Summer Internship Project Report

on
“COMPARATIVE STUDY ON MUTUAL FUNDS
AND OTHER INVESTMENT SCHEMES”

In Partial Fulfillment of the requirement for the award of the Degree of

Master of Business Administration (MBA)
(2021-2023)

Approved by AICTE New Delhi & Affiliated with RTU Kota

IPS COLLEGE OF TECHNICAL EDUCATION, JAIPUR

(Approved by AICTE New Delhi, Gout of India & Affiliated to Rajasthan Technical University, Kota)

Submitted by Submitted to
Mrs. Deepti Agarwal Mr. Deven Agarwal
(Director) Academic Year: 2021-2023
 PRACTICAL TRAINING REPORT

SUBMITTED BY

NAME : Deven Agrawal

College Roll No : 21MIPXXX632

Session : 2021 - 2023

Training Period : 1st Mar, 2022 To 31st Oct 2022

SUBMITTED TO

Professor & Head,

Department of Training & Placement

Name of the college

IPS College of Technical Education, Jaipur
SUMMER TRAINING PROJECT EVALUATION FORM

Name of Student Deven Agarwal Institute Roll No. 21MIPXXX632

Session 2021-2023
Name of Organization A.C. Agarwal Share Brokers Pvt. Ltd.
Address 315 City Mall, Bhagvandas Road, C-Scheme
Place Jaipur Pin 302001 Phone 0141 492098999 Fax No. 2729207
Duration of Training Period from 14 Aug 2021 to 15 Oct 2021
No. of Working Days 90 Days

1) How to you rate the overall training program as an educational experience?

Excellent (*) Very good ( ) Good ( ) Fair ( ) Poor ( )
2) To what extent will it help you in future?
To large extent (*) To some extent ( ) Negligible extent ( )
3) Indicate subject/ area to which training was found relevant Operation/Finance
4) Indicate the level of interest taken by the training organization
High (*) Moderate ( ) Low ( )
5) Any other comments/ suggestions
Best Organisation to learn about stock market and other financial instruments

Dated: 31/10/2022

Signature of the Student

Note: A free and frank assessment of the Training experience would be helpful in improving
the Training Programme
 FEEDBACK FORM

1. Name of the Industry: Banking and Financial Services

2. Concerned Group: Stock Market
3. Turn Over (in terms of Capital): 1500 Crores (in terms of Product)
4. Work Force: Managerial & Management staff:- over 40 peoples
5. Description of Product Range: Stock Market Services related
6. Description of Process: Brokers related services and selling Company Products
7. Area of Training: Finance and Operation related work
8. Contact details of the Person responsible for Summer Training Project:
a) Name of contact person: Harshit Kejriwal
b) Designation: Back test Strategist
c) Communication address: Same as Company Address
d) Phone No. with STD code: 91 - 8947955182
e) Mobile No. : 8947955182
f) Email Address: harshitkejriwal57@gmail.com

Name of the student: Deven Agrawal

Class: MBA Sec-A
Dated: 31/10/2022

Signature of the Student

 ACKNOWLODGEMENT

The satisfaction and the success of work are incomplete without mentioning the
people who helped and guided me in completing the research report. I would
consider it my privilege to thank IPS Business School, Jaipur for providing the
Summer Internship Opportunity which provided me the exposer to the corporate
world.

Any work accomplishment is seldom on person achievement. There are usually

many people behind it who contribute to its goodness in form or the other. It
was my good luck that the staff of A.C. Agarwal was supportive which ease my
job by quite a long extent.

I would like to thank our trainer and industry mentor Mr. Aditya Agarwal of
A.C. Agarwal, Jaipur for giving me the privilege to work with A.C. Agarwal
Share Brokers Pvt. Ltd. as an intern, without his help and guidance learning and
preparing this report wouldn’t have been possible.

I am also thankful to every member of A.C. Agarwal who guided and provided
us their constant supervision all over my internship period.

Deven Agarwal
 PREFACE

Quite frequently these days’ people talk of practical knowledge, both in

academic institutions and outside. At each and every aspect in life we require
some sort of theoretical and practical knowledge too.

It means only classroom lecture may not be enough to get the proper knowledge
either in the business field or social life. Keeping all this in view, the present
report has been written for the comparative study on mutual funds and other
investment schemes with special reference to A.C. Agarwal share brokers pvt
ltd and their customers.

I am grateful to all those who have helped me in the successful completion of

this report. I hope I have tried my level best in making this Report. If there is
any error, in this Report I want to apologies for that.
 CONTENTS
CHAPTER – I INTRODUCTION
1. Introduction to the topic
2. Objectives of the study
3. Scope of the study
4. Application of the study
5. Methodology of the study
6. Tools used for analysis
7. Limitations of the study

CHAPTER – II COMPARATIVE STUDY ON MUTUAL FUNDS AND OTHER

INVESTMENT SCHEMES
1. Introduction on Mutual fund
2. Introduction on Equity shares
3. Introduction on Index
4. Introduction on Derivatives

