purchase. The mutual fund industries are thus
charging extra cost under layers of jargon.

3. Dilution - Because funds have small holdings across different companies, high returns
from a few investments often don't make much difference on the overall return. Dilution is
also the result of a successful fund getting too big. When money pours into funds that have
had strong success, the manager often has trouble finding a good investment for all the new
money.

4. Taxes - when making decisions about your money, fund managers don't consider your
personal tax situation. For example, when a fund manager sells a security, a capital-gain tax
is triggered, which affects how profitable the individual is from the sale. It might have been
more advantageous for the individual to defer the capital gains liability.

REGULATORY AUTHORITIES

To protect the interest of the investors, SEBI formulates policies and regulates the mutual
funds. It notified regulations in 1993 (fully revised in 1996) and issues guidelines from time
to time. MF either promoted by public or by private sector entities including one promoted by
foreign entities is governed by these Regulations.

SEBI approved Asset Management Company (AMC) manages the funds by making
investments in various types of securities. Custodian, registered with SEBI, holds the
securities of various schemes of the fund in its custody.

According to SEBI Regulations, two thirds of the directors of Trustee Company or board of
trustees must be independent. The Association of Mutual Funds in India (AMFI) reassures
the investors in units of mutual funds that the mutual funds function within the strict
regulatory framework. Its objective is to increase public awareness of the mutual fund
industry.

AMFI also is engaged in upgrading professional standards and in promoting best industry
practices in diverse areas such as valuation, disclosure, transparency etc.

19
 CHAPTER 3
EQUITY FUNDS EXPLAINED

Most mutual funds invest in stocks, and these are called equity funds. While mutual funds
most often invest in the stock market, fund managers don't just buy any old stock they find
attractive. Some funds specialize in investing in large-cap stocks, others in small-cap stocks,
and still others invest in what's left -- mid-cap stocks.

"Cap" has nothing to do with its dictionary meanings. On Wall Street, cap is shorthand for
capitalization, and is one way of measuring the size of a company -- how well it's capitalized.
Large-cap stocks have market caps of billions of dollars, and are the best-known companies
in the U.S. Small-cap stocks are worth several hundred million dollars, and are newer, up-
and- coming firms. Mid-caps are somewhere in between.

Mutual funds are often categorized by the market capitalization of the stocks that they hold in
their portfolios. But how big is a large cap stock? Formulas differ, but here is one guideline:

□ Small-cap stocks < $500 million

□ Mid-cap stocks $500 million to $5 billion

□ Large-cap stocks > $5 billion

Equity fund managers usually employ one of three particular styles of stock picking when
they make investment decisions for their portfolios. Some fund managers use a value
approach to stocks, searching for stocks that are undervalued when compared to other, similar
companies. Often, the share prices of these stocks have been beaten down by the market as
investors have become pessimistic about the potential of these companies.

Another approach to picking is to look primarily at growth, trying to find stocks that are
growing faster than their competitors, or the market as a whole. These funds buy shares in
companies that are growing rapidly -- often well known, established corporations.

Some managers buy both kinds of stocks, building a portfolio of both growth and value
stocks. This is known as the blend approach

20
 CHAPTER 4
FUND
HOUSES

A fund house is a company/firm that owns and operates a mutual fund. They own the fund
and decide on the investment strategies to be followed with the money that was collected
from the investor public for the fund.

Various fund houses taken as samples for the comparison of schemes are:

1. ICICI PRUDENTIAL ASSEST MANAGEMENT COMPANY

2. RELIENCE MUTUAL FUND
3. SBI MUTUAL FUND

The sample of ten comparisons of schemes falling under equity category has been selected
for analysis, these comparisons are:

C.1 ICICI PRUDENTIAL FOCUSED BLUECHIP EQUITY FUND vs.

RELIENCE EQUITY FUND vs. SBI BLUECHIP FUND

C.2 ICICI PRUDENTIAL TAX PLAN vs. RELIENCE TAX SAVER (ELSS) FUND vs. SBI
MAGNUM TAXGAIN SCHEME

C.3 ICICI PRUDENTIAL INFRATRUCTURE FUND vs. RELIENCE

INFRASTRUCTURE FUND vs. SBI INFRASTRUCTURE FUND SERIES I

C.4 RELIENCE NRI EQUITY FUND vs. SBI MAGNUM NRI INVESTMENT FUND

C.5 ICICI PRUDENTIAL BANKING & FINANCIAL SERVICE SECTOR ORIENTED

FUND vs. RELIENCE BANKING FUND

C.6 ICICI PRUDENTIAL TECHNOLOGY FUND vs. SBI MSFU- IT FUND

C.7 ICICI PRUDENTIAL FMCG FUND vs. SBI MSFU- FMCG FUND

C.8 RELIENCE INDEX FUND NIFTY PLAN vs. SBI MAGNUM INDEX FUND

C.9 RELIENCE PHARMA FUND vs. SBI MSFU- PHARMA FUND

C.10 RELIENCE ARBITRAGE ADVANTAGE vs. SBI ARBITRAGE OPPORTUNITY

FUND

Further in the project, first the introduction of fund houses and then the comparisons of
various schemes (stated above) are explained.

21
 4.1 ICICI PRUDENTIAL ASSET MANAGEMENT COMPANY

ICICI Prudential Asset Management Company Ltd. (IPAMC/ the Company) is the joint
venture between ICICI Bank, a well-known and trusted name in financial services in India
and Prudential Plc, one of UK’s largest players in the financial services sectors. IPAMC was
incorporated in the year 1993. The Company in a span of over 18 years since inception and
just over 13 years of the Joint Venture, has forged a position of pre-eminence in the Indian
Mutual Fund industry as the third largest asset management company in the country,
contributing significantly to the growth of the Indian mutual fund industry. The Company
manages significant Mutual Fund Asset Under Management (AUM), in addition to Portfolio
Management Services and International Advisory Mandates for clients across international
markets in asset classes like Debt, Equity and Real Estate with primary focus on risk adjusted
returns.

IPAMC has witnessed substantial growth in scale. From merely 2 locations and 6 employees
during inception to the current strength of over 700 employees with reach across around 150
locations, the growth momentum of the Company has been exponential. The organization
today is an ideal mix of investment expertise, resource bandwidth & process orientation.
IPAMC’s Endeavour is to bridge the gap between savings & investments to help create long
term wealth and value for investors through innovation, consistency and sustained risk
adjusted performance.

ICICI Bank

ICICI Bank is India's second-largest bank with total assets of Rs. 4,062.34 billion (US$ 91
billion) at March 31, 2011 and profit after tax Rs. 51.51 billion (US$ 1,155 million) for the
year ended March 31, 2011. The Bank has a network of 2,538 branches and about 6,810
ATMs in
India, and has a presence in 19 countries, including
India.

ICICI Bank offers a wide range of banking products and financial services to corporate and
retail customers through a variety of delivery channels and through its specialised
subsidiaries in the areas of investment banking, life and non-life insurance, venture capital
and asset management.

22
The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in
United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International
Finance Centre and representative offices in United Arab Emirates, China, South Africa,
Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches
in Belgium and Germany.

ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National
Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on
the New York Stock Exchange (NYSE).

Prudential Plc (formerly known as Prudential Corporation plc)

Prudential plc is an international financial services group with significant operations in Asia,
the US and the UK. They serve approximately, 25 million customers and have £290 billion in
assets under management. They are among the leading capitalized insurers in the world with
an Insurance Groups Directive (IGD) capital surplus estimated at £3.4 billion (as at 31
December 2009).

The Group is structured around four main business units:

Prudential Corporation Asia (PCA)

PCA is a leading life insurer in Asia with presence in 12 markets and a top three position in
seven key locations: Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, and
Vietnam. PCA provides a comprehensive range of savings, protection and investment
products that are specifically designed to meet the needs of customers in each of its local
markets. PCA’s asset management business in Asia has retail operations in 10 markets and it
independently manages assets on behalf of a wide range of retail and institutional investors
across the region.

Jackson National Life Insurance Company

Jackson is one of the largest life insurance companies in the US, providing retirement savings
and income solutions to more than 2.8 million customers. It is also one of the top five
providers of variable and fixed index annuities in the US. Founded nearly 50 years ago,
Jackson has a long and successful record of providing effective retirement solutions for their
clients.

Prudential UK & Europe (PUE)

PUE is a leading life and pension’s provider to approximately 7 million customers in the UK.
It has a number of major competitive advantages including significant longevity experience,
multi
23
asset investment capabilities, a strong investment track record, a highly respected brand and
financial strength. PUE continues to focus on its core strengths including its annuities,
pensions and investment products where it can maximize the advantage it has in offering
with-profits and other multi-asset investment funds.

M&G

M&G is Prudential’s UK and European fund management business with total assets under
management of £174 billion (as at December 31, 2009).M&G has been investing money for
individual and institutional clients for nearly 80 years. Today it is among the largest investors
in the UK stock market, as well as being a powerhouse in fixed-income investments.
Prudential plc of the United Kingdom is not affiliated in any manner with Prudential
Financial, Inc., a company whose principal place of business is in the United States of
America.

MANAGEMENT

Mr. Nimesh Shah- Managing Director & Chief Executive Officer: Nimesh
Shah joined ICICI Prudential AMC as its Managing Director in July 2007.Nimesh has
completed his Chartered Accountancy. Prior to joining ICICI Prudential AMC, Nimesh was
Senior General Manager at ICICI Bank and has over 18 years’ experience in banking and
financial services. At ICICI Group, he has handled many responsibilities including project
finance, corporate banking and international banking. He was associated with one of the first
batches of senior managers selected to lead the foray of ICICI Bank into the international
arena. He led ICICI Bank’s foray into the Middle-Eastern region and Africa.

Mr. B Ramakrishna - Executive Vice President: Ramakrishna joined ICICI

Prudential AMC in September 2004.Ramakrishna is a Chartered Accountant and has also done his
Cost Accountancy. He has around 23 years of rich experience across industries like FMCG and
banking & financial services. At ICICI Prudential AMC, Ramakrishna is the custodian of the
finance, compliance and technology functions. He plays an integral role in driving the key
profitability agenda through financial & corporate planning, budgetary control and corporate
finance.

