A STUDY ON MUTUAL FUNDS: COMPARATIVE ANALYSIS AND

INVESTORS AWARENESS

A Project Submitted to
University of Mumbai for partial completion of the degree of
Masters in Commerce (Advance Accountancy)
Under the Faculty of Commerce

By JAY PRAMOD PAWAR

Under the Guidance of

PROF. DR JAGRUTI DARJI

K.P.B. HINDUJA COLLEGE OF COMMERCE

315, NEW CHARNI ROAD, MUMBAI 400004

December, 2021
 CERTIFICATE

This is to certify that MR. JAY PRAMOD PAWAR has worked and duly completed his Project Work
for the degree of Master in Commerce (Accounting & Finance) under the Faculty of Commerce and his
project is entitled. “A STUDY ON MUTUALS FUNDS: COMPARATIVE ANALYSIS AND
INVESTORS AWARENESS” under my supervision.

I further certify that the entire work has been done by the learner under my guidance and that no part of
it has been submitted previously for any Degree or Diploma of any University.

It is his own work and facts reported by his personal findings and investigations.

Seal of _________________________
the
College
PROF. DR.
JAGRUTI DARJI

Date of Submission
 DECLARATION

I undersigned Mr. JAY PRAMOD PAWAR hereby, declare that the work embodied in this project
work titled “A STUDY ON MUTUAL FUNDS: COMPARATIVE ANALYSIS AND INVESTORS
AWARENESS”, forms my own contribution to the research work carried out under the guidance of
PROF. DR. JAGRUTI DARJI is a result of my own research work 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 bibliography.

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

JAY PRAMOD PAWAR

CERTIFIED BY
ROLL NO. 83

_______________________

PROF. DR. JAGRUTI DARJI

 ACKNOWLEDGEMENT

To list who all have helped me in 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 this project.
I take this opportunity to thanks the University of Mumbai for giving me chance to do this project.
I would like to thank my Principal, Dr. Minu Madlani for providing the necessary facilities required for
completion of this project.
I would also like to express my sincere gratitude towards my project guide Prof. Dr. JAGRUTI DARJI
whose guidance and care made the project successful.
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
 EXECUTIVE SUMMARY

The project took place at K.P.B. Hinduja College of Commerce, entitled “A Study of Mutual funds:
Comparative Analysis and Investors Awareness”. The main purpose of this study is to analyse the
performance of the joint fund.

In the current economy scenarios interest rates are falling and share market fluctuations have put investors
in the confusion. Such a mutual fund is one of the profitable investment routes available to investors. The
study mainly deals with identifying better collective investments in 3 different categories and by
considering various other parameters such as forms, NAV and risk analysis etc, and also the perception of
individual respondents for investing in mutual fund.

The study was conducted for the 6-week period. Large cap mutual funds, equity variability and co-cash
middle and small caps are selected for the study. The aim of the study was to understand the risk and
returns of selected mutual funds and also to study the perception of investors towards mutual funds. A
sample of 30 investors was selected to understand their perception of mutual funds.

The data collected was analysed using various statistical tool and techniques to draw meaning full
inferences. It was found from the study that majority of the investors are professional like Doctor, CA,
majority of the respondents prefer mutual funds as their savings and safety preference and majority of the
investors took self-decision to invest in mutual funds.
Chapters Content Page No
 Executive Summary
1 Introduction 1
1.1 Introduction to financial system 2-4
1.2 Industry profile 5-8
1.3 History of Mutual Funds 9
1.4 Regulatory Framework 10
1.5 Advantages of Mutual Fund 11
1.6 Disadvantages of Mutual Fund 12
1.7 Future Prospects of Mutual fund In India 13

2 CONCEPTUAL BACKGROUND 14
2.1 Theoretical background of the study 15
2.2 Schemes of Mutual Fund 15-16
2.3 Mutual fund schemes by investor purpose 17-20
2.4 Other schemes 20-21
2.5 Selection parameters for mutual fund 21-22
2.6 Types of returns on mutual fund 22

3 MUTUAL FUNDS IN INDIA 23

3.1 Introduction 24
3.2 Mutual fund companies in India 25-26
3.3 Mutual fund distribution channels 26-27
3.4 Marketing strategic for mutual funds 28
3.5 Working of Mutual fund 29

4 LITERATURE REVIEW 30-33

5 RESEARCH METHODOLOGY 34
5.1 Statement of the problem 35
5.2 need of the study
5.3 Objectives of the study
5.4 scope of the study
5.5 Research method 36
5.6 Limitation of study
5.7 Sampling technique

6. COMPARATIVE ANALYSIS 37
6.1 Introduction 38
6.2 Factors used to describe the ratios 38-40
 6.3 Mutual fund comparison 41-46
6.4 Comparison between companies in Mutual fund Industry 46-58

7 DATA ANALYSIS AND INTERPRETATION 59-73

8 FINDING, SUGGESTION AND CONCLUSION 74

8.1 Finding 75-76
8.2 Suggestion 77
8.3 Conclusion 78
- BIBLOGRAPHY 79-81
- QUESTIONNAIRE 82-84

Table no Table Name Page No

6.4.1 Fund Return of Equity Diversified Funds 47
6.4.2 Risk Profile of Equity Diversified Funds 48-49
6.4.3 NAV Details of Equity Diversified Funds 50
6.4.4 Fund Return of Large Cap Mutual Funds 51-52
6.4.5 Risk Profile of Large Cap Mutual Funds 52-53
6.4.6 NAV Details of Large Cap Mutual Funds 53-54
6.4.7 Fund Return of Small and Mid-Cap Funds 54-55
6.4.8 Risk Profile of Small and Mid-Cap Funds 56-57
6.4.9 NAV Details of Small and Mid-Cap Funds 57-58
7.1 Do you invest in mutual fund? 60
7.2 The age group under you belong to? 61
7.3 Occupation of the investors 62
7.4 Why do you invest in mutual fund? 63
7.5 What is your income? 64
7.6 What is the Duration of your investment 65
7.7 How much amount do you invest? 66
7.8 What is Risk Preference? 67
7.9 What type of scheme do you prefer? 68
7.10 From which source you came to know about mutual fund? 69
7.11 What type of Scheme do you prefer? 70
7.12 Performance of fund manager? 71
 7.13 Current Economic and Market Condition? 72
7.14 Attitude toward risk 73
List OF TABLES

LIST OF GRAPHS

Graph No Graph Name Page No

6.4.1 Graph Showing Equity Diversified Fund Returns 47
6.4.2 Graph Showing Risk Profile of Equity Diversified Fund 49
6.4.3 Graph Showing NAV Details of Equity Diversified Funds 50
6.4.4 Graph Showing Fund Return of Large Cap Mutual Funds 51
6.4.5 Graph Showing Risk Analysis of Large Cap Mutual Funds 52
6.4.6 Graph Showing NAV Details of Large Cap Funds 53
6.4.7 Graph Showing Fund Return of Small and Mid-Cap Funds 55
6.4.8 Graph Showing Risk Analysis of Small and Mid-Cap Funds 56
6.4.9 Graph Showing NAV Details of Small and Mid-Cap Funds 57
7.1 Graph showing no of respondent who is investing in MF 60
7.2 Graph showing age group of the respondents 61
7.3 Graph showing occupation of investors 62
7.4 Graph showing purpose of investment 63

7.5 Graph showing income level of investors 64

7.6 Graph showing duration of investment 65
7.7 Graph showing amount of investment 66
7.8 Graph showing risk preference 67
7.9 Graph showing preferred scheme of respondents 68
7.10 Graph showing from which source respondents of MF 69
7.11 Graph showing scheme types that respondents prefer 70
7.12 Graph showing ranking of performance of fund manager 71
7.13 Graph showing ranking on current economic and market condition 72
7.14 Graph showing ranking of attitude toward risk 73
Chapter scheme:-

Chapter 1- Introduction

Introduction to mutual fund, concept of mutual funds, meaning and definition of mutual funds, Industry
Profile, history of mutual fund, Regulatory framework, advantages and disadvantages, Future in India

Chapter 2- Conceptual background and Literature review

Theoretical background of the study, schemes of mutual fund, selection Parameters, mutual fund and
companies in India, Marketing strategies for Mutual Fund, working of Mutual Funds, literature review

Chapter 5- Research design

Statement of the problem, need for the study, objectives of the study, scope of study, research method,
limitation of the study, sampling technique.

Chapter 7-Data Analysis and interpretation

Comparative analysis of NAV, Beta, Standard deviation, Sharpe ratio, Treynor Rate of different
companies. Analysis and interpretation of mutual fund investors

Chapter 8- Findings Suggestion and Conclusion

Finding, suggestion, conclusion, bibliography, questionnaire and reference.

 CHAPTER-1

INTRODUCTION

1
1.1 INTRODUCTION TO FINANCIAL SYSTEM

Every country's financial system consists of financial markets, financial intermediaries, financial instruments
or financial instruments. Finance is the science of money management. Finance represents resources as
funds needed for specific activities.

When reference is made to the financial needs of an organization, the financing is also called "funds" or
"capital". "System" in the term "financial system" means a complex or closely related group of institutions,
agents, practices, markets, transactions, claims and obligations in the economy.

There are people with territories, people, and surplus funds. The financial system or banking sector acts as a
facilitator to facilitate surplus-to-deficit flows. The financial system is a combination of multiple institutions,
markets, regulations, laws, practices, fund managers, analysts, operations, claims and debts.

The Indian financial system consists of organized sector and unorganized sector. The organized sector is
structured and largely falls under the regulation and control of governing bodies, whereas, unorganized
sector is more of unstructured and has the freeways in terms of regulations and controlling power. The
stability of financial markets has an impact on the functioning of the economy and thus the financial system
plays a vital role in the economic prosperity.

1.1.1 CONCEPT OF MUTUAL FUND:

As you may know, mutual funds are very popular in the past 26 years. It was another obscure financial
product that became part of our daily lives. In the United States, more than half of eight million individuals
or households invest in mutual funds. In other words, in the United States alone, it is invested in trillions of
dollars in mutual funds. After this, it is all common sense that investing in a mutual fund is better than
simply saving money, but leaving it in a savings account. However, most people are about to finish
understanding of funds. It cannot help people in mutual fund sales to speak strange words separated by
terminology that many investors do not understand.

The investment trust industry in India was led by the government of India, and in 1964 the unit trust of India
was established. In 1993, SEBI regulations were replaced by the comprehensively revised Mutual Fund
Regulations in 1996. It has been 36 years for mutual funds to exist in this country at the end of the
millennium. The ride for the last 36 years was not smooth. The opinions of investors are still divided. Some
are for mutual funds and others are against mutual funds. UTI began its activity in July 1964. UTI was born
in an era characterized by the large political and economic turmoil that set the financial markets back.
Entrepreneurs were very reluctant to enter the capital market.

2
1.1.2Meaning of Mutual Fund

Mutual funds are a type of investment investors use to raise money so that each investor can participate in
a portfolio of securities. Individual investors do not actually own each security. He invests in mutual funds.
The main advantage of mutual funds is that they provide a way for investors to achieve investment
diversification without having to invest a lot of money. The first mutual fund was the Massachusetts Trust
Fund, which was introduced in 1924. At the end of the first year, the fund had 250 investors and $ 63,600
in assets. By the end of 1995, the fund had reached $ 1.8 billion with 73,500 investors. There are now more
than 7,000 mutual funds to choose from. You may wonder why you should choose mutual funds. Mutual
funds have two big advantages over paying stocks individually. Their strengths are diversified through
professional management without having to invest a lot of money.

Decentralization is important to reduce risk. By owning several companies' shares, the value of the fund
shares will not be compromised even if the performance of individual companies is low. The choice of
securities to buy, cash and securities distribution, and when to buy are all made by the fund manager or
management. Fund managers have the training, time and resources to make the best investment decisions
based on information. This fund is also part of a fund where investors can switch funds at no additional
cost. Most mutual funds are able to check the amount set on a regular basis and automatically transfer
funds on a regular basis once a month, including the privilege of receiving checks. This type of investment
is called the dollar cost average, which is the same as the monthly average for people who are investing in
regularly set dollar amounts. This type of investment is the average of the dollar cost.

3
1.1.3 Definition Of Mutual Funds

“A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to
invest in securities like stocks, bonds, money market instruments, and other assets. Mutual funds are
operated by professional money managers, who allocate the fund's assets and attempt to produce capital
gains or income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the
investment objectives stated in its prospectus.”

Mutual funds give small or individual investors access to professionally managed portfolios of equities,
bonds, and other securities. Each shareholder, therefore, participates proportionally in the gains or losses of
the fund. Mutual funds invest in a vast number of securities, and performance is usually tracked as the
change in the total market cap of the fund—derived by the aggregating performance of the underlying
investments.

1.1.4 Why Select Mutual Fund?

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 investors opt 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.