CHAPTER – III COMPANY PROFILE

1. A.C. Agarwal – Overview
2. A.C. Agarwal – Early days
3. A.C. Agarwal – Alliances
4. Milestone
5. Achievements
6. Quality policy & objectives
7. A.C.. Agarwal – stock broking limited

CHAPTER – IV ANALYSIS & INTERPRETATION

CHAPTER – V CONCLUSIONS & SUGGESTIONS

CHAPTER – VI BIBILOGRAPHY
CHAPTER –1

INTRODUCTION
INTRODUCTION ON MUTUAL FUNDS

During the last two decades, commerce and industry have exploded all over the globe. The
day when money used to stay inside national borders has long since gone. Technology,
money, and other resources are not only crossing national boundaries in this period of
globalisation and liberalisation but also boosting the amount of international commerce. New
financial instruments known as mutual funds were created as a result of how quickly the
concepts of corporate finance, bank finance, and investment finance have transformed in
recent years. This financial product, as its name implies, combines the funds of a number of
individuals who have similar financial objectives. Depending on the goal of the plan, the fund
manager invests the money thusly raised in various kinds of assets. In the financial industry,
mutual funds have gained prominence. While choosing how to invest, mutual funds, which
are referred to legally as "open-ended businesses," must follow the rules outlined in the
Investment Company Act of 1940.

Mutual funds are appealing because they demand less work from investors and provide
diversification, bond selection, professional advice, low costs, and favourable tax treatment.
Moreover, the number of stocks that mutual funds must sell is not fixed; rather, the number of
stocks added to the fund depends on demand. A mutual fund is a kind of trust that combines
the money of many participants who have similar financial objectives. Depending on the goal
of the plan, the fund manager invests the money thusly raised in various kinds of assets.
These could include securities such as shares, debentures, or money market instruments.
According to the amount of units they possess, the scheme's unit holders partake in the
income generated by these investments and the capital gains obtained by the programme. As
a result, a mutual fund is the best option for the average investor since it gives them the
chance to participate in a professionally managed, diversified portfolio at a reasonable price.

Everyone may invest in mutual funds with as little as a few thousand rupees in investible
excess. The best investment instrument for the complicated and contemporary financial
environment of today is a mutual fund. Equities, bonds, and other fixed income instruments,
as well as derivatives for real estate and other assets, have developed into sophisticated,
information-driven markets. A typical person is unlikely to possess the information, abilities,
disposition, and time necessary to monitor events, comprehend their consequences, and act
quickly. Hence, a mutual fund is the culmination of several components, each of which is
intended to serve a certain purpose.

The market regulator, SEBI, has spelled out each entity's position and duties in great detail.
Your interaction with the mutual fund will, in part, depend on how effectively they work.
Mutual funds are distinctive among investment vehicles since they are the only ones that
function on the idea of pooling resources. The element of novelty permeates every aspect of
how they operate, including the types of financial exposures they provide, the language they
use, the price standards they adhere to, and a whole lot more.

During the course of this book, these personality qualities will become clear. The demands of
life are many. There is a lot to enjoy and take care of, in the office or at home, with family,
friends, or by oneself. The unavoidable fact that money is a tool for many ends is woven
throughout these dangers. a suburban home, a top-notch school for the kids, a fast car, and an
early retirement. The methods used by at least one of them to achieve their goals may differ,
but they all revolve around money. intelligently earned, consistently saved, and invested.

Many claim that they lack discipline and have little understanding of investment, particularly
the stock market. They don't care and don't have the time. They should, at least in part.
Because it is their life and money, having their savings work for you is helpful. The least they
can and should do is acquire a handle on the broad picture. They don't have to dive headfirst
into their own money. Find out what they want from their investments, and then put the rest
in the hands of mutual fund managers. These investment vehicles don't require a thorough
knowledge of financial concepts, nor do they require a lot of your time.
OBJECTIVES OF THE STUDY

1) The primary goal is to determine if mutual funds are the best option for investors.

2) This project's goal is to conduct research on different secondary market investment plans.

3) To determine the various fluctuations in distinct sectoral mutual fund schemes

4) To study the relationship between mutual funds' equity share investments and the Nifty
and Sensex.

5) To assist the general public in selecting the investment that offers the highest return while
taking numerous factors into account.

6) To understand how different schemes affect mutual fund investments and their
performance based on historical data.

7) To examine the performance of certain equities and mutual fund businesses over the
course of a year.

8) To outline the present state of mutual funds, stocks, and indexes in India throughout the
last year.
SCOPE OF THE STUDY

1) The study includes an introduction to equities, derivatives, and indexes as well as the idea
and specifics of mutual funds.

2) The analysis also takes into account mutual fund returns, stock returns, and relative sector
indices.

3) The analysis also takes into account the highs and lows of the year for stocks.

4) The research on the net asset value (NAV) of mutual funds in various industries is
included in the project report.

5) The Net Asset Value (NAV) charts, which provide a comprehensive image of the mutual
fund company's present worth, are included in the analysis section.

6) The study's theory section contains information on portfolio selection for various funds.

7) The theory section also contains the following details on mutual funds:
History of mutual funds; Idea of mutual funds; Reasons for investing in mutual funds; Net
Asset Value (NAV); Types and advantages of mutual funds; Developments in mutual funds;
Future outlook; Issues with the Indian mutual fund business.
APPLICATION OF THE STUDY

1) The research enables the investor to contrast alternative investment strategies and their
yields.