Mr. Raghav Iyengar - Head - Retail & Institutional Business: Raghav joined
ICICI Prudential AMC in December 2006. Raghav is a Chartered Accountant and also has a degree
in Cost Accountancy. He has an overall work experience of around 16 years across the Banking
& Financial Service Industry. He was also associated with ICICI Prudential AMC from 1998 to
2000.At ICICI Prudential AMC, Raghav is responsible for driving the business objectives
through Retail sales and distribution, channel sales and institutional / corporate investors. His role
is of a key driver in strengthening distribution relationships and facilitating asset growth. He is
also responsible for identifying potential areas of expansion and facilitating business growth.
Raghav loves traveling and visiting new places. He loves reading books and enjoys playing tennis
with his son.

24
Mr. Kalyan Prasath - Head - Information Technology: Kalyan joined ICICI
Prudential AMC in June 2001. Kalyan holds a Diploma in Business Management from ICFAI and
Post Graduate Diploma in Systems Management from NIIT. He has 23 years of experience across
industries like IT, manufacturing and banking & financial services. At ICICI Prudential AMC, his
responsibilities include overseeing the overall technology function i.e., business application,
information security and IT infrastructure & projects thereby contributing to business excellence.

Mr. Hemant Agarwal - Head – Operations: Hemant joined ICICI Prudential AMC in
February 2007.Hemant has done his Chartered Accountancy. He has an overall work experience of
around 14 years across industries like information technology and banking & financial services. In his
role at ICICI Prudential AMC his responsibilities are building the operation and customer service
framework. The objective of this function is to evolve a service model that is scalable and ensures
process excellence.

Mr. Ashish Kakkar - Head - Human Resources & Administration: Ashish

joined ICICI Prudential AMC in June 2003. Ashish is a post graduate in human resources with
Masters in Labour Law. He has over 12 years of experience in human resources across industries like
pharmaceuticals, FMCG and the financial services. Ashish started his career with the Indian Navy,
after graduating from the Naval Academy with top honours. At ICICI Prudential AMC, he heads the
human resources and administration function. The key aspects of his function are to build people’s
capabilities to meet business objectives, and to leverage technology to ensure administrative processes
are efficient.

Mr. Aashish Somaiya - Head – Retail Business: Aashish began his career at ICICI
Prudential AMC in 2000 and was a part of the organization till April 2007. After a brief stint away, he
re-joined ICICI Prudential AMC in October 2008. A Chemical Engineer, he holds a Masters in
Management Studies with specialization in Finance from NMIMS Mumbai. He has overall work
experience of over 10 years across the Banking & Financial Services Industry. He is also a certified
trainer. In his role at ICICI Prudential AMC, Aashish is responsible for driving the business objectives
in retail business through a mix of distribution channels that are deployed to reach out to investors.
The retail sales and distribution team are an integrated unit of business delivery (sales and service),
primarily addressing distributors and through them individual investors’ needs. Additionally, Aashish
is also responsible for the Product Development and Communication function which studies
investor’s requirements and provides the market with right kind of investment products and service
features.

Mr. Rahul Rai - Head – Real Estate Business ICICI Prudential Asset
Management Company Limited: Rahul joined ICICI Prudential AMC in Nov 2010. At
ICICI Prudential AMC, Rahul is responsible for anchoring the Real Estate Business and driving team
synergies. Rahul has an overall work experience of around 20 years. His expertise and core
competency has been in the in depth understanding of the real estate segment and evaluating and
investing in real estate projects. He has also managed one of the largest and first FDI transactions that
happened in the Indian real estate space in 2004. Rahul, is a Chartered Accountant, and has also
completed the Cost Accountancy and Intermediate level Company Secretary Course. Prior to ICICI
Prudential AMC, he has been associated with companies like Arthur Anderson Corporate Finance,
Ernst and Young Transaction Advisory Services, RSM Advisors Private Limited and till recently was
associated with Sun Apollo Real Estate Advisors.

25
FUND MANAGEMENT

Mr. S. Naren - Chief Investment Officer – Equity: Naren joined ICICI Prudential AMC in
October 2004. At ICICI Prudential AMC, Naren oversees the equity investments across the
Mutual Fund, Portfolio Management Services (PMS) and International Advisory Business.
He is instrumental in overall equity investment strategy development. Naren has an overall
outstanding and rich experience of over 20 years in almost all spectrum of the financial
services industry ranging from investment banking, Fund Management, Equity Research, and
stock broking operations. His core competency lies in being involved in the entire gamut of
equity market space with extensive knowledge of Indian equities and the economy. After
obtaining a
B. Tech degree from IIT Chennai, Naren finished MBA in finance from IIM Kolkata and
worked with various financial services companies like Refco Sify Securities India Pt. Ltd.,
HDFC Securities Ltd. and Yoha Securities in various positions prior to joining ICICI
Prudential AMC.

Mr. Chaitanya Pande - Head – Fixed Income: Chaitanya joined ICICI Prudential AMC in
September 2002. Chaitanya currently manages thirteen funds viz. ICICI Prudential Flexible
Income Plan, ICICI Prudential Equity & Derivatives Fund, ICICI Prudential Blended Plan A,
ICICI Prudential Blended Plan B, ICICI Prudential Fixed Maturity Plans, ICICI Prudential
Interval Fund, ICICI Prudential Liquid Plan, ICICI Prudential Floating Rate Plan, ICICI
Prudential Long Term Floating Rate Plan, ICICI Prudential Short Term Plan, ICICI
Prudential Sweep Plan, ICICI Prudential Real Estate Securities Fund and ICICI Prudential
S.M.A.R.T. (Structure Methodology Aiming at Returns over Tenure) Fund. Chaitanya has an
overall work experience of around over 14 years. His core competency lies in credit analysis
and efficient portfolio management. His efficiency in fund management also won him the
title of India’s Most Astute Bond Investor by Asset Magazine for the year 2007. Chaitanya
holds an MBA from IMI Delhi. Prior to joining ICICI Prudential AMC he was with Jardine
Fleming AMC Pvt Ltd.

BOARD OF DIRECTORS: ASSET MANAGEMENT COMPANY

Mrs. Chanda Kochhar, MD & CEO – ICICI Bank: Ms. Chanda Kochhar is the Managing
Director and Chief Executive Officer of ICICIBank Limited. She began her career with ICICI
as a Management Trainee in 1984 and has thereon successfully risen through the ranks by
handling multidimensional assignments and heading all the major functions in the Bank at
various points in time. In 1993 when ICICI decided to enter commercial banking, she was
deputed to ICICI Bank as a part of the core team to set up the bank. When ICICI set up the
Infrastructure Industry Group in 1996 to create dedicated industry expertise in the areas of
Power, Telecom and Transportation sector, she was handpicked and made in charge of the
Infrastructure Industry Group. Further in 1998, when ICICI created the” Major Client Group
“to handle the relationships with the top 200 clients of ICICI, she was promoted as General
Manager and was made the head of the Major Clients Group. In the year 1999 she
simultaneously started handling the strategy
and E-commerce divisions of ICICI. In July 2000, she was chosen to head the Retail finance
division of ICICI and has been
26
 instrumental in scaling up the business. In April 2001, she was promoted as an Executive
Director, heading the retail business in the Bank. Having joined it during its nascent stage,
her strategic thinking and skills to convert challenges into opportunities ensured that within a
short span of around 5 years ICICI Bank emerged as the largest retail financer in India. In
the process of transforming a small bank into the largest private sector bank in the country,
within a decade of its inception, the various steps taken by her also shaped the retail finance
industry in India. In April 2006, she was appointed as the Deputy Managing Director with
responsibility for both Corporate and Retail banking business of ICICI Bank and from
October 2006 to October 2007, she handled the International and Corporate businesses of
ICICI. Once again under her leadership, International banking was the fastest growing
businesses within the Bank aiming to cater to the cross-border needs of clients.

In October 2007, she was appointed as the Joint Managing Director & CFO. She was heading
the Corporate Centre, was the Chief Financial Officer (CFO) and was also the official
spokesperson for ICICI Bank. In addition to finance, planning and communications; her
responsibilities included the global treasury, principal investments & trading, risk
management and legal functions. She was also responsible for day-to-day guidance and
administrative matters relating to the compliance and internal audit functions.

Awards

Under the leadership of Ms. Kochhar ICICI Bank had won The Asian Banker - “Best Retail
Bank in India “award for five consecutive years from the year 2001 to 2005. As recognition
of her contribution to establish ICICI Bank as a leading player in the banking industry Ms.
Kochhar has also been:

□ Ranked 25th in the Fortune’s List of Most Powerful Women in Business, 2008

□ Featured in the list of 25 most powerful women leaders in Business Today, 2008

□ Selected as ‘Rising Star Award’ for Global Awards 2006 by Retail

Banker International

□ Awarded Business Woman of the Year 2005 by The Economic Times of India

□ Selected as Retail Banker of the Year 2004 (Asia-Pacific region) by The Asian
Banker from amongst prominent retail bankers in the Asia Pacific region

Education & Certifications

Born in Jodhpur, Rajasthan, she joined Jaihind College in Mumbai for a Bachelor’s Degree in
Arts and after graduating in 1982, completed her MBA and Cost Accountancy. She did her
Masters in Management Studies (Finance) from the Jamnalal Bajaj Institute of Management
Studies, Mumbai and topped her batch and received the Wockhardt Gold Medal for
Excellence

in Management Studies. In Cost Accountancy, she received the J. N. Bose Gold Medal for
highest marks in that year.
27
Mr. Barry Stowe: Barry Stowe is Chief Executive of Prudential Corporation Asia. He is
responsible for an extensive network of over 50 life insurance and fund management
operations spanning 13 diverse markets. With 450,000 dedicated staff and agents,
Prudential’s Asia business offers a wide range of savings, protection and investment products
tailored to meet the needs of local customers, in addition to consumer finance sector in
Vietnam. Prudential is Asia’s leading Europe-based life insurer, with over £34.3 billion in
assets under management (as of 30 June 2008), and is also a major player in Asia’s fund
management sector.