RETURN RISK MATRIX

HIGHIER RISK HIGHER RISK

MODERATE RETURNS HIG HIER RETURNS

Venture
Capital Equity

Mutual
Funds

LOWER RISK LOWER RISK

LOWER RETURNS HIGIER RETURNS
 4

1.2 INDUSTRY PROFILE

The investment fund industry is one of the emerging industries in India. Currently, there are 40 players in
the mutual fund company in India. The number of players in public places has decreased from 11 to 5. The
public place was gradually demoted to legacy as it caught up with the big wave of the market in proportion
to the players in the private land.

The Investment Trusts Association in India is a business entity that promotes the growth of investment
trust companies in India. It enforces an experienced and vigorous position in identifying the steps that need
to be taken to protect investors and encourage the field of mutual funding.

It is worth noting that the .AMFI is not a self-regulatory company (SOR) and that the hints do not bind the
members of the company. By its very nature, AMFI plays the role of advisor or counsellor within a mutual
price point company. The recommendations emerge as mandatory and most convenient if they are included
in the regulatory framework that the Securities and Exchange Commission (SEBI) of India has prescribed
for mutual budgeting.
 5

Indian mutual fund companies follow a three-tier system as demonstrated below.

1. Sponsor

2. Trust

3. Asset management

Sponsor

Sponsors are those who are thinking of starting a mutual fund. Sponsors will conduct SEBI routine
procedures for market regulators and also0mutual fund. Not everyone can start a joint fund. SEBI grants
the right to open a joint fund for integrity. This is because the financial quarters and the large spending on
the sector and the simple factors they should make are simple factors.

Sponsor is defined under SEBI regulations as any person who, acting alone or in combination of another
corporate body establishes a Mutual Fund. The sponsor of the fund is akin to the promoter of a company as
he gets the fund registered with SEBI. The sponsor forms a trust and appoints a Board of Trustees. The
sponsor also appoints the Asset Management Company as fund managers. The sponsor either directly or
acting through the trustees will also appoint a custodian to hold funds’ assets. All these are made in
accordance with the regulation and guidelines of SEBI.

As per the SEBI regulations, for the person to qualify as a sponsor, he must contribute at least 40% of the net
worth of the Asset Management Company and possesses a sound financial track record over 5 years prior to
registration.

Trust

Once SEBI is satisfied with the proposed sponsor's credibility and eligibility, the sponsor then agrees to the
Indian Trust Act of 1882, and the trust cannot enter into a contract because it has no criminal identity in
India. Therefore, the trustee is a legal individual to act on behalf of believing. The contract is in the name of
the trustee. Once the trust is created, it is registered with SEBI and is known as a general trust fund.

A Trust is created through a document called the Trust Deed that is executed by the fund sponsor in favour
of the trustees. The Trust- the Mutual Fund – may be managed by a board of trustees- a body of individuals,
or a trust company- a corporate body. Most of the funds in India are managed by Boards of Trustees. While
the boards of trustees are governed by the Indian Trusts Act, where the trusts are a corporate body, it would
also require to comply with the Companies Act, 1956. The Board or the Trust company as an independent
body, acts as a protector of the of the unit-holder’s interests. The Trustees do not directly manage the
portfolio of securities. For this specialist function, the appoint an Asset Management Company. They ensure
that the Fund is managed by AMC as per the defined objectives and in accordance with the trust’s deeds and
SEBI regulations.

Asset Management

The trustee appoints AMC, which has been established as a corporation, to manage the cash of the
investor. In the case of mutual funds, AMC pays for the service instead of this money management. This
price must be an investor and is deducted from the money raised by them.

The role of an Asset Management Company (AMC) is to act as the investment manager of the Trust under
the board supervision and the guidance of the Trustees. The AMC is required to be approved and registered
with SEBI as an AMC. The AMC of a Mutual Fund must have a net worth of at least Rs. 10 Crores at all
times. Directors of the AMC, both independent and non-independent, should have adequate professional
expertise in financial services and should be individuals of high morale standing, a condition also applicable
to other key personnel of the AMC. The AMC cannot act as a Trustee of any other Mutual Fund. Besides its
role as a fund manager, it may undertake specified activities such as advisory services and financial
consulting, provided these activities are run independent of one another and the AMC’s resources (such as
personnel, systems etc.) are properly segregated by the activity. The AMC must always act in the interest of
the unit-holders and reports to the trustees with respect to its activities.

Custodian and Depositories

Mutual Fund is in the business of buying and selling of securities in large volumes. Handling these securities
in terms of physical delivery and eventual safekeeping is a specialized activity. The custodian is appointed
by the Board of Trustees for safekeeping of securities or participating in any clearance system through
approved depository companies on behalf of the Mutual Fund and it must fulfil its responsibilities in
accordance with its agreement with the Mutual Fund. The custodian should be an entity independent of the
sponsors and is required to be registered with SEBI. With the introduction of the concept of
dematerialization of shares the dematerialized shares are kept with the Depository participant while the
custodian holds the physical securities. Thus, deliveries of a fund’s securities are given or received by a
custodian or a depository participant, at the instructions of the AMC, although under the overall direction
and responsibilities of the Trustees.
 7
Bankers:

A Fund’s activities involve dealing in money on a continuous basis primarily with respect to buying and
selling units, paying for investment made, receiving the proceeds from sale of the investments and
discharging its obligations towards operating expenses. Thus, the Fund’s banker plays an important role to
determine quality of service that the fund gives in timely delivery of remittances etc.

Transfer Agents:

Transfer agents are responsible for issuing and redeeming units of the Mutual Fund and provide other related
services such as preparation of transfer documents and updating investor records. A fund may choose to
carry out its activity in-house and charge the scheme for the service at a competitive market rate. Where an
outside Transfer agent is used, the fund investor will find the agent to be an important interface to deal with,
since all of the investor services that a fund provides are going to be dependent on the transfer agent.

Trustees:

A Trust is created through a document called the Trust Deed that is executed by the fund sponsor in favour
of the trustees. The Trust- the Mutual Fund – may be managed by a board of trustees- a body of individuals,
or a trust company- a corporate body. Most of the funds in India are managed by Boards of Trustees. While
the boards of trustees are governed by the Indian Trusts Act, where the trusts are a corporate body, it would
also require to comply with the Companies Act, 1956. The Board or the Trust company as an independent
body, acts as a protector of the of the unit-holder’s interests. The Trustees do not directly manage the
portfolio of securities. For this specialist function, the appoint an Asset Management Company. They ensure
that the Fund is managed by AMC as per the defined objectives and in accordance with the trust’s deeds and
SEBI regulations.
 8

1.3 HISTORY OF MUTUAL FUNDS:

First Stage 1964-1987:

The India Trust Unit (UTI) was established in 1963 under the National Assembly. It was founded by the
Reserve Bank of India and is managed and controlled by the Reserve Bank of India. In 1978, UTI was
separated from RBI and the Indian Industrial Development Bank (IDBI) replaced the administration's
regulations, not the RBI. The first plan launched by UTI was the 1964-unit system, and as of the end of
1988, UTI manages 6,700 core assets.

Stage 2 1987-1993 (input from public sector funds):

Invested in non-UTI public investment funds established by General Banking and Life Insurance (LIC) in
India in 1987 and General Insurance Corporation (GIC) in India. The
SEBI Mutual Fund was the first non-UTI mutual fund established in June 1987. The SEBI Mutual Fund is
the first non-UTI mutual fund established in June 1987, with the Canbank cofund (December 87), Punjab
Punjab Bank (August 1989), India Cooperative Fund, 90 days). GIC established a joint venture in
December 1990 and LIC founded a joint venture in June 1989. By the end of 1993, the mutual fund sector
managed assets of Rs. 47005.

Stage 3 of 1993-2003 (Political Funding):

With the launch of the private fund in 1993, a new era has opened in the Indian investment fund industry,
allowing investors in India to choose from a broad range of funding products. In 1993, the first rule of
mutual fund was established, and all mutual funds were registered and managed. Kothari Pioneer (now
merged with Franklin Templeton) is the first private investment fund registered in July 1993.

Stage 4-From Feb 2003

In February 2003, UTI was divided into two independent agencies with the unit trust that cancelled Indian
law in 1963. One of them, as of the end of January 2003, is the unit assets of the Indian Rupee unit
managed at 29,835 rupees, especially the US 64 plan, guaranteed income and other specific planned assets.
The management of the Indian government unit trust and the specific business are under the framework of
the Indian government. It is not included in the scope of mutual fund rules.
 9

1.4 Regulatory framework

Indian Securities and Exchange Commission (SEBI):

The Government of India is the main regulatory body of all groups. These groups raise capital in the
capital markets or invest in securities in capital markets such as stocks and listed bonds. The proceedings
of the Parliament were conducted by the Securities and Exchange Commission of India in 1992.
Investment funds have become important investors in stock market securities. They are therefore under
SEBI's jurisdiction. SEBI authorizes all investment funds, including investment sites, to comply with
investment restrictions and restrictions, how to record revenue and expenses, how to disclose information
to investors, and how to protect investors in general. To protect investors' interests, SEBI develops policies
and regulates investment funds. This rule applies to investment funds promoted by public or private
institutions, including investment funds promoting foreign institutions. SEBI's Asset Management
Corporation (AMC) manages funds by investing in various programs from the funds it manages.
According to SEBI regulations, two-thirds of board members or members of a trustworthy independent
company.

Investment Trust Association (AMFI) in India:

With the growth of Indian investment trusts, India needs to establish mutual fund associations as a non-
profit organization. The Indian Investment Trust Association (AMFI) was established on August 22, 1995.

AMFI is the highest authority of all asset management companies (AMCs) registered with SEBI. To date,
all asset management companies have been members of the mutual fund program. It operates under the
supervision and guidance of the board of directors.

The Indian Mutual Funds Association is leading the mutual fund industry in India and is building a
professional and sound market with ethical standards that encourage and sustain standards. The principles
to protect and promote the interests of mutual funds and their owners.
 10

1.5 ADVANTAGES OF MUTUAL FUNDS

There are many reasons why investors choose to invest in mutual funds with such frequency. Let's break
down the details of a few.

 Advanced Portfolio Management

When you buy a mutual fund, you pay a management fee as part of your expense ratio, which is used to
hire a professional portfolio manager who buys and sells stocks, bonds, etc. 1

This is a relatively small price to pay for getting professional help in the management of an investment
portfolio.

 Dividend Reinvestment

As dividends and other interest income sources are declared for the fund, they can be used to purchase
additional shares in the mutual fund, therefore helping your investment grow.
  Risk Reduction (Safety)

Reduced portfolio risk is achieved through the use of diversification, as most mutual funds will invest in
anywhere from 50 to 200 different securities—depending on the focus. Numerous stock index mutual funds
own 1,000 or more individual stock positions.

11

 Convenience and Fair Pricing

Mutual funds are easy to buy and easy to understand. They typically have low minimum investments and
they are traded only once per day at the closing net asset value (NAV). 1  This eliminates price fluctuation
throughout the day and various arbitrage opportunities that day traders practice.

1.6 Disadvantages of Mutual Funds

However, there are also disadvantages to being an investor in mutual funds. Here's a more detailed look at
some of those concerns.

 High Expense Ratios and Sales Charges

If you're not paying attention to mutual fund expense ratios and sales charges, they can get out of hand. Be
very cautious when investing in funds with expense ratios higher than 1.50%, as they are considered to be
on the higher cost end. Be wary of 12b-1 advertising fees and sales charges in general. There are several
good fund companies out there that have no sales charges. Fees reduce overall investment returns. 1

 Management Abuses

Churning, turnover, and window dressing may happen if your manager is abusing their authority. This
includes unnecessary trading, excessive replacement, and selling the losers prior to quarter-end to fix the
books.

 Tax Inefficiency

Like it or not, investors do not have a choice when it comes to capital gains pay-outs in mutual funds. Due
to the turnover, redemptions, gains, and losses in security holdings throughout the year, investors typically
receive distributions from the fund that are an uncontrollable tax event. 1
  Poor Trade Execution

If you place your mutual fund trade any time before the cut-off time for same-day NAV, you'll receive the
same closing price NAV for your buy or sell on the mutual fund. 2  For investors looking for faster execution
times, maybe because of short investment horizons, day trading, or timing the market, mutual funds provide
a weak execution strategy.