Prior to joining Prudential in October 2006, Barry was President of Accident & Health
Worldwide for AIG Life Companies, overseeing more than 100 operations across six
continents. Under his leadership, AIG became the global market leader in Accident & Health
insurance, leveraging rapidly-evolving dynamics between consumers, governments and the
medical industry to maintain a vigorous CAGR of 24%. Barry was also pivotal in building
the Accident
& Health unit into one of AIG’s most profitable businesses, accounting for over 30% of AIG
Life Companies’ total earnings by 2005.

Barry has considerable experience in Asia, having spent three years as the Regional Head for
AIG Accident & Health in Southeast Asia before his appointment to the Hong Kong-based
role of President, Accident & Health Worldwide.

In addition to his eleven years with AIG, Barry’s career in the insurance industry includes his
tenure as President & CEO of Nisus, a subsidiary of the Pan American Life Insurance
Company, and several leadership positions at Willis Corroon, a global risk management and
insurance brokerage based in the U.S.

Mr. Suresh Kumar: Academic Career: Mr. Suresh Kumar graduated from the Sydenham
College of Commerce & Economics of the University of Bombay with a Bachelor of
Commerce (Honours) degree in 1971. He completed a post-graduate investment management
programme conducted jointly by the Stanford University and the London School of Business.
He also completed an Advanced Management Programme at the Columbia Business School.

Achievements/Eminent Positions held:

□ Senior treasury and general management positions in a Government of Dubai project.

□ Management positions in the banking sector in India, in the U. K. and in the

(West Coast) U.S.

□ Member of the senior Management of Emirates Bank Group since 1989.

□ Member on the Board of a number of offshore private equity firms.

28
 □ More recently, he has assumed the role of a Chief Mentor and Group Director in
Emirates NBD; with responsibilities for a number of organic and inorganic
initiatives.

□ Recipient of the Rotary International Scholarship (1977) tenable in California

(U.S.A.)

□ Recipient of Lord Aldington Banking Fellowship (1978)

□ Fellow of the Indian Institute of Bankers

□ Member of the regional Chief Executive Forum of the Institute of

International Finance (IIF), Washington D.C.

Directorships in other Companies:

□ Independent Director on the Board of ICICI International Ltd

□ Chairman of the Board of Fed bank Financial Services Ltd.

□ Non-executive director on the Board of Federal Bank Ltd.

□ Chief Executive Officer of Emirates NBD Capital Ltd (DIFC) and Emirates Financial
Services (EFS) PSC.

Mr. Vijay Thacker: Mr. Thacker is the Managing Partner of V. P. Thacker & Co. Mr.
Vijay Thacker is a Chartered Accountant and Cost Accountant and has been in professional
practice for over 22 years. He is a Fellow of the Institute of Chartered Accountants of India.

Mr. Thacker’s professional skills and experience cover diverse facets including Audit and
assurance, Business consulting, Corporate Law and taxation, Hotel and tourism consulting,
Franchise consulting and Consulting for Family and Owner managed businesses. He is also a
speaker and paper writer at international and domestic conferences.

Mr. Dileep C. Choksi: Mr. Dileep C. Choksi a Chartered Accountant by profession has
over 35 years of experience. His areas of specialization include tax planning and structuring
for domestic and international clients, including expatriates, finalizing collaborations and
joint ventures, corporate restructuring and analysing tax impact of various instruments. He
has advised some of India’s largest business houses on mergers and acquisitions and
multinational companies on cross border structuring and acquisition.

Mr. Choksi has contributed various papers on mergers and acquisitions, valuation of business
enterprises, company law, corporate governance and taxation. He has assisted in the
preparation of the prominent book “Kanga and Palkhiwala - The Law and Practice of income
Tax” Eight Edition by late Mr. N. A. Palkhiwala and Mr. B.A. Palkhivala.

29
He has been an ex-visiting faculty member of the Jamnalal Bajaj Institute of Management
Studies, Bankers Training College, and Reserve Bank of India. He was earlier on the
Taxation Committee of the Indian Merchant Chambers.

Mr. Choksi is on the Board of several leading companies including ICICI Lombard General
Insurance Company Limited, ICICI Prudential Asset Management Company Limited,
NSE.IT Limited, and State Bank of India. He was also on the Advisory Board of foreign
banks as well as Ex-Chairman of Banque National De Paris, Mumbai.

Mr. N.S. Kannan: Mr. N.S. Kannan is the Executive Director and Chief Financial
Officer of ICICI Bank. In addition to Finance, Taxation and Communications, his
responsibilities include Compliance, Internal Audit, Corporate Legal and Global Treasury
operations. Prior to the current assignment, Mr. Kannan was the Executive Director of ICICI
Prudential Life Insurance Company. He looked after the Corporate Centre including the
Finance and accounts functions, Investor/analyst relations, Investment Management,
Corporate Strategy, Corporate Communications, Human Resources and Business
Intelligence. Prior to shifting to ICICI Prudential, Mr. Kannan was the Chief Financial
Officer and Treasurer of ICICI Bank.

Mr. Kannan has been with the ICICI group for over 18 years. He joined the ICICI group in
1991 as a project officer. During his tenure at ICICI group, he has handled project finance
operations, infrastructure financing, structured finance and treasury operations. Mr. Kannan is
a postgraduate in management from the Indian Institute of Management, Bangalore with a
gold medal for best all-round performance. He is also a Chartered Financial Analyst from the
Institute of Chartered Financial Analysts of India and an Honours graduate in Mechanical
Engineering.

Mr. C. R. Muralidharan: Mr. C. R. Muralidharan was a Whole-Time Member of

Insurance Regulatory and Development Authority, Hyderabad (IRDA) and was looking after
the compliance by the insurers of the regulations on investments, analysis of financial
statements of insurance companies, on and off-site supervision of insurance companies as
well as other regulatory issues including the registration of new insurance companies.

Prior to joining IRDA, he worked in RBI for more than three decades in various capacities.
He was heading the Department of Banking Operations and Development (DBOD) of RBI,
which is responsible for laying down a regulatory framework on a wide range of operations
for Indian commercial banks to promote a sound and competitive banking system consistent
with the emerging international best practices. He assisted IMF in two overseas assignments
and was associated with several High-Level Working Groups on Banking Regulation.
Besides, he was also actively involved in the role of promotion of rural credit as well as in the
development of HR for the central bank.

Mr. Nimesh Shah: Profile explained earlier in the report.

30
FUTURE OUTLOOK AND OPERATIONS OF THE SCHEMES (for the
year ended march 31, 2012)

Investment Folios: The total number of live folios as at March 31, 2012 were 28.38 lakh.

Market Review FY12: Stock markets across the globe fell in 2011, and the domestic
indices were no exception. As investors appeared to be putting behind the memories of the
2008 financial crisis with an upturn, 2011 showed what volatility can do to one’s portfolio. A
series of global and domestic events together rocked the investor confidence and markets
over FY12.The year was ruled by a number of global factors ranging from the Euro-zone debt
crisis and major sovereign downgrades to signs of economic slowdown in the U.S. and China.
A worsening Euro crisis led to a ‘flight to safety’ as investors bought gold. Brent crude prices
remained high on account of supply concerns owing to geo-political tensions in Middle East
oil producing countries which added to the increased volatility in equity markets. As the year
progressed, strong household consumption and relatively healthier US banks led to a smart
recovery in US equities. During the financial year, global turmoil and disappointing domestic
economic data did not bode well for the Indian markets. Weak industrial output, slowing
economic growth, and higher inflation were the key concerns for the year. The ongoing
global economic turmoil coupled with rising interest rates back home impacted domestic
economic growth. The GDP data released indicated a continuous slowdown in the overall
economic growth for the year. Exports slowed down as demand weakened from European
and US markets, owing to the uncertainty prevailing in both the markets. As imports grew
faster, the trade deficit widened. The rupee declined against the US dollar owing to weak
local equities, weakness in the euro and dollar demand from banks and importers. The
headline inflation surged over 9% raising concerns, even as the central bank’s efforts to curb
rising prices did not achieve the expected efficacy. The Reserve Bank of India (RBI) hiked
rates seven times in calendar 2011, with key rates rising by 225 bps in total. In January and
March 2012 policy announcements, RBI cut Cash Reserve Ratio (CRR) by 75 and 50 bps
respectively, to ease liquidity which had become structurally very high and took a pause with
respect to repo rates indicating a change in its stance. Besides, the 2G spectrum-sale issue,
widespread perception of lack of progress in economic reforms, corporate governance
concerns, and disappointing corporate earnings did not help equities either.

During the year, rising inflation, continual hikes in interests’ rates (in calendar 2011),
liquidity crunch and huge government borrowing had a negative impact on government bond
prices. The economic slowdown, however, raised hopes of a pause in rate-hikes by the RBI
towards the end of the financial year, which in turn pushed up bond prices. The surge in
yields was steeper at the shorter-end of the yield curve, primarily on account of the liquidity
crunch that the markets witnessed from time to time during the year, thereby putting pressure
on shorter duration bonds.

31
Operations of the Schemes

1. Average Assets under Management (AAUM)

The AAUM of the Mutual Fund for the quarter ended March 31, 2012 stood at Rs. 68,816.49
crore, while for the quarter ended March 31, 2011; the AAUM of the Mutual Fund was Rs.
73,551.95 crore. As of March 31, 2012, the Fund comprised 43 open-ended schemes, 2
exchange traded funds, 17 interval fund plans, 2 fund of funds schemes (of which one has
five sub-plans) and 93 plans under close ended schemes. During the year under review the
Fund launched one fund of funds scheme; one open ended debt scheme, and 71 plans under
close ended debt schemes.

2. Operations and Consumer Service

With a view to rendering timely and efficient customer service, the Investment Manager of
the Fund, viz., ICICI Prudential Asset Management Company Ltd. (“the AMC”) has been
effectively leveraging on its 126 branches, including 36 functioning as official points of
acceptance of transactions, effectively servicing the large client base. Additionally, a
dedicated contact centre has been effective in providing investor support and redressing their
grievances. The AMC’s focus has been on technological innovation for facilitating investors’
convenience.

Scheme-wise commentary

ICICI Prudential Focused Blue-chip Equity Fund

ICICI Prudential Focused Blue-chip Equity Fund is an open-ended equity scheme that seeks
to generate long-term capital appreciation to unitholders from a portfolio that is invested
predominantly in equity and equity-related 5 securities of about 25-30 large-cap companies
and the balance in debt securities, money market instruments, and cash.

The scheme posted a return of -3.66% in FY12, better than the -9.23% posted by the
benchmark S&P CNX Nifty Index. The AAUM of the scheme during the last quarter of
FY12 was Rs. 3,805.27 crore.

ICICI Prudential Tax Plan

ICICI Prudential Tax Plan is an open-ended Equity Linked Savings Scheme (ELSS). The
scheme posted a return of -3.61% in FY12, better than the -8.75% posted by the benchmark
S&P CNX 500. The AAUM of the scheme during the last quarter of FY12 was Rs. 1,278.42
crore.

ICICI Prudential Infrastructure Fund

ICICI Prudential Infrastructure Fund is a thematic fund encompassing infrastructure. It is an

open-ended equity scheme that seeks to generate capital appreciation and income distribution
to unit holders by investing predominantly in equity or equity-related securities of the
companies

32
 belonging to the infrastructure development and balance in debt securities and money market
instruments. The scheme posted a return of -15.39% in FY12, better than the -18.45% posted
by the benchmark CNX Infrastructure Index. The AAUM of the scheme during the last
quarter of FY12 was Rs. 2,153.67 crore.

ICICI Prudential Banking & Financial Services Fund

ICICI Prudential Banking & Financial Services Fund is an open-ended sectoral scheme that
seeks to generate long-term capital appreciation to unit holders from a portfolio that is
invested predominantly in equity and equity related securities of companies engaged in
banking and financial services. The scheme posted a return of -10.54% in FY12, better than
the -11.64% posted by the benchmark BSE Banker. The AAUM of the scheme during the last
quarter of FY12 was Rs. 140.76 crore.

ICICI Prudential Technology Fund

ICICI Prudential Technology Fund is an open-ended Technology sector-oriented fund. The

scheme posted a return of -2.52% in FY12, better than the -7.12% posted by the benchmark
BSE IT Index. The AAUM of the scheme during the last quarter of FY12 was Rs. 104.56
crore.

ICICI Prudential FMCG Fund

ICICI Prudential FMCG Fund is an open-ended FMCG sector-oriented fund. The scheme
posted a return of 30.98% in FY12, better than the 24.35% posted by the benchmark S&P
CNX FMCG Index. The AAUM of the scheme during the last quarter of FY12 was Rs.
130.06 crore.

33
4.2 RELIANCE MUTUAL FUND

Reliance Mutual Fund ('RMF'/ 'Mutual Fund') is one of India’s leading Mutual Funds, with
Average Assets Under Management (AAUM) of Rs. 80,694 Crores and an invest tor count of
over 63.17 and 69.37 Lakh folios. (An AUM and investor count as of Apr - June '12)

Reliance Mutual Fund, a part of the Reliance Group, is one of the fastest growing mutual
funds in India. RMF offers investors a well-rounded portfolio of products to meet varying
investor requirements and has presence in 179 cities across the country. Reliance Mutua l
Fund constantly endeavours to launch innovative products and customer service initiatives to
increase value to investors. Reliance Capital Asset Management Limited (‘RCAM’) is the
asset manager of Reliance Mutual Fund. RCAM a subsidiary of Reliance Capital Limited,
which holds 92.93% of the paid-up capital of RCAM, the balance paid up capital being held
by minority shareholders.

Reliance Capital Ltd. is one of India’s leading and fastest growing private sector financial
services companies, and ranks among the top 3 private sectors financial services and banking
companies, in terms of net worth. Reliance Capital Ltd. has interests in asset management,
life and general insurance, private equity and proprietary investments, stock broking and
other financial services.

Sponsor: Reliance Capital Limited

Trustee: Reliance Capital Trustee Co. Limited

Investment Manager / AMC: Reliance Capital Asset Management Limited

Statutory Details: The sponsor, the Trustee and the Investment incorporation Manager
are rated under the Companies Act 1956

34
VISION AND MISSION STATEMENTS

VISION STATEMENT

To be a globally respected wealth creator with an emphasis on customer care and a culture of
good corporate governance.

MISSION STATEMENT

To create and nurture a world-class, high performance environment aimed at delighting our
customers.

CORPORATE GOVERNANCE

Corporate Governance Policy:

Reliance Capital Asset Management Limited has a vision of being a leading player in the
mutual fund business and has achieved significant success and visibility in the market.

However, an imperative part of growth and visibility is adherence to good conduct in the
marketplace. At Reliance Capital Asset Management Limited, the implementation and
observance of ethical processes and policies has helped us in standing up to the scrutiny of
our domestic and international investors.

Management:

The management at Reliance Capital Asset Management Limited is committed to good

corporate governance, which includes transparency and timely dissemination of information
to its investors and unit holders. The Board of Directors of RCAM is a professional body
constituting inter-alia of, well-experienced and knowledgeable independent members.
Regular audit committee meetings are conducted to review the operations and performance of
the company.

Employees:

Reliance Capital Asset Management Limited has at present, a code of conduct for all its
officers. It has a clearly defined prohibition on insider trading policy and regulations. The
management believes in the principles of propriety and utmost care is taken while handling
public money, making proper and adequate disclosures. All personnel at RCAM are made
aware of their rights, obligations and duties as part of the Dealing Policy laid down in terms
of SEBI guidelines. They are taken through a well-designed HR program, conducted to
impart work ethics, the Code of Conduct, information security, Internet and e-mail usage and
a host of other issues. One of the core objectives of RCAM is to identify issues considered
sensitive by global corporate standards, and implement policies/guidelines in conformity with
the best practices as an ongoing process. RCAM gives top priority to compliance in true letter
and spirit, fully understanding its fiduciary responsibilities.

35
MANAGEMENT TEAM

Sundeep Sikka: is CEO of RCAM. He has been instrumental in expanding RCAM's

footprints in both domestic & international territories. Sundeep has been with RCAM since
November 2003 and has more than 13 years of leadership experience with NBFCs and
Banks. Sundeep brings a proven track record of success and a broad understanding of the
company's business. Prior to RCAM, Sundeep has held a number of other senior management
positions and his last stint was with ICICI Bank.

Himanshu Vyapak: Is Deputy CEO with Reliance Capital Asset Management (RCAM)
from Oct 2003 onwards and brings in over 14 years of rich experience in sales & distribution
of financial services. He has been instrumental in expanding RCAM’s footprints in both
domestic
& international territories. Apart from Reliance Mutual Fund, He was also involved with key
businesses across Reliance Capital group like Credit Cards & Unsecured Loans. Prior to
Reliance Capital he was with ICICI bank and Escorts Finance across liability and asset
verticals. Himanshu is a Fellow of Insurance from Indian Institute of Insurance, a Certified
Financial Planner, a gold medallist in MBA and a Graduate in Economics (Hons) from Delhi
University. Under his leadership, RCAM has earned accolades from Customers, Partners and
Independent professional research entities representing domestic and international
geographies. Some of the recent recognition include:

□ Best Sales Team - Stevie Award 2008

□ National Sales Team of the year - Stevie Award 2009

□ Best National Sales Head of the Year - Wealth Forum Award 2010

□ Best Distributor Training Team from Wealth Forum Platinum Circle 2010

□ Top 3 in Customer Service from Wealth Forum Platinum Circle 2010

Sunil B. Singhania: is Head of Equity Investments at Reliance Mutual Fund. Sunil

graduated in commerce from the Bombay University and completed his Chartered
Accountancy from the ICAI, Delhi with an all-India rank. He has also earned the right to use
the Chartered Financial
Analyst designation, conferred by CFA Institute, USA. Sunil has a total experience of over
20 years. He has additionally completed the Certification course for Derivatives conducted by
the Bombay Stock Exchange securing an incredible 96% marks. Before his association with
Reliance Mutual Fund, Sunil gained considerable experience
on the sell side in Indian equity markets. He was the President of Motisons Securities Private
Limited, a broking firm that he was instrumental in setting up. Later he was a Director-
Research and Institutional Sales at Advani Share Brokers Private Limited, a full-service
broking outfit specializing in Indian equity and catering to local and global fund houses. Sunil
was the Promoter of The Association of NSE

36
Members of India; a body of stock brokers. He also sits on the Standards & Practice Council
of the CFA Institute, USA, the first and only member so far based in India to do so. Sunil is
presently the Founder President of the Indian Association of Investment Professionals, the
CFA India society. Having travelled extensively across the world, Sunil has attended many
global investment conferences and seminars.

Amitabh Mohanty: Head Fixed Income has been with Reliance Capital Asset
Management Ltd., in his current assignment, for over Six years. He is a Fixed Income
Portfolio Manager with over 16 years of experience. Prior to his current assignment, he had a
six-year stint with Alliance Capital Asset Management Ltd. as Vice President, in charge of
fixed income assets. He started his career in SBI Funds Management Ltd. where he was
Deputy Manager responsible for managing fixed income schemes. He is a management
graduate from Indian Institute of Management, Ahmedabad from the 1996 batch and holds an
electrical engineering degree from the IIT, Roorkee.

BOARD OF DIRECTORS

Kanu Doshi: Mr. Kanu H Doshi, 72 years, a B. Com, B A, FCA (Chartered Accountant), is
a fellow member of Institute of Chartered Accountants of India. He is also the Dean –
Finance, at Welingkar Institute of Management, Mumbai, where he teaches Corporate Tax
Planning and Financial Management for Master’s Degree of Mumbai University in
Management. He regularly contributes articles to leading journals and periodicals, including
leading websites like moneycontrol.com. He is co-author of “Tax Holidays”, “Financial
Accounting”, and “Treatise on Special Economic Zones”. Mr. Doshi is a Director on the
Boards of leading companies like Reliance Capital Asset Management Limited, Motilal
Oswal AMC Ltd, Edelweiss Capital Asset Management Limited.