12

1.7 FUTURE PROSPECT OF MUTUAL FUNDS IN INDIA

 Financial experts believe that the future of Mutual Funds in India will be very bright. It has been
estimated that by March-end of 2010, the mutual fund industry of India will reach Rs 40,90,000
crore, taking into account the total assets of the Indian commercial banks. In the coming 10 years the
annual composite growth rate is expected to go up by 13.4%.
 100% growth in the last 6 years.
 Number of foreign AMC's are in the queue to enter the Indian markets like Fidelity Investments, US
based, with over US$1trillion assets under management worldwide.
 Our saving rate is over 23%, highest in the world. Only channelizing these savings in mutual funds
sector is required.
 We have approximately 29 mutual funds which is much less than US having more than 800. There is
a big scope for expansion.
 'B' and 'C' class cities are growing rapidly. Today most of the mutual funds are concentrating on the
'A' class cities. Soon they will find scope in the growing cities.
 Mutual fund can penetrate Rurales like the Indian insurance industry with simple and limited
products.
 SEBI allowing the MFs to launch commodity mutual funds.
 Emphasis on better corporate governance.
 Trying to curb the late trading practices.
 Introduction of Financial Planners who can provide need-based advice.
 Looking at the past developments and combining it with the current trends it can be concluded that
the future of Mutual Funds in India has lot of positive things to offer to its investors.
 13

CHAPTER – 2

CONCEPTUAL BACKGROUND
 14

2.1 THEORETICAL BACKGROUND OF THE STUDY:

Mutual funds are funds that have been collected from investors and invested in specific investment
objectives. Mutual funds are the pool of resources invested by professionals (fund managers) in portfolios
to optimize revenues at specific risk levels. It is a mechanism for collecting resources by investing in
securities and issuing units to investors according to the goals set out in the proposal document. Securities
investments are spread across a variety of industries, reducing risk. Diversification reduces risk because all
stocks may not move in the same direction at the same time. Mutual fund investors know unit holders.
Investors share the benefits or losses corresponding to their investment. The mutual fund regulator is SEBI.

2.2 SCHEMES OF MUTUAL FUNDS

According to the maturity plan:

Mutual fund plans are divided into open and closed schemes on maturity dates.

Unlimited funds

There is no fixed redemption date for these funds. In general, they are open all year round for subscription
and exchange. Their prices are interrelated and investors can buy or sell units at any exchange rate
associated with their daily net asset value (NAV). From an investor's perspective, it is more liquid than
closed-end funds.

Closed end fund

These funds were first opened during the public offering (IPO) and then closed into and entered. The
redemption date is fixed for these funds. And closed-end funding is generally open for preliminary public
offerings, most effectively for subscriptions during an accurate period. One of the characteristics of the
closed end is that it is generally traded with a discount to NAV. However, as the maturity approaches, the
discount diminishes. Closed-end funds are listed on stock exchanges where investors should buy or
advertise their units from the secondary market at any time.

Interval fund

A fund combining the functions of open-ended and closed-end funds.

15
16
2.3 Mutual fund scheme by investment purpose

Equity Fund / Growth Fund

The funds to invest in stocks are called stock funds. The main purpose of the growth fund is to provide
funds for mid- to long-term investment. It is an ideal plan for investors who want to raise capital. Several
types of equity funds (e.g., diversified funds, industrial funds, index funds).

Income fund

Income funds are also known as debt funds. The main purpose of the income fund is to provide investors
with ordinary income and ordinary income. These funds invest primarily in high quality fixed income
securities such as bonds, government bonds, commercial paper and other currency instruments. Income
funds are ideal for medium and long-term investors.

Money market fund

This fund invests in liquid money market products. The investment period can be as long as one day. They
provide easy mobility. This fund is ideal for institutional investors and companies investing in funds in the
short term.

Balance fund

Some of these funds invest in stocks and instruments (debts) that hold bonds. They provide a positive
component of capital adequacy, while providing a stable return and reducing volatility in the fund. It is an
ideal option for mid-to long-term investors who want to take intermediate risk.

17
2.3.1 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:

• 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.
 18
• 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 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.

Further the mutual funds can be broadly classified on the basis of investment parameter viz,
Each category of funds is backed by an investment philosophy, which is pre-defined in the objectives of the
fund. The investor can align his own investment needs with the funds objective and invest accordingly.

2.3.2 BY INVESTMENT OBJECTIVE:

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.
 19
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.

Load Funds:
A Load Fund is one that charges a commission for entry or exit. That is, each time you buy or sell units in
the fund, a commission will be payable. Typically, entry and exit loads range from 1% to 2%. It could be
worth paying the load, if the fund has a good performance history.

No-Load Funds:
A No-Load Fund is one that does not charge a commission for entry or exit. That is, no commission is
payable on purchase or sale of units in the fund. The advantage of a no-load fund is that the entire corpus is
put to work.

2.4 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.
 20
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.

2.5 SELECTION PARAMETERS FOR MUTUAL FUND

Your objective:
The first point to note before investing in a fund is to find out whether your objective matches with the
scheme. It is necessary, as any conflict would directly affect your prospective returns. Similarly, you should
pick schemes that meet your specific needs. Examples: pension plans, children’s plans, sector-specific
schemes, etc.

Your risk capacity and capability:

This dictates the choice of schemes. Those with no risk tolerance should go for debt schemes, as they are
relatively safer. Aggressive investors can go for equity investments. Investors that are even more aggressive
can try schemes that invest in specific industry or sectors.

Fund Manager’s and scheme track record:

Since you are giving your hard-earned money to someone to manage it, it is imperative that he manages it
well. It is also essential that the fund house you choose has excellent track record. It also should be
professional and maintain high transparency in operations. Look at the performance of the scheme against
relevant market benchmarks and its competitors. Look at the performance of a longer period, as it will give
you how the scheme fared in different market conditions.

Cost factor:
Though the AMC fee is regulated, you should look at the expense ratio of the fund before investing. This is
because the money is deducted from your investments. A higher entry load or exit load also will eat into
your returns. A higher expense ratio can be justified only by superlative returns. It is very crucial in a debt
fund, as it will devour a few percentages from your modest returns.
21

Also, Morningstar rates mutual funds. Each year end, many financial publications list the year's best
performing mutual funds. Naturally, very eager investors will rush out to purchase shares of last year's top
performers. That's a big mistake. Remember, changing market conditions make it rare that last year's top

performer repeats that ranking for the current year. Mutual fund investors would be well advised to consider
the fund prospectus, the fund manager, and the current market conditions. Never rely on last year's top
performers.

2.6 Types of Returns on Mutual Fund:

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.
 22

CHAPTER 3

MUTUAL FUNDS IN INDIA

 23

3.1 INTRODUCTION

In 1963, the day the concept of Mutual Fund took birth in India. Unit Trust of India invited investors or
rather to those who believed in savings, to park their money in UTI Mutual Fund. For 30 years it goaled
without a single second player. Though the 1988 year saw some new mutual fund companies, but UTI
remained in a monopoly position.

The performance of mutual funds in India in the initial phase was not even closer to satisfactory level.
People rarely understood, and of course investing was out of question. But yes, some 24 million shareholders
were accustomed with guaranteed high returns by the beginning of liberalization of the industry in 1992.
This good record of UTI became marketing tool for new entrants. The expectations of investors touched the
sky in profitability factor. However, people were miles away from the preparedness of risks factor after the
liberalization.

The net asset value (NAV) of mutual funds in India declined when stock prices started falling in the year
1992. Those days, the market regulations did not allow portfolio shifts into alternative investments. There
was rather no choice apart from holding the cash or to further continue investing in shares. One more thing
to be noted, since only closed-end funds were floated in the market, the investors disinvested by selling at a
loss in the secondary market.

The performance of mutual funds in India suffered qualitatively. The 1992 stock market scandal, the losses
by disinvestments and of course the lack of transparent rules in the whereabouts rocked confidence among
the investors. Partly owing to a relatively weak stock market performance, mutual funds have not yet
recovered, with funds trading at an average discount of 1020 percent of their net asset value.

The securities and Exchange Board of India (SEBI) came out with comprehensive regulation in 1993 which
defined the structure of Mutual Fund and Asset Management Companies for the first time.

The supervisory authority adopted a set of measures to create a transparent and competitive environment in
mutual funds. Some of them were like relaxing investment restrictions into the market, introduction of open-
ended funds, and paving the gateway for mutual funds to launch pension schemes.

The measure was taken to make mutual funds the key instrument for long-term saving. The more the variety
offered, the quantitative will be investors.

Several private sectors Mutual Funds were launched in 1993 and 1994. The share of the private players has
risen rapidly since then. Currently there are 34 Mutual Fund organizations in India managing 1,02,000
crores.
Mutual fund industry has seen a lot of changes in past few years with multinational companies coming into
the country, bringing in their professional expertise in managing funds worldwide. In the past few months
there has been a consolidation phase going on in the mutual fund industry in India. Now investors have a
wide range of Schemes to choose from depending on their individual profiles.

24

3.2 MUTUAL FUND COMPANIES IN INDIA:

The concept of mutual funds in India dates back to the year 1963. The era between 1963 and 1987 marked
the existence of only one mutual fund company in India with Rs. 67bn assets under management (AUM), by
the end of its monopoly era, the Unit Trust of India (UTI). By the end of the 80s decade, few other mutual
fund companies in India took their position in mutual fund market.

The new entries of mutual fund companies in India were SBI Mutual Fund, Canbank Mutual Fund, Punjab
National Bank Mutual Fund, Indian Bank Mutual Fund, Bank of India Mutual Fund.

The succeeding decade showed a new horizon in Indian mutual fund industry. By the end of 1993, the total
AUM of the industry was Rs. 470.04 bn. The private sector funds started penetrating the fund families. In
the same year the first Mutual Fund Regulations came into existence with re-registering all mutual funds
except UTI. The regulations were further given a revised shape in 1996.

Kothari Pioneer was the first private sector mutual fund company in India which has now merged with
Franklin Templeton. Just after ten years with private sector players penetration, the total assets rose up to Rs.
1218.05 bn. Today there are 33 mutual fund companies in India.

• ABN AMRO Mutual Fund • Standard Chartered Mutual Fund

• Reliance Mutual Fund • Franklin Templeton India Mutual

Fund

• Birla Sun Life Mutual Fund • Morgan Stanley Mutual Fund

India

• Bank of Baroda Mutual Fund • Escorts Mutual Fund

• HDFC Mutual Fund • Alliance Capital Mutual Fund

• HSBC Mutual Fund • Benchmark Mutual Fund

• ING Vysya Mutual Fund • Canbank Mutual Fund

• Prudential ICICI Mutual Fund • Chola Mutual Fund

• State Bank of India Mutual Fund • Unit Trust of India Mutual Fund

• Tata Mutual Fund • LIC Mutual Fund

 25

Market Share
Reliance Mutual Fund HDFC Mutual Fund Birla Sun Life Mutual Fund

ICICI Prudential Mutual Fund Kotak Mahindra Mutual Fund UTI Mutual Fund

LIC Mutual Fund SBI Mutual Fund IDFC Mutual Fund

TATA Mutual Fund Franklin Templeton Mutual Fund DSP Black Mutual Fund

23 others players

3% 14% 14%
4%
3%
3% 20%

4% 9% 9%
9%
4%

4%

3.3 MUTUAL FUNDS DISTRIBUTION CHANNELS

Investors have varied investment objectives and can be classified as aggressive, moderate and conservative,
depending on their risk profile. For each of these categories, asset management companies (AMCs) devise
different types of fund schemes, and it is important for investors to buy those that match their investment
goals.

Funds are bought and sold through distribution channels, which play a significant role in explaining to the
investors the various schemes available, their investment style, costs and expenses. There are two types of
distribution channels-direct and indirect. In case of the former, the investors buy units directly from the fund
AMC, whereas indirect channels include the involvement of agents. Let us consider these distribution
channels in detail.

Direct channel

This is good for investors who do not need the advisory services of agents and are well-versed with the
fundamentals of the fund industry. The channel provides the benefit of low cost, which significantly
enhances the returns in the long run.
Indirect channel

This channel is widely prevalent in the fund industry. It involves the use of agents, who act as
intermediaries between the fund and the investor. These agents are not exclusive for mutual funds and can
deal in multiple

26

financial instruments. They have an in-depth knowledge about the functioning of financial instruments and
are in a position to act as financial advisers. Here are some of the players in the indirect distribution
channels.

a) Independent financial advisers (IFA): These are individuals trained by AMCs for selling their
products. Some IFAs are professionally qualified CFPs (certified financial planners). They help investors in
choosing the right fund schemes and assist them in financial planning. IFAs manage their costs through the
commissions that they earn by selling funds.

b) Organized distributors: They are the backbone of the indirect distribution channel. They have the
infrastructure and resources for managing administrative paperwork, purchases and redemptions. These
distributors cater to the diverse nature of the investor community and the vast geographic spread of the
country by establishing offices in rural and semi urban locations.

c) Banks: They use their network to sell mutual funds. Their existing customer base serves as a captive
prospective investor base for marketing funds. Banks also handle wealth management for their clients and
manage portfolios where mutual funds are one of the asset classes. The players in the indirect channel assist
investors in buying and redeeming fund units. They try to understand the risk profile of investors and
suggest fund schemes that best suits their objectives. The indirect channel should be preferred over the direct
channel when investors want to seek expert advice on the risk-return mix or need help in understanding the
features of the financial securities in which the fund invests as well as other important attributes of mutual
funds, such as benchmarking and tax treatment.
 27
3.4 Marketing Strategies for Mutual Funds
Business Accounts

• The most common sales and marketing strategies for mutual funds is to sign-up companies as a preferred
option for their retirement plans. This provides a simple way to sign-up numerous accounts with one
master contract. To market to these firms, sales people target human resource professionals. Marketing
occurs through traditional business-to-business marketing techniques including conferences, niche
advertising and professional organizations. For business s accounts, fund representatives will stress ease
of use and compatibility with the company's present systems.