S.C. Tripathi: Mr. S C Tripathi 63 years, is a M.Sc. (Physics – Spl. Electronics), LL B,

Postgraduate Diploma in Development Studies (Cantab), AIMA Diploma in Management. He
has varied experience at State, Central Govt. & International level in Public Finances,
Industrial & Communal Finance & Banking. Few of the vital positions held by him, includes:

□ Managing Director, Industrial & Investment Corporation of U.P. (PICUP)

□ Minister (Economy & Commerce), Embassy of India, Tokyo

□ Secretary, Heavy Industries, & Department of Taxation & Institutional

Finance, Government of UP

□ Commissioner, Agra Division

37
 □ Principal Secretary to various departments in Government of UP like
Industrial Development, Governor and Finance.

□ Adviser (Industry & Finance), Government of UP

□ Additional Secretary, Ministry of Mines, Govt. of India.

□ Chairman and Managing Director of Bharat Aluminium Co. (BALCO) and National
Aluminium Co. (NALCO)

□ Secretary Education, Ministry of Human Resource Development, Government

of India

□ Secretary, Ministry of Petroleum and Natural Gas, Government of India.

He is a Fellow Member of Institute of Electronics & Telecom Engineers, India and Energy
Institute, U.K. He is also a Life Member of Indian Institute of Public Administration and
Professional Member of All India Management Association and Member of Computer
Society of India.
Presently, he is Chairman of National Institute of Technology, Calicut and Chairman of
Energy Institute, India and hold directorships in several limited companies.

Manu Chadha: Mr. Manu Chadha 54 years, a B. Com, LL B, FCA (Chartered

Accountant) is a practicing Chartered Accountant and a Senior Partner in M/s T R Chadha &
Co., Chartered Accountants. He has vast experience of more than 30 years in Auditing,
Financial and Management Consultancy with a specialization in corporate advisory services,
project financing / governance, Corporate Laws and Management Consultancy having
expertise in the areas of Consultancy to foreign companies and Joint Ventures including work
relating to FEMA matters, RBI and FIPB. He had also served as Vice Chairman of Northern
India Regional Council of
Institute of Chartered Accountants of India for two years. He has served on the Boards of
Punjab National Bank, National Insurance Co. Ltd., Dena Bank, SBI Mutual Fund, Canfin
Homes Ltd., PNB Housing Finance Ltd., etc. Earlier he was on the Censor Board, Mumbai,
appointed by the Information and Broadcasting Ministry and on the Direct Tax Advisory
Committee, appointed by the Ministry of Finance, Government of India. He is currently on
the board of GIC Housing Finance Ltd., SBI Pension Funds Pt. Ltd. and other companies. He
has recently been nominated to Investor Education and Protection Fund by the Ministry of
Corporate Affairs, Government of India.

Soumen Ghosh: Mr. Soumen Ghosh, 50 years, a B.Sc. (Hons) Mechanical Engineering
from University of London. ACA – Institute of Chartered Accountants England & Wales, is a
Group Chief Executive Officer of Reliance Capital Ltd., the financial services company of
the Reliance Anil Dhirubhai Ambani Group since 1st April 2008. Prior to joining the ADAG

38
Group, he was Regional CEO of Middle East and India Sub Continent (MENA) for Allianz
SE looking after Life and Non-life Insurance business in countries from Egypt, GCC
countries to Bangladesh. He had stints as a CEO & Country Manager of Bajaj Allianz Life
Insurance Company; Bajaj Allianz General Insurance Company; and Allianz Operation’s in
India. Prior to that he was involved in setting up operations for Allianz in South East Asia.
He spent 10 years in Australia in various capacities with Allianz from CFO to Managing
subsidiary companies as well as operations in the Pacific Rim. Mr. Ghosh carries with him
enormous experience in the financial sector. He has held key positions in some of the most
reputed financial organizations. This includes directorship at Allianz ROSNO Life (Russia),
Allianz Takaful Bahrain Ltd. (Bahrain), Allianz Insurance Co. Egypt Ltd. (Egypt), Bajaj
Allianz Life Insurance co. Ltd (India); to name a few. His professional footprint has taken
him to several countries across the globe.

FUTURE OUTLOOK

The Indian Mutual Fund industry is one of the fastest growing industries in the financial
services sector with 44 AMCs currently operating in the country. The industry AAUM has
grown at a CAGR of 25% since 1965 and at a CAGR of 10% in the last three years, with 6,
64,824 crores of average assets as on March 31, 2012.

Your Company intends to aggressively pursue growth opportunities in the mutual fund
industry both domestic and international and therefore be the most preferred investment
choice for investors. Your Company expects that an emerging market like India would
experience a sustained higher growth rate. Given the country's high household savings rate
along with the current low levels of investments by retail investors where only less than 3%
of the household savings is channelled into capital markets, your Company believes that the
Mutual Fund Industry is still in a nascent stage and has a huge opportunity for growth and
expansion. Being one of the large players in the Industry, your Company will continue
investing in growing the market size, achieving product innovation, educating the investors,
increasing the distribution reach, enhancing customer service infrastructure with aggressive
expansion strategies.

39
4.3SBI MUTUAL FUND

CORPORATE PROFILE

With 25 years of rich experience in fund management, we at SBI Funds Management Pt. Ltd.
bring forward our expertise by consistently delivering value to our investors. We have a
strong and proud lineage that traces back to the State Bank of India (SBI) - India's largest
bank. We are a Joint Venture between SBI and AMUNDI (France), one of the world's leading
fund management companies.

With our network of over 222 points of acceptance across India, we deliver value and nurture
the trust of our vast and varied family of investors.

Excellence has no substitute. And to ensure excellence right from the first stage of product
development to the post-investment stage, we are ably guided by our philosophy of ‘growth
through innovation’ and our stable investment policies. This dedication is what helps our
customers achieve their financial objectives.

Vision

“To be the most preferred and the largest fund house for all asset classes, with a consistent
track record of excellent returns and best standards in customer service, product innovation,
technology and HR practices.”

Services
Mutual Funds

Investors are our priority. Our mission has been to establish Mutual Funds as a viable
investment option to the masses in the country. Working towards it, we developed innovative,
need-specific products and educated the investors about the added benefits of investing in
capital markets via Mutual Funds.

Today, we have been actively managing our investor's assets not only through our investment
expertise in domestic mutual funds, but also offshore funds and portfolio management
advisory services for institutional investors.

This makes us one of the largest investment management firms in India, managing
investment mandates of over 5.4 million investors.

40
Portfolio Management and Advisory Services

SBI Funds Management has emerged as one of the largest players in India advising various
financial institutions, pension funds, and local and international asset management
companies.

We have excelled by understanding our investor's requirements and terms of risk / return
expectations, based on which we suggest customized asset portfolio recommendations. We
also provide an integrated end-to-end customized asset management solution for institutions
in terms of advisory service, discretionary and non-discretionary portfolio management
services.

Offshore Funds

SBI Funds Management has been successfully managing and advising India's dedicated
offshore funds since 1988. SBI Funds Management was the 1st bank sponsored asset
management company fund to launch an offshore fund called 'SBI Resurgent India
Opportunities Fund' with an objective to provide our investors with opportunities for long-
term growth in capital, through well-researched investments in a diversified basket of stocks
of Indian Companies.

BOARD OF DIRECTORS- AMC

Mr. Pradip Chaudhuri, (Chairman & Associate Director): Qualifications: B.Sc. (Hons),
MBA. Mr. Pradip Chaudhuri joined State Bank of India as Probationary Officer in 1974. He
took over charge as Chairman of State Bank of India on 7th April, 2011. Immediately prior to
taking over as Chairman, Mr. Chaudhuri was Dy. Managing Director & Group Executive
(International Banking), Mumbai. During his illustrious career spanning 36 years in State
Bank of India, he held several important positions like Chief General Manager (Foreign
Offices) at Corporate Centre, Mumbai, Managing Director, State Bank of Saurashtra, Chief
General Manager, Chennai Circle etc.

Shri Jayesh Gandhi (Independent Director): Qualifications: B. Com, F.C.A. Shri Jayesh
Gandhi is a Chartered Accountant and Senior Partner from N.M. Raiji & Co. Chartered
Accountants, Mumbai. Since last 18 years Shri Gandhi has audit assignments of various
companies like ICICI Group including ICICI Bank Ltd., Wipro Group, Tata Finance Ltd.,
Tata Tea Ltd., Tata Chemicals Ltd. and Prism Cement Ltd. He also handles various other
assignments in the audit of mutual funds. He is also a director on the Board of various
companies.

Mr. Deepak Kumar Chatterjee (Managing Director): Qualifications: M.Sc., MBA. Mr.
Deepak Kumar Chatterjee brings with him experience of over 32 years in State Bank of India
in various areas such as Credit Administration, Investment Banking, International Banking
Operations and Branch Management. In his previous assignment, Mr. Chatterjee was General
Manger (Financial Institutions Group), International Business Group in SBI where he was
handling fund raising for SBI outside India, Country Risk and Bank exposures.

41
Dr. H. Sadhak (Independent Director): Qualifications: MA (Eco), Ph.D. (Industrial
Finance) & Diploma in Operation Research for Management (DORM). Dr. Sadhak has more
than 30 years of experience in Financial Services Industry including Pension Funds, Mutual
Funds, Life Insurance and Banking. At present, he is an advisor in Price Waterhouse Coopers
(PwC) providing advice for financial services, especially Pension & Insurance practices.

He has also served on various Committees & Working Groups as a Technical Expert. He has
published more about 200 articles/Research Papers. He has also received many National level
awards/prizes. He has also attended several Seminar and Conference in India and abroad
mostly as a speaker. He is also on the Board of the Arch Pharma labs Ltd. (Independent
Director), Clearing Corporation of India Ltd. (Nominee Director of LIC of India) & Corp
Bank Securities Ltd. (Independent Director).