Consumer Marketing

• Consumer marketing of mutual funds is similar to the way other financial products are sold. Marketers
emphasize safety, reliability and performance. In addition, they may provide information on their
diversity of choices, ease of use and low costs. Marketers try to access all segments of the population.
They use broad marketing platforms such as television, newspapers and the internet. Marketers
especially focus on financially oriented media such as CNBC television and Business week magazine.

Performance

• Mutual funds must be very careful about how they market their performance, as this is heavily regulated.
Mutual funds must market their short, medium and long-term average returns to give the prospective
investor a good idea of the actual performance. For example, most funds did very well during the
housing boom. However, if the bear market that followed is included, performance looks much more
average. Funds may also have had different managers with different performance records working on the
same funds, making it hard to judge them.

Marketing Fees
• Mutual funds must be very clear about their fees and report them in all of their marketing materials. The
main types of fees include the sales fee (load) and the management fee. The load is an upfront charge that
a mutual fund charges as soon as the investment is made. The management fee is a percentage of assets
each year, usually 1 to 2 percent.

28

3.5 WORKING OF MUTUAL FUNDS

The mutual fund collects money directly or through brokers from investors. The money is invested in
various instruments depending on the objective of the scheme. The income generated by selling securities or
capital appreciation of these securities is passed on to the investors in proportion to their investment in the
scheme. The investments are divided into units and the value of the units will be reflected in Net Asset
Value or NAV of the unit. NAV is the market value of the assets of the scheme minus its liabilities. The per
unit NAV is the net asset value of the scheme divided by the number of units outstanding on the valuation
date. Mutual fund companies provide daily net asset value of their schemes to their investors. NAV is
important, as it will determine the price at which you buy or redeem the units of a scheme. Depending on the
load structure of the scheme, you have to pay entry or exit load.
 29

CHAPTER 4
LITERATURE REVIEW
 30

Bijan Roy and Saikat Sovan Deb (2003) They are socially consistent with traditionally selected
traditional funds with similar net assets to investigate the characteristics of assets held, diversification of
portfolios and the different impacts of diversification on investment performance. Use a sample of
responsible stock mutual funds. In terms of these attributes, social responsibility funds are not much
different from traditional funds. In addition, the impact of diversification on investment performance did
not differ between the two groups. During the study period, both groups were below the Domini 400
Social Index and the Standard & Poor's 500 Index.

Ajay Koharna and Peter Tofano and Wedge, L (2007) they studied mutual fund mergers between 1999
and 2001 to understand the role and effectiveness of the fund board. Some fund mergers are beneficial for
target shareholders, but they are expensive when targeting fund directors. Here the higher paid target fund
boards were less to approve beyond the benefits of the family merge causing a substantial reduction in
their rewards.

Paramita Mukherjee and suchismita (2008) the era of capital market reform, the Indian stock market
moved with other stock markets in India, if the sustainable interests of foreign investors in the market
increased. In the United States and other Asian markets such as Hong Kong and Singapore, the most
significant returns on the stock market in India are expected to affect stock returns in major Asian markets.

Jack treynor (1965) A methodology for assessing the performance of mutual funds has been developed,
known as the volatility indicator. This is defined as the average excess return on portfolio income. Next up
is Sharpe, which rewards the volatility indicator, which is the average excess return of the mutual fund
portfolio.

Michael C. Jensen (1967) This is an empirical study of mutual funds in this period 19551966 for 117
mutual funds. This result shows that these funds can not predict the guaranteed price enough to purchase
market policy. In this study, we neglect the freedom of expression of total management.
John McDonald (1974) studied the relationship between the mutual fund goal and its risk reward profile.
The survey concluded that, on average, fund managers appear to keep their portfolios within established
risks. The risk of a group of funds with the highest mutual fund risk is higher than the fund with the highest
risk of mutual funds.

Kumar (Ms Nidhi Walia and Dr (Ms) Ravi 2010) I am overburdened by the responsibility of giving
investors the best return while effectively using their abilities to properly allocate the timing. Mutual fund
portfolio management is a truly dynamic decision-making process that monitors the ongoing assessment
and demand of efficient fund managers.

31

Sanjay kumar Mishra and Manoj kumar (2011) The study here is how mutual fund investors
objectively influence their knowledge about information retrieval and processing behavior. In this article
they are objective knowledge i, e, what is actually stored in memory, subjective knowledge, i.e., how
individuals affect different things how information retrieval and processing information behaviour I tried
to prove what to do.

Deepak Agarwal (2011) is conducting test on the performance measurement of mutual fund created in
1992 by the development of capital markets and economic regulation in India. Here, mutual funds are a
major contributor to the globalization of financial markets. It flows to the economy. The survey revealed
that performance is influenced by people's savings and investment habits and grows at a level with the
loyalty and confidence of the manager.

Zhi Da, Penggge Goa and Ravi Jagannathan (2011) describe in this paper the impatient trading rules
for liquidity and mutual fund selection, as well as the trading and liquidity options of mutual funds whose
stock selection skills have not expired. Count other elements including prescriptions. Studies have shown
that past performance predicts that the future performance of stock market trading funds will be better.

Dr Sandeep Bansal, Dr. Deepak Garg and Dr. Sanjeev K Saini (2012) investigated the impact of
Sharpe and Treynor ratios on selected mutual fund schemes. This study is a single market index model
approach in which the actual mutual fund risk profile compares monthly or yearly liquidity, systematic and
non-systematic risks, and provides a complete fund analysis using different models Indicates that you can
compare correctly.

Dr. K. Veeraiah and Dr. A. Kishore Kumar (2014) conducted a comparative performance analysis of
selected India Mutual Fund schemes. This is a study comparing performance and performance of mutual
funds owned by India. According to the survey results, investment trusts are making naive investments.
Mutual funds have medium- and long-term investment options and prefer the appropriate investment
options by investors.
Professor V. Vanaja and Dr. R. R. R. Karrupasamy (2014) The research of mutual funds is considered
to be one of the best investments available to investors compared to other investors. Mutual funds, and
investors, can also buy stocks and bonds at much lower costs. This study shows that the majority of the
public selected for external research have implemented a variety of plans based on Sharp, Trenol, and
Jensen's performance measures.

Dr. Ashok Khurana and Kavitha Panjwani (2010) it's research on mutual funds is a mechanism to issue
resources to investors and integrate resources by investing funds in securities according to the purpose.
Investors need to know how high the risk to an individual asset is, and how much their contribution to the
total risk of the portfolio. All these can be found using specific keys in the statistics with the help of these
keys, which allows investors to analyse various mutual funds.
32

Vibha lamba (2014) is conducting analysis of portfolio management in India. The purpose of this survey
is to analyse the scope and importance of portfolio management in India. This should also focus on the
types and steps of portfolio management that provide the client with the greatest return and least risk for
investment by the portfolio manager.

S. Palani and P. Chilar Mohamed (2013) are conducting research on public sector and private sector
investment trusts in India. This shows the development of capital markets in countries that only demand
the possibility of industrial development. Economic growth is measured in the form of GDP or NNP for
one of the domestic purposes.

Dr. S. Vasantha, Uma Maheshwari and K Subhashini (2016) are evaluating the performance of certain
open-ended equity-based mutual funds in India. The main research of this 0study is to assess the
performance of open-ended equity diversification mutual funds. The main objectives of this study are the
HDFC Top 200 Fund (g), the ICICI Prudential Top 200 (g), and the Mutual Fund, for 60 months from
January 2008 to December 2012.

Sowmiya G (2014) studies the performance evaluation of domestic mutual fund. The main purpose of this
study is to know the basic concept of mutual fund terms in listed and unlisted limited companies. Then
analyze the performance and growth of the selected mutual fund scheme along with its returns. It also
identifies differences in returns and makes recommendations based on analysis.

Megha Pandey (2014) is conducting comparative studies of the performance of mutual funds and index
funds actively managed in India. Active management funds always overlap with passive management
funds or indexes. In this study, funds deal with a comparative analysis between the 0performance of both
actively and passively managed funds. The T-test has been applied to this study and has been shown to
generate more revenue through actively managed funds.

Grinblatt and Titman (1989) have evaluated that portfolio performance has attracted a great deal of
interest in mutual funds in the academic world. A variety of valuation techniques have been proposed to
implement the ability of a professional portfolio manager to generate anomalous returns. In this survey
they found negative performance or no performance for the average mutual fund.

33

CHAPTER-5
RESEARCH METHODOLOGY
 34

5.1 Statement of the problem

Today, mutual funds are one of the favourable investment methods available to investors. The statement in
question mainly identifies higher performing mutual funds in three different categories, and considers the
various other parameters such as returns, NAV, risk analysis and individual investor perceptions of
investing in mutual funds to do.

5.2 Need of the study

Mutual fund is one of the most desirable investments for small investors because they offer the opportunity
to invest in relatively low-cost, diverse and professionally managed investments. The recent trend in the
mutual fund industry is the active expansion of foreign investment fund companies and the reduction of
state-owned banks and small private companies. The growth and development of various investment fund
products in Indian capital markets has proven to be one of the most catalytic tools to promote capital
market growth.

5.3 Objectives of the Study

1. To study about the various mutual fund schemes are available in the market.

2. To analyse risk and returns of the different schemes of mutual funds.

3. Evaluate the performance of different funds based on different performance measurement ratios
such as sharp ratio, standard deviation, beta and R-square
4. To analyse perception of investors towards mutual funds.
5.4 Scope of study

The survey was conducted over a six-week period, the main focus of which was to track the performance
of the mutual fund company. As different companies appear on the same theme in the same season, it is
essential to constantly improve business performance to survive the competition and provide the largest
capital appreciation.

35

5.5 Research Method

Research methodology is a scientific and systematic problem-solving method. It involves choosing a

variety of methods and techniques, mostly from the studies carried out.

1. For the first part of the analysis, the return on funds, I took five different types of funds from
similar fund companies, comparing the returns for six months, three years and five years.

2. The second part of the analysis, the risk profile, I compared the standard deviation of five funds,
the sharp ratios, β, α and r square.
3. Funding comparisons are made using bar graphs, so conclusions can be drawn after analysing these
graphs.

5.6 Limitations of study

1. The limited information in the secondary survey report is a fundamental obstacle in finding out
the true consequences of investing in a mutual fund system by investors.
2. The study is just limited to a period of 6 weeks

5.7 Sampling technique:

1. Sample size- 30 respondents

2. Sampling method- Convenience sampling methods.

 36

CHAPTER-6
COMPARATIVE ANALYSIS
 37

6.1 INTRODUCTION

Separate revenues should not be viewed as the basis for measuring the performance of mutual fund
programs. Also, for a fund manager, you have to take risks because different funds have different risk
levels.

The risks associated with a fund are generally defined as the volatility or volatility of the revenue generated
by the fund. The greater the change in the fund's income over a given period, the greater the risk associated
with the fund's income. These fluctuations are reflected in the revenue generated by the two main outcome
funds. First, the general market volatility that affects all securities in the market is called market risk or
system risk. Second, certain securities in the fund portfolio are called non-systemic risk volatility. The total
risk of a particular fund is the sum of the two funds and is measured as the standard deviation of the fund's
earnings.

To determine the risk-adjusted return on a portfolio, some well-known writers have been trying to develop
comprehensive performance indicators that assess portfolios by comparing alternative portfolios of specific
risk levels since the 1960s. possible. But first you have to understand all the factors used to describe the
ratios, such as Beta, Traynor, Sharp, and Jensne.

6.2 Factors used to describe the ratios

1.NAV

The net asset value (NAV) is the market value (including cash) of all shares held in the portfolio divided
by the total number of issued units minus debt. Therefore, the net asset value of a mutual fund unit is more
than "book value".
2.BETA.

It measures the risk of the stock market or the fund. If the ratio of the beta 1 is exceeded, the stock market
change of the fund is more sensitive than the general fund. The trial may also be negative. In other words,
the value of the fund on the other side of the public market.

The trial measures the sensitivity of the fund's returns to normal market movements. It also measures the
volatility of the fund against the overall market volatility. Market Beta is set to 1.00. 1.00 or higher is less
stable than the market, and the trial version is less than 1.00 and less volatile.

The trial measures the volatility of the fund's value against the volatility of the fund's base value. The beta
factor represents a change in the fund's value when the value of the index changes by 1 percentage point.

38
88

Cov (rp, rb)=covariance between return of fund and return of benchmark index.

Var (rp) = variance of benchmark index

3.STANDARD DEVIATION

Measure the tendency of data to propagate. In this way, accountants can make important conclusions from
historical data. The standard deviation is defined as S and sigma reads as follows:

where x1 is the mean

4.SHARP RATIO.