Mrs. Madhu Dubhashi (Independent Director): Qualifications: B. Com (Delhi University),

PGDBM (IIM, Ahmedabad). Mrs. Dubhashi is a graduate with Economics (Honours) from
Miranda House, Delhi University (1968-71) and a post graduate in Business Administration from
the Indian Institute of Management, Ahmedabad (1971-73). She has been associated with the
capital market for over 37 years with an experience including assessment of viability of projects,
post sanction follows ups for ICICI Bank Limited, managing of IPOs and FOOs during her tenure
with Standard Chartered Bank, Investment banking division. She has also been instrumental in
the setup of a data centre and facilities for financial analysis of companies rated by CRISIL in her
capacity as Head of Global Data Services of India, a subsidiary of CRISIL.

She is presently working with INNOVEN Business Consultancy as Managing Partner. She
has addressed several seminars, written seminal papers on Non-Voting Shares and perils and
dangers of permitting “Buy-Back of Shares” by the Indian corporate and contributed a
number of articles to various reputed business journals.

Dr. H. K. Pradhan (Independent Director): Qualifications: M.A. M Phil, Ph D Post Doc.

Columbia University. Dr. H.K. Pradhan is a Professor of Finance & Economics at XLRI
Jamshedpur. Dr. Pradhan has experience of over 23 years in teaching & research etc. He has
handled various international assignments including two years as Regional Advisor,
Commonwealth Secretarial Regional Advisor, Pacific Islands & Fiji Islands’. He has
presented several research papers in international conferences held in US, Europe, Asia,
Africa and Pacific countries related to Securities and Capital Market. He has also been
Member, Board of Governors, XLRI Jamshedpur (2003 -2005). Dr. Pradhan is associated
with National Commodity Derivative Exchange (NCDEX) since 2008 as Member, Index &
Option Committee.

Shri Shyamal Acharya (Associate Director): Qualifications: B. Com, ICWA. Mr. Shyamal
Acharya has an experience of over 34 years in State Bank of India (SBI). Recently, he took over
as Deputy Managing Director & Group Executive (Associates & Subsidiaries) of SBI i.e., July
01, 2011. Prior to this, Mr. Acharya was heading the Mid – Corporate Group of the SBI.

42
Assignments held during last 10 years in SBI includes Chief General Manager, Mumbai
Circle, Chief General manager, Rural Business, General Manager, Network II, Hyderabad,
General Manager, Mid Corporate SBU, Mumbai.

Mr. Shishir Joshipura (Independent Director): Qualifications: BE Mechanical from BITS,

Pilani and Advance Management Programme (AMP) from Harvard Business School. Mr.
Shishir Joshipura is the Managing Director of SKF India Limited since December 2009 and
also the Country Manager for the region which includes the group’s business of SKF
Technologies Private Limited and Lincoln Helios India Limited. He began his illustrious
career of 26 years in Thermax as a trainee engineer and served in different capacities with the
organization. He was appointed as Chief Executive Officer of Thermax Energy Performance
Services Limited in 1999. Mr. Shishir Joshipura has deep knowledge in the field of Energy
Efficiency, Renewable Energy and Carbon Intensity Reduction. Mr. Joshipura is also a
Director on the board of Lincoln Helios India Limited, Thermax Sustainability Energy
Solutions Limited, Alliance for an Energy Efficient Economy (non-profit making
organization).

He has also been awarded as UDYOG RATTAN from Institute of Economic Studies - 2011.

Mr. Thierry Raymond Mequillet (Associate Director): Qualifications: EM Lyon Masters

in Management, Member of Hong Kong Securities Institute. Mr. Thierry Mequillet is a Chief
Executive Officer of Amundi Hong Kong Limited, North Asia since January 1999. Prior to
that, Mr. Mequillet was Chief Operating Officer of Indosuez Asset Management Hong Kong
Limited. He has over 30 years of professional experience in Banking and Asset Management
internationally and held various position viz.: Regional General Manager – Finance &
Operations, Indosuez Asset Management Asia Limited, Hong Kong; Financial Controller,
Indosuez Paris; Deputy General Manager, Indosuez Singapore.

Mr. Mequillet is also a Director on the board of various companies viz., Amundi HK Limited,
Indosuez Asset Nominees Limited, Amundi India Holding, ABC – CA, Alliance Francoise de
Hong Kong.

Mr. Fathi Jerfel (Associate Director): Qualifications: Engineering degree from Ecole Poly-
technique, Engineering degree from the Institute Français du Petrole & Post graduate degree
in Economics (Petroleum Management) from the University of Dijon. Mr. Fathi Jerfel is
Deputy Chief Executive Officer of Amundi SA in charge of investment solutions for Retail
Network Division. After a start at Credit Lyonnais as Head of Financial Engineering and
Fixed Income (1986-2001), he joined Crédit Agricole Asset Management in 2002 as
Head of Derivatives Arbitrage & Cumulative Research. In 2005, Mr. Jerfel was appointed as
Chief Executive Officer of Crédit Agricole Structured Asset Management. Some of the
positions he held are: Director, Amundi; Director, Society General Gestion; Chairman,
Amundi Hellas MFMCSA (Exemporiki Asset Management MFCM); Chairman, Amundi
SGR S.P.A.

43
Mr. Philippe Batchevitch (Alternate Director to Mr. Jerfel): Qualifications: SKEMA
School of Management, Lille, France & Harvard Business School AMP. Mr. Philippe
Batchevitch has been deputed from Amundi Group as Deputy Chief Executive Officer of SBI
Funds Management Private Limited w.e.f July 20, 2011. After his first venture in New York,
he moved subsequently to BFCE (French Exim Bank) in 1988 as a currency option dealer,
then Bank Indosuez in 1991 where he assumed different Capital Market positions in Paris,
Riyadh, Singapore, Tokyo and Istanbul. In 2003, he took the CEO role at NHCA Asset
Management, joint venture set up in partnership with NH, one of the leading banking
networks in South Korea. In 2007, Philippe joined Caam Ai Inc. Chicago as Country Head.
Before moving to SBIFMPL, he has actively participated in the integration of international
joint-ventures and partnerships on behalf of Amundi Asset Management.

MANAGEMENT TEAM
Mr. Deepak Kumar Chatterjee: profile discussed earlier in

report Mr. Philippe Batchevitch: profile discussed earlier in

report

Mr. K. T. Ravindran: Chief Operating Officer, Mr. Ravindran, General Manager, State
Bank of India (SBI), has over 30 years of experience in various areas at SBI such as Credit
Administration, Monitoring Asset Quality, International Banking Operations, Retail Banking,
Branch Management, Internal Audit functions, Circle Balance Sheet and Compliance. Prior
to assuming the charge of Chief Operating Officer at SBI Funds Management Pt. Ltd, Mr.
Ravindran was Deputy General Manager (Credit) of SBI Chennai Circle.

Mr. Navneet Munot: Chief Investment Officer, Navneet joined SBI Funds Management
Private Limited as Chief Investment Officer in December 2008. He brings with him over 15
years of rich experience in Financial Markets. In his previous assignment, he was the
Executive Director & head - multi - strategy boutique with Morgan Stanley Investment
Management. Prior to joining Morgan Stanley Investment Management, he worked as the
Chief Investment Officer - Fixed Income and Hybrid Funds at Birla Sun Life Asset
Management Company Ltd. Several funds managed by Navneet got recognition for their
consistent superior risk-adjusted performance and won several awards from independent
agencies such as CRISIL-CNBC TV 18, ICRA, Reuters Lipper and got top ranking in Value
Research. Navneet had been associated with the financial services business of the group for
over 13 years and worked in various areas such as fixed income, equities and foreign
exchange. His articles on matters related to financial markets have widely been published.

Ms. Aparna Nirgude: Chief Risk Officer, Aparna has rich experience of over 17 years with
SBI Mutual Fund and has been heading the Risk function since 2005. Prior to this, she has
handled various responsibilities within Investment Management and Research. Before taking
charge as Chief Risk Officer, she headed the Research function in SBI Mutual Fund.

Aparna holds a degree in Management from the prestigious Jamnalal Bajaj Institute of
Management Studies.
44
Mr. R. S. Srinivas Jain: Chief Marketing Officer, Srinivas Jain has an experience of over 18
years in the Financial Services industry, with over 13 Years in Asset management companies
apart from Broking and Investment Advisory companies; he has been associate with SBI
Funds Management since 2001.

He is currently the Chief Marketing Officer at SBI Funds Management Pvt Ltd, a joint
venture between State Bank of India, the largest commercial bank in India and AMUNDI
Asset Management, (Paris). SBI Funds management today is a leading asset management
company in India managing with over 6 Million Investors.

Srinivas Jain took over as Chief Marketing officer in Feb 2005 prior to which he was
Regional head - South for SBI funds Management Pt. Ltd from 2001. Apart from many
recognitions the fund house has received, he was instrumental in SBI Mutual Fund being
awarded as the most preferred Mutual Fund for 2 years in a row from CNBC Awaaz. And the
brand has consistently been rated as the no. 1 brand in the mutual fund space by AC Neilsen
in the survey – ‘Winning Brands’ in terms of consumer preference – equity, saliency, ratios
and imagery. SBI Mutual fund was recently voted Gold by Readers Digest as Trusted Brand
2011 in the Investment Management Category.

He not only represents SBI Funds Management in various forum, but also is actively
involved in various initiatives in mutual fund industry. He guides and leads enthusiastic and
passionate team of 200+ bright professionals across the country and oversees business
development, distribution, product management and marketing & corporate communication
functions of the company. He is a Commerce Graduate from Bangalore University with a
Cost Accounting background.

Mr. Rakesh Kaushik: Sr. Vice President (Accounts & Administration), Mr. Kaushik has
over 26 years of experience with the State Bank group out of which 17 years is with SBI
Funds Management Private Limited in the areas of Finance, Audit, Taxation, Administration,
Operations, Customer Service and Compliance. Prior to joining SBI Funds Management
Private Limited, he worked with State Bank of India and State Bank of Patiala in the areas of
Retail Banking, Accounts, Foreign Exchange and Credit.