Sharp (1966) developed a composite index very similar to the Trainor measurements discussed later. The
only difference is that the standard deviation is used instead of the trial version to measure the portfolio
risk. In other words, we expect to use system risk as well as overall portfolio risk.
The high positive Sharpe ratio indicates that the fund has excellent risk-adjusted performance, while the low
negative Sharpe ratio indicates that the performance is unfavorable. If the Sharp number was positive the
risk has been rewarded, and if the number is negative the rate of return will be lower than the risk-free rate.

σp= Standard deviation of the portfolio.

Rp= Return of the portfolio.

Rf= Risk free rate.

39

5.TREYNOR0RATE

Treynor (1965) developed the first comprehensive index of portfolio performance. Measure the portfolio
risk of the beta version and calculate the market risk premium of the portfolio. This ratio compensates for
volatility to show risk adjusted returns per market risk unit for a particular scenario. If the market becomes
unstable, programs with high Treynor rates will be significantly affected. If the market is strong, programs
with high Treynor ratios (such as stock plans) will enjoy a premium, and if the market is weak, it will have
a negative impact. Regardless of whether the market is strong or weak, low Treynor ratios such as bond
funds are not significantly affected.

Rp= Portfolios actual return during a specified time period Rf= Risk
free rate of return during the same period βp = beta of the portfolio
All hedging investors want to maximize this value. Trainsor's high and positive indicators show good
performance of risk-adjusted funds, but negative financial indicators show negative performance. The
problem with Sharp / Trainer ratios when assessing risk adjusted returns is that short-term risk and
volatility are the same. Therefore, these methods may not apply to assessing the comparative advantage of
long-term investments.
 40

6.3 Mutual Funds vs. Stocks

Professional Management

Leveraging the expertise and knowledge of a mutual fund expert to is one of the primary reasons why
individuals consider investing in mutual funds. Investment in shares without prior experience or knowledge
about the working of the financial markets can be quite disastrous. It could even easily drain your capital.
Hence, experts often advise those new to the investing world to invest in mutual funds via a fund manager.

Save tax on mutual fund

When it comes to ELSS mutual funds, Section 80C of the Income Tax Act, 1961, offers tax deduction on
investments up to Rs1.5 lakh towards such schemes. Individuals and HUF can use this deduction to reduce
their tax liabilities. You can save up to Rs46,800 by investing in ELSS mutual funds. This is one way you
save tax on mutual fund investments.

Disciplined investment

Another major advantage of investing in mutual funds is financial discipline, which you get to learn by
investing through the SIP (Systematic Investment Plan). In an SIP, the investor is required to invest a fixed
amount periodically. This automated form of investing in a mutual fund requires an individual to decide the
quantum of payment and the frequency of the investment at the start of the SIP investment tenure.
On the other hand, investing in stocks this way can be quite tricky as each transaction would need to be
timed and initiated by the investor himself.
Cost of Investing

Unlike stocks, which you can buy individually, actively managed mutual funds demand a small fee to be
paid to the fund manager(s). However, one often forgets the concept of ‘economies of scale’ that tips their
weight in the favour of mutual funds. Active management of funds surely requires extra capital from the
investor’s pockets, but due to their large size, mutual funds only ask an insignificant fraction of the
brokerage charge from an individual shareholder.

Investment Horizon

Mutual fund investments often require a tenure of 5-7 years or more to generate considerate returns. This is
because these investment vehicles have a long-term growth trajectory. On the other hand, investing in stocks
can fetch you quick and substantial returns if you choose the right stocks and time the buying and selling
part correctly.

Whether you decide to invest in mutual funds or stocks entirely depends on your knowledge and expertise of
the market and the amount of time and effort you are willing to spare. Mutual funds can prove to be a great
investment instrument if you are an amateur and aim for steady returns. However, if you are a stock market
guru with ample time on your hands, investing in stocks is a better choice. 41

6.3.1 Mutual Fund Versus Bank FD`s

Returns 
Fixed deposits offer individuals a predetermined rate of interest over a specific period of time. This means
that any money placed in a fixed deposit will only accrue a fixed amount of returns over a certain duration.
However, an individual investing in mutual funds could potentially earn much higher returns since any
investment made is based entirely on the market performance of the stocks in his or her portfolio.

Risk
Fixed deposits are essentially zero-risk investments, since they individuals already know beforehand what
their returns are going to be over time. Since the rate of interest does not vary on fixed deposits, nor is it
susceptible to market changes or volatility, investors are guaranteed a fixed return on their investment.
Mutual funds on the other hand are fairly susceptible to change in the market, even though the amount of
risk involved is spread over a range of stocks within the fund. Due to this, an investor could stand to gain
more if market conditions are favourable, or could earn considerably less if conditions move in the opposite
direction.

Costs 
Investing in mutual funds come with certain costs or expenses in the form of fees paid to fund managers
who take care of an investor’s portfolio. Individuals investing in fixed deposits on the other hand do not
incur such expenses since no intermediaries are required to handle the investment process.
Premature Withdrawal 
Individuals who wish to make a premature withdrawal on their fixed deposits will, in all probability, be
required to pay a penalty for doing so. Besides the penalty levied, the individual would also forfeit a portion
of any returns he or she was expecting. In the case of mutual funds, premature withdrawals are permitted as
long as the minimum holding period has been completed, although an exit load charge of 1% of the fund
amount will be levied if a withdrawal takes place before the expiration of the holding period.

Taxation 
So far as equity funds and hybrid funds are concerned, they will be regarded as short-term if the holding
period is under 12 months and long-term if the holding period is over 12 months. In case of debt funds, a
holding period of under 36 months will mean that they are short-term while a holding period of 36 months or
more will mean that they are long-term. Long-term capital gains on equity mutual funds and hybrid mutual
funds over Rs.1 lakh will be subject to tax at 10%, while short-term capital gains will attract 15%. In case of
debt funds, the long-term capital gains will be 20% after indexation, while the short-term capital gains will

42
be as per the tax slab. In the case of fixed deposits, any interest an individual earns on his or her investment
is taxable depending on which tax slab the individual comes under.
From the information given above, it can be ascertained that both forms of investment have their own
advantages and disadvantages. Hence, it is advisable for individuals looking to invest in either one, to spend
a fair amount of time gathering information in order to help them make an informed decision.

6.3.2 Mutual Funds and Real Estate

The difference between mutual funds and real estate can be understood by comparing the following factors:

Risk Factor

Real estate is a safer option than mutual fund. As mutual funds are linked to the market, a fall in Sensex
prices could have a direct impact on your mutual funds. If the Sensex falls suddenly, your fund could also
drop below the purchasing price of the fund, resulting in a loss. However, investments in real estate would
not incur such losses and you will be able to recover the amount invested in the beginning with little profit.

Liquidity

Liquidity refers to the speed at which you can recover your money in case you want to sell off your property
or redeem your mutual funds. Mutual funds offer higher liquidity as compared to real estate. Selling and
redemption of mutual funds takes a maximum of up to seven working days, meanwhile selling off property
could prove to be herculean at times. You may be required to wait for days to months to find a suitable buyer
for your property.

Investment

 Investing in mutual funds is a far simpler and uncomplicated process when compared to investing in real
estate. If you are investing in mutual funds, you will be required to pay a monthly SIP (Systematic
Investment Plan) in the form of an instalment. The installment could be as low as Rs.2,000 and can be easily
arranged to be deducted from your bank account every month until maturity of the fund.

Meanwhile, if you are investing in property, you would require a huge lump sum owing to the highly
competitive real estate prices, ranging from lakhs to crores.

Gestation Period

 Both real estate and mutual funds are considered to be long-term investments. In this regard, both seem to
fare equally well. Just as mutual funds generate higher profits if forgotten for a few years, property purchase
also proves worthwhile only if kept for a longer duration.

43

Mutual funds offer huge profits, allowing investors the opportunity to earn up to millions using the concept
of compound interest. Although both types of investment exhibit the same nature, profits from mutual funds
are far greater than from real estate.

6.3.3 Mutual Funds Vs Bonds

1. Credit rating of a bond is an indication of the inherent default risk in the investment. However, unlike
fixed deposits, bonds and debentures are transferable securities.

2. If security does not get traded in the market, then the liquidity remains on paper. In this respect an open-
end mutual fund scheme offering continuous sale / repurchase option is superior.

3. There could be capital gain / capital loss to investor in case of an early exit, because the investment is
subject to market risk. This is normally less in Mutual fund as the investment is made in basket of funds and
hence your investment gets diversified

6.3.4 Mutual Fund Vs Gold Investments

Traditionally, investing in gold has been one of the most preferred options in India. Investors believe that
gold can not only act as an investment, but also as a commodity that can be used when auspicious occasions
such as marriages and festivals happen in the family. While this is true, we also encourage looking at mutual
funds due to the following advantages-

1. There is a very high risk of loss in storing physical gold. However, there is no risk in having gold ETFs.
ETFs are open-ended mutual fund schemes that invest in gold bullion of 99.5% purity.

2. While you can start investing in mutual funds with a minimum of Rs. 500, investment amount in gold
depends on the rate of gold on the day on which you are trading.

3. There may not be any negotiating capacity while liquidating gold.

4. People often liquidate gold as a last resort when they don’t have other investments to bank on. There are
no withdrawal charges applied.

44

6.3.5 Mutual Funds vs. LIC investments

LIC offers insurance policies whose primary purpose is to provide you and your family coverage in case of
any illness or death. The purpose of mutual funds is to meet your financial planning objectives. If you buy
insurance policies with savings or investment element in them, you may end up with very small insurance
cover. This defeats the whole purpose of purchasing an insurance policy.

Life insurance policies are primarily an insurance product, and one should not consider it an investment
product. Insurance aims to mitigate the risk of future uncertainties, and clubbing insurance and investments
together may not be a desirable option for investors. Instead, one may choose for pure term insurance policy
and invest the balance insurance premium saved in mutual funds. 

Further, while the insurance premium paid may provide an additional tax benefit to the policyholder, the
potential of higher returns with mutual funds may well compensate for such opportunity cost. The investor
may also opt for Equity Linked Savings Scheme (ELSS) to avail tax benefit on mutual fund investments as
well under Section 80C. 

While mutual funds may be a great partner in the investment journey of investors, the final selection of
investment products should be based on various investment considerations, as discussed above. 

Note: The tax rates mentioned in the article are for illustrative purposes only, and are updated as per the
Union Budget 2020 passed by the Parliament. The tax rates for capital gains will be as per the tax laws
applicable on the date of redemption/ sale and not on the date of investment.
6.3.6 Mutual Funds vs. ULIPs

Mutual Funds and ULIPs contest for the same pie of market where they target retail investors and invest in
market-linked plans. In the large-cap and mid-cap categories, there isn’t much to choose between the
two. There are lower expense ratios in debt mutual funds, which range from 0.28% to 1.48% whereas, ULIP
debt fund options attract fund management charges of 0.65% to 1.5%. Comparing mutual funds and ULIPs
purely on the basis of monetary returns may not be appropriate. The fee of ULIPs includes mortality charges,
management fee, and administrative charges. You may consider ULIPs only if the primary need is for
insurance coverage.

45

6.3.7 Mutual Fund vs PPF

Public Provident Fund (PPF) account can be opened at various nationalised banks and post offices and
comes with a tenure of 15 years. Contributions made in such an account is eligible for tax deduction under
Section 80C of the Income Tax Act, 1961. As against the market-linked returns provided by mutual funds,
PPF delivers a fixed rate of interest on the outstanding balance. 

The rate of interest is notified by the Govt. of India, and the current interest rate as applicable for the quarter
of January 2020 to March 2020 is 7.9% per annum. While the interest on PPF account is also exempt, the
returns from mutual funds are taxed as per the rates applicable. However, the guaranteed nature of returns in
PPF accounts limits the wealth creation potential of such accounts, which is not the case with mutual funds.
With long term investment horizon as in PPF accounts, ELSS funds may be a better investment product
aiming at wealth creation

6.4 Comparison between companies in Mutual Fund Industry

The main purpose of conducting intercompany analysis.

The following are those categories

1. Equity Diversified Funds.

2. Equity0large-cap
 3. Equity0mid and small-cap

A comparative analysis of the above categories is provided for comparative analysis because two
parameters are considered:

• Fund return

• Risk Profile

46

1. STOCK/EQUITY DIVERSIFICATION FUND:

These are market funds that invest in industries, asset classes and financial products to provide investors
with the best return on a diversified portfolio.

Below are some funds in the market of this category.

1. Reliance equity oppor – RP(G)

2. Birla SL India GenNext(G)

3. HDFC Equity Fund(G)

4. Kotak Opportunities Fund – Regular(G)

5. Taurus Star Share(G)

Table no 6.4.1: Fund returns of Equity Diversified Funds.

Fund return Reliance equity Birla SL HDFC Kotak Taurus Star

oppor Equity fund opportunities Share (G)
(in ‘000 cr.) India
- RP (G) Fund
GenNext(G) (G)
Regular (G)
6 months 9.1 5.8 9.4 10 8.3
1 year 19.9 28.5 29.6 30.2 22.5
3 years 17.7 24.9 17.1 23.1 14.7
 5 years 16.3 22 16.3 19.3 14.2

fund return
35
30
25
20
15
10
5
0
Reliance equity Birla SL India HDFC Equity fund Kotak Taurus Star Share
oppor - RP (G) GenNext(G) (G ) opportunities (G )
Fund Regular (G)

6 months 1 year 3 years 5 years

Graph no 6.4.1: graph showing Equity Diversified Fund Returns

47

Analysis

 The past six months of the Kotak Opportunity Fund has been very strong in the past six months,
showing that the fund has the ability to withstand market ups and downs.
 9.1% of revenue in 6 months.
 From last one-year Kotak opportunities fund is performing well by having returns of 30.2% and it
is showing stable returns and by having returns of 29.6% HDFC equity fund is in second place.
 Last but not least from the horizon which is considered as very important from the perspective of
opportunities Fund – regular (G) outperformed in the category. It is giving highest returns of 22%
and
 19.3% Reliance Equity Opportunities - RP(GP) 17.3%
 In diversified mutual funds Kotak opportunities Fund – Regular (G) is giving outstanding
performance, in last year Birla SL India GenNext (G) is having high return compared to all and
Reliance equity opportunities-RP (G) is having stable return

Risk profile

Table no 6.4.2: risk profile of equity diversified fund

 Reliance equity Birla SL HDFC Kotak Taurus Star
oppor Equity fund opportunities Share (G)
India
- RP (G) Fund
GenNext (G) (G)
Regular (G)
Standard 4.739901546 10.025633 8.409914784 8.41526391 5.826591342
deviation
Sharpe 2.052785254 1.399412772 1.406672993 1.70879964 1.485431102
Beta 0.716100474 1.8042146 1.302265994 1.25878773 0.950553718
Alpha 4.498886037 3.240796592 -0.77593482 2.19493474 0.523012939
R-Square 0.639127575 0.637415339 0,749329057 0.72385108 0.749762165

48

Risk Analysis
12

10

0
Reliance equity Birla SL India HDFC Equity fund Kotak Taurus Star Share
-2 oppor - RP (G) GenNext (G) (G) opportunities (G)
Fund Regular (G)

Standard deviation Sharpe Beta Alpha R-Square

Graph no 6.4.2: graph showing risk profile of equity diversified fund

Analysis and Interpretation:

• Since standard deviation is an indicator of the change in average return on earnings, it is considered
a direct measure of risk. Birla SL India Gen Next Fund has a high standard deviation. It shows that the
fund itself is more aggressive than other funds.
• Sharp proportions, this means that the fund can generate a return per unit of risk. Therefore, the
higher the ratio, the better. Therefore, according to this standard, Birla SL India GenNext (G) will be the
winner.

• Beta, which shows the link between fund returns and market rates, is again a measure of volatility
or risk. Because Birla SL India Gen Next funds have the highest beta, it is one, i.e., greater than 1.8, they
tend to be inherently aggressive or unstable.

• Alpha - Measuring excess returns above market returns Alpha is a measure of risk. For example, a
high alpha value is a good signal for money. If the funds alpha value is increased by 10, it means that the
fund's return rate exceeds 10% compared to the benchmark or market. Therefore, Reliance Equity
Opportunity-RP (G) is the winner in this field, I am 1.50%.

• R-Squared explains that change in earnings due to market volatility is good measure of risk.
However, the fact that r 2 is high means that many changes are caused by market sentiment and
fundamentals. Therefore, moderate r-squared values in the range of 65-85% are considered good.

49

NAV Details of Funds

Table no 6.4.3 : NAV equity diversified funds

FUND NAV
Reliance Equity opportunities Fund (G) 82.47
Birla SL Pure Value Fund (G) 54.31660
HDFC Equity Fund (G) 557.9680
Kotak Opportunities Fund- regular (G) 106.47900
UTI Equity Fund (G) 115.23290

NAV
600
500
400
300
200
100
0
Reliance Birla SL Pure HDFC Equity Kotak UTI Equity
FUND Equity Value Fund Fund (G) Opportunities Fund (G)
opportunities (G) Fund- regular
Fund (G) (G)
Graph no 6.4.3: graph showing NAV details of equity diversified funds

Conclusion:

After considering all three parameters above, the Birla SL Pure Value Fund (G) takes into account the
underlying company's assessment, unlike the typical opposite fund focusing on flavour stocks, and it is the
company's true Determine that you should have an assessment of and then decide whether to invest in it.

50

2. EQUITY LARGE CAP MUTUAL FUND

These are mainly funds to invest in large stocks. These are stocks with solid results and sound
fundamentals. Because these are low risk stocks, they generally have lower growth rates than small and
medium stocks.

Below are the top performance funds in this category.

1. Reliance top 200 Fund-Rp

2. SBI blue chip fund (G)

3. Franklin (I) blue chip-Direct(G)

4. Birla SL Frontline equity- Direct (G)

5. UTI Equity Fund (G)

Fund Returns:
Table no 6.4.4: Fund Return of Large Cap Mutual funds
Fund returns Reliance top SBI blue Franklin (I) Birla SL UTI Equity
200 fund-RP Chip Fund Blue chip-
(in ‘000cr.) frontline Fund (G)
(G)
(G) Dirt (G) Equity (G)

3 months 12.3 9.4 8 9 8.7

1 year 25.8 20.7 19.6 24.1 17.4

3 years 19.7 21 17.6 18.5 16.6

5 years 18.2 20.2 0 19 16.4

Graph no. 6.4.4 showing fund returns of Large Cap Mutual Funds

51

Analysis and Interpretation:

• In the last 3 months, the Top 200 Fund-RP (G) is the winner because it has dropped to only
(12.3%) compared to the highest decline of Franklin (I) Blue Tip Dart (G). (8)

• The top 200 Funds-RP (G) in the top of the chart tops the chart with a top return of 25.8% when
compared to the lowest 17.4% of UTI Equity Funds (G), the hugeness of the recession in the annual
category I was hit by

• SBI Blue chip Fund (G) selects the chart showing the highest 21% return in the 3-year category,
and Reliance Top 200 Fund- RP (G) Equity shows a return of 19.7%.

• The top of the 5-year category SBI Blue Chip Fund (G) shows a return of 20.2%, the largest equity
remains in third place, showing a return of 18.2%.
Risk Analysis:

Table no6.4.5: Risk profile of Large Cap Mutual funds

Reliance top SBI blue Franklin (I) Birla SL UTI Equity
200 fund-RP Chip Fund Blue chip- frontline Fund (G)
(G) (G)
Dirt (G) Equity (G)

Standard 5.5455688 5.62635168 9.07671012 6.29735394 4.07298007

deviation
Sharpe 2.2955264 2.05372871 0.55416554 1.80710820 2.08815153
Beta 0.9826809 0.69346843 0.94937637 1.03941662 0.55984411
Alpha 3.8809576 6.24649914 0.01729273 2.02005331 4.21939329
R -Squared 0.799773 0.47791844 0.28961372 0.67994608 0,53297741

Risk Analysis
10
9
8
7
6
5
4
3
2
1
0
Reliance top 200 SBI blue Chip Franklin (I) Birla SL frontline UTI Equity Fund
fund-RP (G) Fund (G) Bluechip- Dirt (G) Equity (G) ( G)
Standard deviation Sharpe Beta Alpha R -Squared

Graph no 6.4.5: graph showing Risk Analysis of large capital mutual funds

52

ANALYSIS AND INTERPRETATION:

• With standard deviation, Franklin (I) Blue Chip-Dirt (G) has the highest risk in this category
compared to the lowest risk UTI equity fund (G) 4.072980072.

• Franklin (I) Blue Chip Dart (G) has one of the lowest Sharpe ratios, and Reliance Stop 200 Fund-
RP (G) 2.2955264 has the highest risk per unit return0.55416554.

• Birla SL Forefront Equity-Direct (G) has the highest 1.094162623 in this category to show the
most aggressive character. The beta is 1 or more, which means the fund market is very sensitive. Thus,
whenever the stock0market goes down or goes up, the fund goes down or goes up higher than the market.
The UTI Equity Fund (G) has the lowest beta of 0.559844115 in this category, but it also means that it has
the lowest risk profile in that category.
• According to the alpha indicator of risk, the SBI Blue Chip Fund (G) is the best fund in this area
and brings an excess return over 6.24% of the market. Meanwhile, Franklin (I) Blue TipDart (G) produces
0.017292737 alpha returns, which was one of the least alpha generating funds in this method.

NAV details of funds as on 25 April 2018

Table no 6.4.6 : NAV of large cap mutual funds

FUND NAV
Reliance top 200 fund- RP(G) 28.367
SBI Bluechip fund (G) 34.409
Franklin (I) Bluechip (G) 431.429
Birla SL Frontline Equity- dirt (G) 196.71
UTI Equity Fund (G) 115.232

NAV
500
450
400
350
300
250
200
150
100
50
0
FUND Reliance top SBI Bluechip Franklin (I) Birla SL UTI Equity
200 fund - fund (G) Bluechip (G) Frontline Fund (G)
RP(G) Equity- dirt
(G )

Graph no 6.4.6: graph showing NAV details of Large Cap funds

53

CONCLUSION:

• The fund’s investment approach underwent a change in august 2011 to allow manager Sailesh raj
Bhan more freedom. Previously it was a pure play large-cap strategy known as equity advantage,
with the portfolio’s sector weightings firmly aligned with those of the index, clearly executing such
a strategy constrained the manager.
• Though the fund delivered a staggering 41% return in 2012, putting it in the top 5 of the categories
of that year, over the past 8 calendar years, it has also seen its returns dip below the category
average.
 • The investment universe covers the top 200 companies by market cap, allowing investment in
small/mid-caps. The weighting of a few sectors may align with those of the BSE 200 based on
Bhan’s view on those sectors, but he is willing to make bigger sector deviation.
• Downside risk was also the lowest among the funds, as the fund did not have high exposure to a
single share.

3. EQUITY SMALL AND MID CAP:

These equity fund that invests mainly in medium sized and small cap stocks, with potential growth and
higher risk than large-cap stocks.

Fund returns:

Table no 6.4.7: fund returns of small and mid-cap funds

Fund returns Reliance Franklin Sundaram DSP-BR UTI Mid
(in ‘000cr.) Mid and Indian Prima Select small and Cap(G)
Small Cap Fund (G) Midcap –RP Mid-Cap-RP
fund (G) (G) (G)
3 months 13.1 16.5 15.6 15.6 12.4
1 year 32.5 31.3 39.2 39.2 26.8
3 years 28.4 29.6 30.7 30.7 28.6
5 years 23.6 26.8 24.1 24.1 25.7

54

Fund Return
45
40
35
30
25
20
15
10
5
0
Fund returns Reliance Mid Franklin Indian Sundaram DSP-BR small UTI Mid
(in ‘000cr. ) and Small Cap Prima Fund Select Midcap and Mid-Cap- Cap(G)
fund (G) (G ) –RP (G) RP (G)
Series1 Series2 Series3 Series4 Series5
Graph no 6.4.7: graph showing fund return of small and mid-cap funds

Analysis and Interpretation:

• Winning as the Franklin India Prima Foundation (G) fell below the minimum, both Sundaram
Select Midcap-RP (G) 13.9 and Reliance Mid and Small Cap Fund (G) 13.1 fell below the minimum,
value. That means that these funds have not been able for withstand the increase and decrease of the Indian
stock market in the past 3months compared to other good performing funds during the same period.

• Winners who experienced huge recession in the one-year category are DSP-BR Small and Midcap-
RP (G) return the highest 39.2%, Trusted Mid and Small Cap Fund (G) get 32.5% I stayed in the 4th
position. On the other hand, funds such as Franklin Indian Prima Fund (G) and UTI Midcap (G) have had
the lowest returns of 31.3% and 26.8% over the past years.

• In three-year, category, which is one of the most preferable choices for individual investors, the
Reliance Mians Small Cap Fund (G) is 10,3%, while the random selection mid-cap Cap (RP) shows a
31.9% return Indicates a return.

• Franklin Indy Apria Fund (G) has a 26.8% best return in the five-year category, Sundaram has a
26.0% return on Mid cap-RP (G), and Reliance Mid and Small has repeated. Cap funds (G) giving a 23.6
return is not a bad return.