Mr. D.P. Singh: Head of Sales, Mr. D. P. Singh has experience of more than 20 years and is
associated with SBIFMPL since 1998. Mr. Singh was appointed as Head of Sales in 2008 and
is responsible for supervising the sales function of various SBIMF schemes and administering
the

Sales Offices across the country. Prior to this, he was designated as Zonal Head – North of
SBIFMPL.

Ms. Vinaya Datar: Company Secretary & Compliance Officer, Ms. Vinaya Datar has
overall experience of more than 15 years, including over 8 years in the field of financial
services. She has extensively worked in the areas of Compliance, Secretarial, and Legal. Prior
to this assignment, she was Assistant Vice President - Compliance with Mirae Asset Global

45
Investments (India) Pt. Ltd. Ms. Datar has also been previously associated with Reliance
Capital Asset Management Ltd, IL&FS Limited and UTI Infrastructure & Services Limited.

Mr. C. A. Santosh, Head - Customer Service: Mr. C. A. Santosh has joined SBI Funds
Management (P) Ltd as Chief Manager - Customer Service. He has over 12 years of
experience and started his career in the Aviation Industry (Customer Service) and later
moved on to Banking.

His last assignment was in the Kotak Mahindra Bank as Chief Manager - Customer Contact
Centre.

PERFORMANCE OVERVIEW
Performance of Equity
Schemes:

a) 67% of our equity assets under management are in top 2 quartiles on a one-year horizon

b) Most of our equity schemes outperformed their respective benchmarks by more than
200 basis points

c) SBI Magnum Emerging Business Fund continues its top decile performance.

Navneet is a postgraduate in accountancy and business statistics and a qualified Chartered

Accountant. He is also a charter holder of the CFA Institute USA and CAIA Institute USA.
He is also an FRM charter holder of Global Association of Risk professionals (GARP).

FUTURE OUTLOOK AND OPERATIONS OF THE SCHEMES (for the

year ended march 31, 2012)

EQUITY OUTLOOK: As the Murphy’s law says, “anything that can go wrong will go
wrong”. India was a classic example of this. Sticky inflation, depreciating currency and rising
interest rates coupled with policy inaction and execution failure led to a poor performance by
Indian capital markets during FY 2012. Corporate profitability took a major hit further
impacting asset creation. Political situation remained worrisome which put the whole policy
making in jeopardy. Headwinds from overseas markets, mostly fuelled by debt crisis in
Europe, were also the key triggers for the poor performance of stock markets in India.
Corporate profitability is likely to remain depressed in the near future given the higher input
costs, wages, interest rates, steep depreciation in currency and higher competitive intensity.
With a hazy outlook and depressed profitability, corporate India seems reluctant to commit
new capital locally. Most of the capex has been stalled, delayed or suspended. The situation
will certainly put to test Indian corporates’ wherewithal to navigate this challenging business
environment.

The economy cannot afford continuance of sticky inflation, rising interest rates and a weaker
46
currency. While demand is an addressable issue with marginal stretch from the policy side –
it

47
is the governance that needs to step-up its response to the glaring supply gap on most of the
input parameters. One can expect a tactical readjustment by polity to get the structural India
story back on track sooner. There exists a possibility of an outlier “blue-swan” of
synchronized occurrence of favourable events like – softened interest rates, global
commodities and reversal of the currency slide (they all have high interlinks).

In Today’s pain lies tomorrow’s gain. We expect this period to offer a good opportunity to
investors to participate in the long-term India story. In this scenario we prefer to focus on
bottom-up stock picking with core beliefs in terms of quality (business, management, and
cash flows), prudence (on cash utilization) and agility (in terms of timing and allocation). We
prefer to look for businesses with strong franchise value, large consumption compulsion
canvass opportunity and penetration potential. We also remain alert to opportunities that
provide tactical returns on Asset plays at attractive valuations and rate sensitive’s given
impending policy response. We recommend investors to maintain the discipline of asset
allocation and use the downturn in equity market as an opportunity to gradually build
exposure.

Operations of the schemes:

SBI Mutual Fund manages 28 open ended and 11 close ended schemes, out of which 17 are
equity schemes (2 close ended),1 balance scheme, 2 liquid schemes,1 gilt scheme,16 debt
schemes (9 close ended) and 1 Gold ETF scheme & 1 Gold Fund scheme. SBI Mutual Fund
continues to hold certain securities which were sold by it but these have not been got
transferred by the buyers in their names. These securities do not belong to SBIMF, but are
held on behalf of the unknown buyers and not as Owners/Investors. Such securities are
transferred to the buyers against claims after establishing the genuineness of the claim. The
market value of such securities as on 31st March 2012 is ` 14.89 crore

Scheme-wise commentary:

SBI Blue Chip Fund: has generated a return of (5.34%) (31st March 2011 to 31st March
2012) as compared to a return of (9.23%) for its benchmark (BSE100). The fund has
outperformed the benchmark due to its underweight on Financials, Materials, Industrials and
IT.

Magnum Tax Gain Scheme 1993: has performed very well and has outperformed the
benchmark index (BSE100). Most of our sectoral calls, in terms of being underweight
financials and overweight pharmaceuticals, cement, etc., have worked well for us. Even our
bottoms up stock picks have performed exceedingly well contributing meaningfully to the
performance of the Fund.

SBI Infrastructure Fund – Series I: has generated a performance of (16.61%) during the
period 31st March 2011 to 31st March 2012, as compared to a return of (9.23%) for its
benchmark (BSE100). The fund cannot invest in Healthcare and Consumer Staples, which
were the main drivers of performance of the BSE 200 during the fiscal year 2011/2012.

Magnum NRI – FAP: has generated a return of (2.92%) during the period 31st March 2011
48
to 31st March 2012, as compared to a return of (9.23%) for its benchmark (BSE100). The
fund

49
outperformed the benchmark through the execution of active asset allocation between equity
and cash to benefit from increased volatility in the market.

Magnum IT Fund: has generated a return of (3.15%) (31st March 2011 to 31st March 2012)
as compared to a return of (7.12%) for its benchmark (BSE IT Index). The outperformance
was driven by higher allocation to midcaps and prudent stock selection among large-caps.

Magnum FMCG Fund: has generated a return of 26.63% (31st March 2011 to 31st March
2012) as compared to a return of 24.94% for its benchmark. (BSEFMCG Index). The fund
has outperformed the benchmark due to overweight on VST Industries, TTK Prestige, Marico
and underweight on United Spirits and Dabur.

Magnum Index Fund has generated a return of (8.96%) (31st March 2011 to 31st March 2012)
as compared to a return of (9.23%) for its benchmark (S&P CNX Nifty). The Magnum Index
Fund does not take any view on the market, the objective being to replicate the performance
of its benchmark.

Magnum Pharma Fund: has generated a return of 9.66% (31st March 2011 to 31st March
2012) as compared to a return of 10.00% for its benchmark (BSE Healthcare Index). Though,
the fund benefited from positive active exposure in IPCA, Divis, Strides and from holding
Lupin, the fund underperformed the benchmark from being underweight Sun Pharma, GSK
Pharma and Ranbaxy.

SBI Arbitrage Opportunities Fund has generated a performance of 8.62% (31st March
2011 to 31st March 2012) as compared to a return of 8.45% for its benchmark (Crisil Liquid
Fund Index). With the advent of technology on the trading desks, arbitrage opportunities have
shrunk drastically over the last few years. Nevertheless, the fund is still delivering returns
better than Crisil Liquid Fund Index, its benchmark.

50
 CHAPTER 5
COMPARISION OF VARIOUS SCHEMES UNDER EQUITY

Further the ten set of comparisons stated below are taken as sample and explained in detail
as part of the study. Comparisons are named as comparison.1, comparison.2 up to
comparison 5 for convenience of presentation and ease of use.

COMPARISON 1
Scheme ICICI Pru Focused SBI Blue Chip Fund Reliance Equity
Blue-chip Equity (G) (G) Fund-RP(G)
Fund class Large cap Large cap Large cap
Fund Type Open ended Open ended Open ended
Ranking Rank 1 Rank3 Rank5
Scheme assets Rs in cr 3809.54 686.36 1056.83
(as on June 30,2012)
Inception date May 7, 2008 Jan 20, 2006 Mar 07, 2006
Bench mark S&P CNX NIFTY BSE 100 S&P CNX NIFTY
Minimum 5000 5000 5000
investment (in Rs.)
AMC Assets (in cr, 73049.66 47184.11 80694.47
as
on June 30,2012)
Latest NAV (Rs/unit) 16.50000 14.54000 13.25910
Performance

3 months 9.1% 11.8% 13.2%

6 months -3.5% 3.3% -2.0%
1 year 10.1% 12.5% 11.0%
Portfolio
Top 5 holdings HDFC bank, ITC, HDFC, HDFC Bank, Divis labs, Reliance,
Infosys, ICICI Bank, ICICI Bank, Infosys, ICICI Bank, Infosys,
Bajaj auto HCL Tech HCL Tech
Weightage to top 5 34.94% 27.86% 23.88%
holdings
Top 3 Sectors Banking/Finance, Banking/finance, Engineering,
Technology, oil and technology, automotive,
gas pharmaceuticals Pharmaceuticals
Weightage to top 3 50.48% 50.54% 35.79%
sectors

51
Management & fees
Fund manager Manish Gunwani Sohini Andani Omprakash kuckian
Entry load 0% 0% 0%
Exit load 1.00% 0% 1.00%
ANALYSIS: ICICI Prudential Focused Blue-chip Equity is ranked 1 in large cap
category by Crisil. It is advised as a strong buy with Latest NAV of 16.500 as on Aug 17,
2012 and if already invested then investment should be continued in this scheme.
Whereas SBI BlueChip fund is ranked 3 in this category and investors are advised to
switch to a better performance scheme at this stage as its NAV as on Aug 17, 2012 is
14.540 on the other hand
reliance equity fund is performing relatively weak and ranked 3 with NAV of 13.359
which is very less as compared to other two schemes

COMPARISON 2
Scheme ICICI Pru Tax Plan SBI Magnum Tax Gain Reliance Tax Saver
(ELSS)

Fund class ELSS ELSS ELSS

Fund Type Open Ended Open Ended Open Ended

Ranking Rank 1 Rank 3 Rank 2

Scheme assets Rs in 1295.14 4518.12 1969.84

cr (as on June
30,2012)

Inception date Aug 09, 1999 Mar 31, 1993 Aug 23, 2005

Bench mark S & P CNX 500 BSE 100 BSE 100

Minimum 500 500 500

investment (in Rs.)