55

RISK ANALYSIS

Table no 6.4.8: Risk analysis of small and mid-cap funds

Reliance Franklin Sundaram DSP-BR UTI Mid
Mid and Indian Prima Select small and Cap(G)
Small Cap Fund (G) Midcap –RP Mid-Cap-RP
fund (G) (G) (G)
Standard 8.36540495 6.63149053 9.40403282 10.0043323 7.41366980
deviation
Sharpe 2.91079752 3.928226977 2.841865879 2.733815604 3.146215114
Beta 0.1110987 0.89990224 0.13017934 1.05111034 0.51144664
Alpha 17.2350999 10.6639902 19.7265275 1.52153644 7.56396293
R squared 0.18651754 0.59432313 0.16872585 0.72647434 0.47700965

Risk Analysis
25

20

15

10

0
Reliance Mid and Franklin Indian Sundaram Select DSP-BR small and UTI Mid Cap(G)
Small Cap fund Prima Fund (G) Midcap –RP (G) Mid-Cap-RP (G)
(G)

Standard deviation Sharpe Beta Alpha R squared

Graph no 6.4.8: graph showing risk analysis of small and mid-cap funds

Analysis and Interpretation:

• The risk of DSP-BR small and medium RP(G) is the highest standard deviation, this is the most
dangerous fund of its kind, and the second is the Sundaram with standard. It is a ram mid cap RP (G).
Deviation 9.404%. The fund with the lowest standard deviation is from Franklin India. prima Fund (G) has
a standard deviation of 6.6314%.

• All funds in this category represent negative ratios, the fund cannot prove that its investment in
risky assets is reasonable. 3.9282 proves this risk. The trusted mid cap and small cap funds are in third
place with 2.910 justifying their risk. DSP-BR Small and Mid-Cap-RP (G) has the lowest ratio of 2.733
and shows its aggressive nature.

56

• DSP-BR Small and Mid-Cap-RP (G) has the highest beta of 1.05 in this category. In other words,
the most sensitive market funds in this category, Reliance's mid and small cap funds (G), means less
market sensitivity and thus lower risk.

• Sundaram chooses midcap-RP (G) with the largest value of alpha in the category. It gives a
19.726% excess return over the benchmark. The trusted medium and small cap funds (G) are giving a
17.23 percent deficit return over their benchmarks the second-best alpha.
• Because all R squared values are less than 0.7, all boxes in this category are better squared. This
means that all funds will benefit from professional management. -RP(G) is 0.726, which is the best R-
squared value in this category. NAV details of funds as of April 26, 2018

FUND NAV
Reliance Mid and Small Cap fund(G) 43.1316
Franklin India Prima Fund(G) 895.1745
Sundaram Select Midcap-RP (G) 471.7772
DSP- BR Small and Mid-Cap-RP (G) 51.485
UTI Mid Cap (G) 99.3337
Table no 6.4. 9: NAV details of small and midcap funds

Graph no 6.4.9: NAV details of small and mi-cap funds

57

CONCLUSION:

 The DSP-BR small and mid-cap- RP (G) strategy allows Sambre to play to play his strength, which
makes him an apt replacement for Shah. He is backed by a high calibre team, and this adds to our
conviction
 The investment process provides growth bias. In general, managers invest in stocks that can grow
into cheap stocks. They are looking for businesses with scalable business that they think can double
their profits in three to four years.
 For instance, factors such as market sentiment, news flow and momentum formed the crux of
shah’s investment approach, which often led to above-average turnover in the DSP- BR small and
midcap-RP(G)
 R. janakiraman explores the high-quality middle class with a sustainable economic outlook,
predictable business, steady profit growth, and a reasonably high return on equity through the low
balance sheet risk of Franklin India Pima Fund (G).

58
 CHAPTER 7

DATA ANALYSIS AND INTERPRETATION

59

INVESTOR AWARENESS

Table no 7.1 : Do you invest in mutual fund?

Particulars No of respondents Percentage
 Yes 20 67%
No 10 33%
Total 30 100%

Analysis:

As per the above table it is clear that while 67% of respondents are investing in mutual funds, 33% of
respondents are not investing in mutual funds.

INVEST IN MUTUAL FUND

Yes No

33%

67%

Graph no 7.1: Graph is showing no of respondents who is invest in mutual funds

Interpretation:

As per the above graph it can be interpreted that most respondents are investing in mutual funds. That is
67%. This still indicates that mutual fund products are to be used by a large pool of investors

60

Table no 7.2 : The age group under you belong to

Age group No of investors Percentage
 21-30 4 13%
31-40 10 34%
41-50 9 30%
51-60 7 23%
Total 30 100%

Analysis:

As in the above table, the majority of respondents can be analysed to be in the 31-40 years age group, i.e.,
34%. The second most common investor is the age group of 41 to 50 years, i.e., 30%, the age group of 51
to 60 years has 23% investors and the lowest investor of 13% is 21 to 30 years It is an age group.

AGE GROUP
21-31 31-40 41-50 51-60

13%
23%

34%

30%

Graph no 7.2 : graph showing age group of the0respondents.

Interpretation:
As per the above graph, it can be interpreted the most of the respondents are corresponds to the age group
of 31-40 and least of the investors are falling under the age group of 21-30. It means that working class
individuals are more lure towards investments than young individuals.

61
Table no 7.3 : Occupation of the investors:
Occupation No of investors Percentage
Business 7 23%
Professional 13 44%
Salaried 10 33%
Total 30 100%

Analysis:

From the analysis out of 30 respondents as per above table 44% investors are professionals like doctor, CA
and others. 33% investors are of salaried persons and 23% investors are business persons.

NO OF INVESTORS
Business Professional Salaried

23%
33%

44%

Graph no 7.3: graph showing occupation of investors

Interpretation:

From the above graph, it can be interpreted that specialists such as doctors, CPAs and consultants are
inclined to invest in mutual funds. It is followed by salary individuals.

62
Table no 7.4 : Why do you invest in mutual funds?
 Particulars No of respondents Percentage
Safety 9 30%
Good return 7 23%
Tax benefit 4 13%
Capital appreciation 2 7%
Risk diversification 8 27%
Total 30 100%

Analysis:

As per the above table, it is analysed that 30% of respondents invest in mutual funds for purpose of safety,
23% of respondents are invest for good returns, 13% of the respondents invest to get tax benefit, 7% of the
respondents are for capital appreciation and 27% respondents for risk diversification.

PURPOSE OF INVESTMENT
Safety Good return Tax benefit Capital appreciation Risk diversification

27%
30%

7%

13% 23%

Graph no 7.4 : graph showing purpose of investment

Interpretation:

From the above graph, it can be interpreted that safety and risk diversification are key considerations for
investing in mutual funds. Capital appreciation is found to be least considered for making investment.

63

Table no 7.5 : What is your income?

Income level No of respondents Percentage

1 lakh 8 27%
2-4 lakh 11 36%
4-5 lakh 6 20%
More than 5 lakh 5 17%
Total 30 100%

Analysis:

As per the above table, it is analysed that 27% of the investors have income below 1lakh, 36% of the
respondents have income between 2-4 lakh, 20% of the respondents have income between 4-5 lakh and
17% of the respondents are of above 5 lakh.

INCOME LEVEL OF INVESTORS

1 lakh 2-4 lakh 4-5 lakh More than 5 lakh

17%
27%

20%

36%

Graph no 7.5: graph showing income level of investors.

Interpretation:

From the above graph it can be interpreted that most of the respondents belonging to the income above 2-4
lakhs. These investors are interested in mutual funds because it is their primary financial goal.

64
Table no 7.6 : what is Duration of your investment:
Duration No of investors Percentage
0-1 Year 10 33%
1-2 Year 13 43%
2-4 Year 5 17%
More than 4 years 2 7%
Total 30 100%

Analysis:

As per the above table, it can be analysed that 33% of the respondents are interested to invest between 0-1
year, 43% of the respondents are interested to invest between the duration of 1-2 years, 17% of the
respondents are interested to invest between duration of 2-4 years and 7% of the respondents are interested
in investing more than 5 years.

duration of investment

7%

17%
33%

43%

0-1 Year 1-2 Year 2-4 Year More than 4 year

Graph no 7.6 : graph showing duration of investment

Interpretation:

From the above graph, it can be interpreted that most of the respondents are investing for 1-2 years and
these respondents are short term investors who expecting high profits in short term.

65
Table no 7.7 : how much amount do you invest?
Amount of investment No of investors Percentage

<Rs.50000 14 47%

Between Rs.50000 - 10 33%

Rs.100000
>Rs.100000 6 20%

Total 30 100%

Analysis:

As per the above table, it is analysed that 47% of the respondents are invest below 50000 in mutual fund,
33% of the respondents are interested to invest between Rs-50000-Rs.100000 and 20% respondents are
interested to invest above Rs.100000.

AMOUNT OF INVESTMENT
>Rs.100000
20%

<Rs.50000
47%

Between
Rs.50000 -
Rs.100000
33%

Graph no 7.7 : graph showing amount of0investment.

Interpretation:

As per the above graph, it can be interpreted that most of the people invest <50000 because they are not
ready to take risk, second most of the respondents are interested to invest between Rs.50000-Rs100000 and
they are ready to take risk.

66
Table no 7.8 : what is risk preference
Risk Preference No of respondents Percentage
Innovator 10 33%
Moderator 15 50%
Risk adverse 5 17%
Total 30 100%

Analysis:

As per the above table it can be analysed that 33% of the respondents are innovators, they invest more
amount of money and they are ready to take any risk, 50% of the people will check out all the factors and
then if they find that they can bear the risk moderately they will invest and 17% of the people are never
ready to risks.

RISK PREFERENCE
Innovator Moderator Risk adverse

17%

33%

50%

Graph no 7.8 : graph showing risk preference

Interpretation:

From the above graph, the majority of investors are prepared to take medium level risk by investing in
mutual fund and some respondents fall into the "high risk and high return" category. Here, investors can be
interpreted as being essentially medium risk takers.

67
Table no 7.9 : what type of scheme do you prefer?
Schemes No of investors Percentage
Equity 9 30%
Debt 3 10%
Balanced 11 37%
Fixed maturity plan 7 23%
Total 30 100%

Analysis:

As per the above table, it can be analysed that where in the scheme preference most of the investor Prefer a
balanced scheme which has 37%, the second most investors are in Equity Schemes are in 30% then fixed
maturity plan has 23% and the least investors scheme debt has10%.

PREFERRED SCHEME
Equity Debt Balanced Fixed maturity plan

23%
30%

10%

37%

Graph no 7.9 : graph showing preferred scheme of respondents

Interpretation:

As the graph above shows, it is highly likely that there is a balanced fund in the market. This is not
revealed to investors because of its complexity and low awareness.

68
Table no 7.10 : from which sources you came to know about mutual funds
Particulars No of respondents Percentage
Friend’s suggestion 6 20%
Self-decision 12 40%
Television 4 13%
Agents/brokers 8 27%
Total 30 100%

Analysis:

As per the above table it is analysed that 27% of respondents are came to know about mutual funds by
agents, 20% of the respondents by friend’s suggestion, 40% of the respondents are self-decided and 13%
of the respondents came to know by television.

SOURCES
Friend’s suggestion Self-decision Television Agents/brokers

20%
27%

13%

40%

Graph no 7.10 : graph showing from which source respondents of mutual funds.

Interpretation:

From the above graph, it can be interpreted that most respondents will take a self-determining answer to
start investing in mutual funds. Only a few respondents helped TV make investment decisions. As a result,
AMC and SBI have found that more information is needed to provide the best materials, services and
information to facilitate investors' subsequent investment.

69
Table no 7.11 : what type of scheme do you prefer:
Scheme type No of respondents Percentage
Open Ended method 15 50%
Close Ended method 10 33%
Interval method 5 17%
Total 30 100%

Analysis:

As per the above table, it can be analysed that 50% of the respondents are prefer open ended method, 33%
of the respondents prefer close ended schemes and 17% of the respondents are prefer intervals scheme.

SCHEME TYPE
Open Ended method Close Ended method Interval method

17%

50%

33%

Graph no 7.11 : graph showing scheme types that respondents prefer

Interpretation:

From the above graph, with regard to the scheme's prioritization based on its structure, most individual
investors prefer “open-end scheme” mainly for redemption, investment, good return, flexibility of liquidity
It can be interpreted. No investor likes the interval method. In fact, some individual investors have
confused interval-based names.

70
Table no 7.12: performance of the fund manager:
Particulars No of respondents Percentage
Most important 8 27%
Important 7 23%
Neutral 10 33%
Less important 5 17%
Not all important 0 0%
Total 30 100%

Analysis: As per the above table, it is analysed that 27% of the respondents are ranked performance of the
fund manager a most important, 23% of the respondents given ranking has important, 33% given neutral
and no one has marked it has not at all important.

PERFORMANCE OF FUND MANAGER

Most important Important neutral Less important Not all important

0%
17%
27%

33%
23%

Graph no 7.12 : graph showing ranking of performance of fund manager

Interpretation:

From the above graph, it can be interpreted that most of the respondents marked performance of fund
manager has neutral and some respondents of fund managers performance has most important. Therefore,
the fund manager is responsible for conducting the fund investment strategy and managing the portfolio
trading activities. The quality of the fund manager is one of the key factors to consider when analyzing the
quality of the fund investment.

71
Table no 7.13 Current Economic and Market condition:
Particulars No of respondents Percentage
Most important 9 30%
Important 10 34%
Neutral 7 23%
Less important 4 13%
Not at all important 0 0%
Total 30 100%
Analysis:

As per the above table, it is analysed that 30% of the respondents are ranked current economic and market
condition as most important, 34% of the respondent’s given ranking has important, 23% given neutral,
13% of the respondents ranked as less important and none of the respondent has market it has not at all
important.

CURRENT ECONOMIC AND MARKET

CONDITION
Most important Important Neutral Less important Not at all important

0%
13%

30%

23%

34%

Graph no 7.13 : graph showing ranking on current economic and market condition.

Interpretation:

From the above graph, it can be interpreted that the majority of the respondents who evaluated the fund
manager's performance is important. As such, investments use economic indicators to adjust their views on
economic growth and profitability. Improved economic conditions will make investors more optimistic
about the future and increase the likelihood of investing in hopes of a positive return.
 72
Table no 7.14: Attitude toward risk
Particulars No of respondents Percentage
Most important 5 17%
Important 11 37%
Neutral 8 26%
Less important 3 10%
Not at all important 3 10%
Total 30 100 %
Analysis:

As per the above table it is analysed that 17% of respondents are ranked attitude towards risk is most
important, 37% of the respondent ranked it has important, 26% given neutral, 10% less important and 10%
of the respondents marked as not at all important.

ATTITUDE TOWARDS RISK

Most important Important Neutral Less important Not at all important

10%
17%

10%

27%
36%

Graph no 7.14: graph showing ranking of attitude towards risk5

Interpretation:

From the above graph, it can be analysed that 17% of the respondents are ranked Attitude towards risk is
most important, 36% of the respondents ranked it has important, the respondents who ranked important
and most important, they are ready to take risk.
 73

CHAPTER-8

FINDINGS, SUGGESTIONS AND

CONCLUSION
 74

8.1 Findings

Based on Secondary Data:

1. In Diversified mutual funds Kotak Opportunities Fund- Regular (G) is giving outstanding
performance, in last year Birla SL India GenNext (G) is having high returns compared to all and
Reliance equity Opportunities –RP (G) is having stable returns.

2. Large Cap Mutual Fund's Reliance Top 200 Fund – RP (G) has a high value of 0.729, and all the
funds are heavily influenced by the market, so it can be seen that they do not make the most of
professional management

3. My overall aspect of the small and medium-sized funds Franklin India Prima Fund (G) and DSP
Small and Medium-RP (G) most active and good return and highly sensitive market.
4. In equity linked savings scheme reliance tax saver (ELSS)(G) is best fund among all compared five
different ELSS funds by giving good returns and volatile in nature.

Based on Primary Data:

1. Respondent to whom questionnaire given was 30, but the respondents who investing in mutual
funds are 20.

2. Respondents belong to the age group of 31 to 40 years and say that they are interested in investing
in mutual funds. These people are more likely to invest than their counterparts and want to invest in
mutual funds to increase their income.

3. Most investors are physicians and professionals like California. Businesses and professionals are
more interested in mutual funds because of their high growth potential and resource investment in
money market products.

4. 30% of respondents invest in mutual funds for safety, and 27% of respondents invest in mutual
funds for risk diversification.

5. 36% of the respondents is having income between 2-4 lakh yearly and interested and have invested
in mutual funds because it was their primary financial goal and also for reducing taxable income.

6. 43% of the respondents are invest for 1-2 years and 33% of the respondents will invest more than
0-1 year, these respondents are long term investors who are expecting high profits in future.
 75
7. 47% of the people invest <50000 because they are not ready to take risk, the respondents are
interested to invest between Rs.50000-rs.100000 is 33% and they are ready to take risk.

8. 37% of investors prefers balanced equity fund, 30% prefer equity fund, 10% of the investors or
preferring debt scheme, because of lack of knowledge people invest only on equity and balanced
they won’t aware of other schemes.

9. The majority of respondents are self-determined, i.e., 40% of those who start investing in mutual
funds, and only 27% with broker / adviser assistance for final investment decisions.

10. With regard to institutional preferences based on that structure, most individual investors prefer the
"open-end" approach for flexibility in redemption, investment, good return and liquidity.

11. 27% of the respondents marked performance of fund manager has most important and 23% has
important.

12. 30% of the respondents marked performance of fund manager has most important and 34% has
important. Investors use indicators of economic conditions to adjust their views on economic
growth and profitability.

13. 17% of respondents are ranked attitude towards risk is most important, they are ready to take risk.
 76

8.2 SUGGESTIONS:

Financial goals depend on a variety of factors, including the age of the investor, lifestyle, financial
independence, family dedication, and income and spending levels. Therefore, it is necessary for investment
trust companies to assess the needs of consumers. They have the purpose of investment, such as regular
income, home purchase, children's wedding or education funding, or a combination of all these needs, the
amount of risk, and willingness to accept, and cash flow requirements define your needs.

Investors should choose the right mutual fund system that suits their needs. Investors should fully read the
offering documents of the mutual fund plan. Several factors that need to be evaluated before selecting a
particular mutual fund are the performance records of the fund over the past few years, with appropriate
standards and similar funds in the same category. Other factors include portfolio allocation, dividend yield
and transparency, which are reflected in the frequency and quality of communications.

For investors, the best way is to invest a fixed amount at a specific time interval. By investing a fixed
amount each month, you can reduce the number of purchases at higher prices and increase the number of
purchases at lower prices, thereby reducing the average cost per vehicle. This is called the rupee cost
average.
 77

8.3 CONCLUSION:

Further comparative analysis of mutual funds I have selected five funds under a different category. In the
process of comparative analysis of category wise and fund wise comparison reliance mutual had good
return and in some categories, it has maintained stable returns. It is clear that all funding worked well
during the study. In the final analysis we can conclude that all funds are working well in volatile market
movements. NAV, total returns to ensure stable performance of mutual funds. Risk oriented refers to the
investor's ability to bear the risk and interest. Mutual funds are a low risk means of investment in the
capital markets, but also involved in market risk. Risk orientation among investors is very important for
investing in mutual funds and their investment behaviour. You can also summarize that people from
different occupational profiles invest in mutual funds for different purposes, based on the professional
profile and the basic purpose of investing in mutual funds.

Mutual Funds now represent perhaps most appropriate investment opportunity for most investors. As
financial markets become more sophisticated and complex, investors need a financial intermediary who
provides the required knowledge and professional expertise on successful investing. As the investor always
try to maximize the returns and minimize the risk. Mutual fund satisfies these requirements by providing
attractive returns with affordable risks. The fund industry has already overtaken the banking industry, more
funds being under mutual fund management than deposited with banks. With the emergence of tough
competition in this sector mutual funds are launching a variety of schemes which caters to the requirement of
the particular class of investors. Risk takers for getting capital appreciation should invest in growth, equity
schemes. Investors who are in need of regular income should invest in income plans.

The stock market has been rising for over three years now. This in turn has not only protected the money
invested in funds but has also to helped grow these investments. This has also instilled greater confidence
among fund investors who are investing more into the market through the MF route than ever before.

Reliance India mutual funds provide major benefits to a common man who wants to make his life better than
previous. The mutual fund industry as a whole gets less than 2 per cent of household savings against the 46
per cent that go into bank deposits. Some fund managers say this only indicates the sector's potential. "If
mutual funds succeed in chipping away at bank deposits,
 78

BIBLOGRAPHY

http://www.moneyplantservices.com

http://www.moneycontrol.com/mutual-funds

http://www.bseindia.com http://www.amfiindia.com

https://www.moneyspring.in/blog/mutual-funds-vs-other-asset-investment

https://cleartax.in/s/real-estate-vs-mutual-funds

https://www.bankbazaar.com/mutual-fund

tmoney.com/blog/real-estate-vs-mutual-fund

https://www.livemint.com/money/personal-finance/investing-in

https://www.mutualfundssahihai.com/en/

https://health.info.com/
 79
Reference:

 Bansal, S., Garg, D., & Saini, S. K. (2012). Impact of Sharpe ratio & Treynor's ratio on selected
mutual fund schemes. International Journal of Applied Engineering Research, 7(11), 2012.

 DESAI, P. D. (2014). Growth of mutual funds in India and its impact on national income (Doctoral
dissertation, Shri Jagdish Prasad Jhabarmal Tibrewala University).

 Karrupasamy, R., & Vanaja, V. (2014). Performance evaluation of selected category of public
sector mutual fund schemes in India. International research journal of business and management, 1,
1-9.

 Deb, S. S., Vuyuri, S., & Roy, B. (2003). Modelling Stock Market Volatility in India: A
Comparison of Univariate Deterministic Models.

 Khorana, A., Tufano, P., & Wedge, L. (2007). Board structure, mergers, and shareholder wealth: A
study of the mutual fund industry. Journal of Financial Economics, 85(2), 571-598.

 Mukherjee, P., & Bose, S. (2008). 5-22. Does the stock market in India move with Asia?: A
multivariate cointegration-vector autoregression approach. Emerging Markets Finance and Trade,
44(5),

 Treynor, J. L. (1965). How to rate management of investment funds. Harvard business review,
43(1), 63-75.

 Bretthauer, M., Kaminski, M. F., Løberg, M., Zauber, Michael c. Jensen (1967). Population-
based colonoscopy screening for colorectal cancer: a randomized clinical trial. JAMA internal
medicine, 176(7), 894-902.

 McDonald, J. G. (1974). Objectives and performance of mutual funds, 1960– 1969. Journal of
Financial and Quantitative Analysis, 9(3), 311-333.

 Walia, M. (2010). Efficient Market Hypothesis, Price Volatility, and Performance of Mutual Funds.
Global Journal of Management and Business Research, 10(2).
 80
 Mishra, S. K., & Kumar, M. (2011). What mutual fund investors’ objective and subjective
knowledge impacts their information search and processing behaviour. Journal of Financial Services
Marketing, 16(1), 27-41.

 Agarwal, D., Singh, S. K., & Agarwal, A. K. (2011). Effect of Exhaust Gas Recirculation (EGR) on
performance, emissions, deposits and durability of a constant speed compression ignition engine.
Applied energy, 88(8), 2900-2907.

 Engelberg, J. O. S. E. P. H., & Gao, P. (2011). In search of attention. The Journal of Finance,
66(5), 1461-1499.

 Khurana, A., & Panjwani, K. (2010). Hybrid mutual funds: An analysis. Asia Pacific Journal of
Research in Business Management, 1(2), 94-109.

 Lamba, V (2014). Challenges and Opportunities for Electronic Commerce in India.

 DESAI, P. D. and S. Palani (2014). Growth of mutual funds in India and its impact on national
income (Doctoral dissertation, Shri Jagdish Prasad Jhabarmal Tibrewala University).

 Bhagyasree, N., Kishori, M. B., BHAGYASREE, N., & KISHORI, M. (2016). A Study on
Performance Evaluation of Mutual Funds Schemes in India. International Journal for Innovative
Research in Science & Technology, 2(11), 812-816.

 Moorthie, S., Cameron, L., Sagoo, G. S., Bonham, J. R., & Burton, H. (2014). Systematic review
and meta-analysis to estimate the birth prevalence of five inherited metabolic diseases. Journal of
inherited metabolic disease, 37(6), 889898.

 Titman, S., & Grinblatt, M. (1989). Mutual fund performance: An analysis of quarterly portfolio
holdings. Journal of Bussines, 62(3).
 81

Questionnaire

1. Do you invest in mutual funds?

a. Yes
b. No

2. The age group under which you belong?

a. 21-30
b. 31-40
c. 41-50
d. 51-60

3. Occupation
a. Salaried
b. Business
c. Professional
d. Retired

4. Why are you investing in Mutual Funds?

a. Safety
b. Good Return
c. Tax Benefits
d. Capital Appreciation
e. Risk Diversification

5. What is your income?

a. 1 lakh
b. 2 - 4 lakh
c. 4 – 5 lakhs
d. More than 5 lakhs
 82

6. What is the duration of your investment/?

a. 0 – 1 Year
b. 2 – 4 Year
c. 4 – 5 Year
d. More than 4 Year

7. How much amount do you invest?

a. <Rs 50000

b. Between Rs 50000-rs100000

c. > Rs.100000

8. Risk preference
a. Innovator
b. Moderator
c. Risk adverse

9. What kind of method do you like?

a. equity
b. debt
c. balanced
d. Fixed maturity plan

10. Which kind of savings do you like?

a. Life insurance
b. Bank deposit
c. Shares and debentures
d. Units of mutual funds
e. Gold/Jewelleries

11. From which sources did you know about mutual funds?
a. Friend’s suggestion
b. Self-Decision
c. Television
d. Agents/Brokers
 83
12. Which scheme type do you like?
a) Open end method
b) Termination method
c) Interval method

13. What is the performance of fund manager?

a. most important

b. Important
c. neutral
d. less important
e. not all important

14. How are Current Economic Conditions related to Mutual Fund ?

a. Most Important

b. Important

c. Not at all important

d. less important

e. Neutral
84