AMC Assets (in cr, 73,049.66 47,184.11 80,694.47

as on June 30,2012)

Latest NAV 138.96000 60.80000 21.75220

(Rs/unit) As on Aug
17, 2012

52
Performance

3 months 9.5% 9.9% 7.3%

6 months -0.8% 1.8% 0.8%

1 year 9.9% 12.4% 11.9%

Portfolio

Top 5 holdings Reliance, Infosys, HDFC Bank, ICICI Eicher Motors, Maruti
Bharti Airtel, ICICI Bank, TCS, HDFC, Suzuki, Madras
Bank, Hind Zinc Grasim Cements, Bajaj
Finance, SBI

Weightage to top 5 32.1% 25.06% 25%

holdings

Top 3 Sectors Oil and gas, Banking/Finance, Engineering,

Banking/Finance, Technology, Automotive,
Technology Pharmaceuticals Banking/Finance

Weightage to top 3 51.36% 45.11% 51.54%

sectors

Management & fees

Fund manager Chintan Haria Jayesh Shroff Ashwani Kumar/Viral

Berawala

Entry load 0% 0% 0%

Exit load 0% 0% 0%

ANALYSIS: In ELSS category, there are various fund houses that offers scheme as it is very
attracting to customers, ICICI Pru tax plan is ranked 1 in this category by CRISIL as it has a
very good performance and recommended as a strong buy, whereas SBI is ranked 3 and is an
average performer here and reliance is ranked 2 and recommended to be kept but also with an
alert to keep a check on the performance due to its decreasing NAV

53
 COMPARISON 3
Scheme ICICI Pru SBI Infrastructure Fund Reliance Infrastructure
Infrastructure Fund Series I Fund

Fund class Thematic - Thematic – Thematic -

Infrastructure Infrastructure Infrastructure

Fund Type Open Ended Open Ended Open Ended

Ranking Rank 3 Rank 4 NOT RANKED

Scheme assets Rs
in 1864.49 649.80 633.01
cr (as on June
30,2012)

Inception date Aug 16, 2005 May 11, 2007 June 23, 2009

Bench mark BSE 100 BSE 100 BSE 100

Minimum 5000 5000 5000

investment (in Rs.)

AMC Assets (in cr, 73,049.66 47,184.11 80,694.47

as on June 30,2012)

Latest NAV 25.11000 7.65000 6.67810

(Rs/unit) As on Aug
17, 2012

54
Performance

3 months 9.9% 11.5% 3.5%

6 months -9.1% -8.2% -18.5%

1 year -2.3% -8.2% -5.2%

Portfolio

Top 5 holdings Reliance, ONGC, HDFC Bank, ICICI ICICI Bank, KSB
HDFC Bank, Bharti Bank, Power Grid Pumps, Jaiprakash
airtel, ICICI Bank Corp, Coal India, Asso, Jindal Saw,
ONGC Larsen

Weightage to top 5 36% 34.73% 24.87%

holdings

Top 3 Sectors Banking/Finance, Oil Banking/Finance, Oil Cements, Metals &

& Gas, Utilities & Gas, Cement Mining, Engineering

Weightage to top 3 56.81% 64.12% 58.43%

sectors

Management & fees

Fund manager Yogesh Bhatt Ajit Dange Sunil Singhania

Entry load 0% 0% 0%

Exit load 1.00% 1.00% 1.00%

ANALYSIS: In thematic infrastructure category, these fund houses are not doing
well, ICICI Pru, an outperformer, is ranked 3 in this category with an average buy
and a “better switch to other scheme” recommendation. Whereas SBI is ranked 4
with below
average performance and “sell” recommendation but Reliance has not yet gained any
rank or recommendation.

55
 COMPARISON 4
Scheme SBI Magnum NRI fund –FAP Reliance NRI Equity Fund

Fund class Equity Oriented Hybrid Specialty Diversified Equity

Funds

Fund Type Open Ended Open Ended

Ranking NOT RANKED NOT RANKED

Scheme assets Rs in cr 7.00 91.25

(as on June 30,2012)

Inception date Jan 13, 2004 Nov 01, 2004

Bench mark BSE 200

Minimum 50000 5000

investment (in Rs.)

AMC Assets (in cr, as 47184.11 80,694.47

on June 30,2012)

Latest NAV (Rs/unit) 28.95150 38.73480

as on Aug 17, 2012

Performance

3 months 6.2% 11.3%

6 months 1.2% -0.7%

1 year 3.7% 11.3%

56
Portfolio

Top 5 holdings Coal India, HUL, NTPC ICICI ICICI Bank, HUL, Maruti Suzuki,
Bank, ONGC Tata Motors, Reliance

Weightage to top 5 24.62% 26.09%

holdings

Top 3 Sectors Banking/Finance, Metals & Banking/Finance, Technology,

Mining, Utilities Engineering

Weightage to top 3 29.07% 49.86%

sectors

Management & fees

Fund manager Ajit Dange Omprakash Kuckian

Entry load 0% 0%

Exit load 0.25% 1.00%

ANALYSIS: SBI’s NRI fund fall under equity-oriented hybrid specialty category and Reliance’s
NRI scheme fall under diversified equity category. Both are not ranked and not showing any
good performance still from dec 2011 till now reliance has shown a gradual increase but its NAV
is lower by 0.03%. by analysing the past performance, we can expect future rise in this fund as
the top sector of banking and finance are stronger. Now if we talk about SBI its performance is
quite fluctuating with a low in dec 2011 and a high on June - Aug 2012 so the comment for this
scheme is reserved at this point of time

57
 COMPARISON 5

Scheme ICICI Pru Bkg & Fin serve Reliance Banking Fund

Fund class Sector- Banking & Finance Sector- Banking & Finance

Fund Type Open Ended Open Ended

Ranking NOT RANKED NOT RANKED

Scheme assets Rs in cr 143.94 1671.49

(as on June 30,2012)

Inception date Aug 07, 2008 May 21, 2003

Bench mark BSE Bankex Bank Nifty

Minimum 5000 5000

investment (in Rs.)

AMC Assets (in cr, as 73,049.66 80,694.47

on June 30,2012)

Latest NAV (Rs/unit) 18.29000 96.41630

as on Aug 17, 2012

Performance

3 months 15.2% 11.9%

6 months 0.6% -7.4%

1 year 14.7% 16.4%

58
Portfolio

Top 5 holdings HDFC Bank, ICICI Bank, M&M ICICI Bank, HDFC Bank, Bajaj
Financial, Indusland Bank, Finance, SBI, Federal Bank
Sundaram Fin

Weightage to top 5 57.09% 51.14%

holdings

Top 3 Sectors Banking/Finance Banking/Finance

Weightage to top 3 97.01% 87.63%

sectors

Management & fees

Fund manager Venkatesh Sanjeevi Sunil Singhania/ Shrey Loonker/

Sanjay Parekh

Entry load 0% 0%

Exit load 0.50% 1.00%

ANALYSIS: However, this category is not ranked by CRISIL but there is no out
performance by any of the funds, fluctuation is very high in case of ICICI Pru whereas
Reliance is not at all showing any better with an all-time low but from January to march 2012
it showed a gradual
increase and from march onwards, it started showing a decrease.

59
 CHAPTER 6
CONCLUSION

The construction of the mutual fund scheme’s portfolio is done by taking various factors so
even after evaluating the mutual funds and ranking them we cannot say which is the best fund
house or scheme in all. Nothing is certain in case of mutual funds as they are subject to
market risks, an estimate can be made considering various past performances and future
outlooks and best money out of these schemes can be generated.

60
 CHAPTER 7
LATEST AMENDMENTS IN MUTUAL FUNDS

In august first week, markets and mutual fund regulator SEBI came out with a package of
new and reformed rules regarding mutual funds, IPOs and investment advisers. In mutual
funds, the thrust of the changes is to set up an incentive system that will allow asset
management companies to charge higher expenses if they succeed in making inroads outside
the larger cities where fund investors are currently concentrated in. The new rules also
incorporate a series of other changes that collectively improve funds’ economics while
imposing a somewhat higher cost on investors. A back-of-the-envelope calculation shows
that the industry, hypothetically, will pocket close to Rs 583 crore if it charges 30 basis points
on the existing equity asset base (combined AUM of equity, balanced and ELSS Funds) of Rs
1,94,320 crore. The industry had a total AUM of Rs 7, 30,000 crores on July 30. Out of the
total Rs 583 crore, at least 80% of the additional fee will be pocketed by the top five fund
houses including HDFC Mutual, ICICI Prudential mutual fund, Reliance mutual fund, UTI
mutual fund, and Birla Sunlife Mutual Fund. A grey area in the new norms is that SEBI has
not clarified on aspects such as the least amount fund houses should raise in a year or the
minimum number of investors it should have to avail of the benefit of the extra fee of 30
basis points.

CHANGING COURSE

□ June 28: PM says MFs need to be revived

□ July 2: MFs meet Fineman officials
□ July 17: MFAC meets to discuss measures
□ Early August: Minutes of the meeting circulated; these include a 2% charge
for marketing at centres outside the top 15
□ MFAC members say the measure was not discussed; SEBI amends the minutes
□ August 16: SEBI board to meet

61
 REFERENCES

www.mutualfundsindia.com
www.reliancemutual.com

www.sbimf.com
www.icicipruamc.com

THE MUTUAL FUND FACTORY

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