2) The reader may get a comprehensive understanding of mutual fund ideas and
developments.

3) Knowledge of different schemes and the operation of mutual funds is gained through the
study.

4) The user may properly compare the performance of the research period to the returns in
other schemes.

5) The research gives readers the ability to analyse the charts to determine the net asset value
(NAV).

6) Researchers might consider more research by incorporating data from a wide time span.

7) The research also helps us comprehend the Sensex and Nifty variations.
METHODOLOGY OF THE STUDY

To minimise the chance of biassed analysis, every piece of information pertaining to the
subject has to be thoroughly examined. After the information that needs to be gathered has
been determined to be relevant, we must specify how it will be done.
The investigation's methodology is determined by the goal and reach of the inquiry. Let's
attempt to understand technique.

1) RESEARCH DESIGN: A research design is a description or specification of the steps to

be taken in order to gather and analyse the data needed to solve a particular issue.
Here, exploratory research is used since the primary goal of the study is to identify patterns
and positive and negative returns in various mutual fund and equity sectors. Exploratory
inquiry is frequently carried out by three sources of information.
Researching secondary sources A) conversing with others B) researching specific topics

2) DATA COLLECTION METHODS: The key to developing an effective system is

selectivity in data collection and tying that selectivity to the analysis and decision-making
processes. To make accurate and reliable findings from the research, the acquired data must
be accurate.
The primary stages of data collection are listed below.
A) The kind of information needed for the inquiry B) determining the facts already known
and those that need to be learned.
c) determining the sources from which the information may be obtained.
d) Choosing the best information to acquire or the right information

3) INFORMATION SOURCES: There are two types of data sources for marketing
research: primary and secondary.
Primary data: Primary data are generated throughout an investigation based on the needs of
the situation. Using case study techniques, primary data is gathered. There are a number of
qualitative procedures that are used to gather socioeconomic data on various phenomena.
Secondary data: Secondary data is described as information gathered for purposes other than
addressing the issue under investigation. Secondary data is gathered from other sources,
including information from SEBI publications and some information gathered online. Many
books, journals, periodicals, newspapers, etc. are included among the data sources. Branch
managers provide the organization's profile.
TOOLS USED FOR ANALYSIS

TABULATION

A table is a logically organised row and column arrangement of statistical data. Although
columns are arranged vertically, rows are horizontal. A systematic presentation of facts in a
format appropriate for study and interpretation is called a tabulation. These are the tables that
were used:
1) One-way table: It only offers one feature and hence provides a response to one or more
separate inquiries about that characteristic.
2) Two-way table: It has subdivisions of a total and may respond to two inquiries that are
interdependent.
3) Three-way table: It splits the total into three separate groups. It can respond to three
interconnected queries.

DATA GRAPHICAL REPRESENTATION

There are a thousand words in a picture. An image may convey a message considerably more
effectively than any amount of in-depth discussion. Diagrams and graphs are useful ways to
communicate statistical data. Complex data is made easy and clear by graphs and diagrams.
They assist in comparing similar data and, amazingly, bring out subtle details. Below is the
diagram that was used:
1) Bar charts: Bar charts are only used for categorical data or series. They are made up of a
set of equidistant rectangles, one for each group or category of data, where the sizes of the
rectangles serve as measures of the magnitudes.
2) An example of a bar chart: This kind of chart is used to compare two or more facets of a
single variable or one particular area of data.
3) Percentage bar diagram: A bar diagram that has been broken into smaller sections and
shown as a percentage of the entire is referred to as a percentage bar diagram.

A COMPARATIVE STUDY
By comparing various investing strategies, such as mutual funds, equities, and relative
indexes, comparative studies are produced. For various industries, the returns of stocks and
mutual funds are contrasted. The report also displays the net asset value of several mutual
fund businesses. Overall, the research compares several investing strategies and the returns
they provide over the course of a year.
LIMITATIONS

1) The NSE stock exchange does not take equity returns.

2) Due to a data shortage, only three, six, and one year of data for the equity and mutual fund
industries are collected.

3) Because of time constraints, not all sectors have been researched; rather, just a few have.

4) The data for mutual funds on the website is current day data. Every day, the data is
updated. Hence, the information is current as of March 31, 2006.

5) Only growth funds are taken.

6) Tata Consulting information has not been collected since NSE scrip data is not available.
 CHAPTER – 2

COMPARATIVE STUDY ON MUTUAL

FUNDS AND OTHER INVESTMENT
SCHEMES
INTRODUCTION ON MUTUAL FUND

The concept of “Mutual fund” is a new feature in the cap of Indian capital market but not to
international market. The concept of mutual fund spread to USA in the beginning of 20th
century and three mutual fund companies were started in 1924. Mutual funds have been
successfully working in the USA and some western countries. These funds have been useful in
filling the gap between the demand and supply of capital in the market. A mutual fund
motivates small and big investors to entrust their savings to it so that these are professionally
employed in sharing good return. A large number of investors have small savings with them.
They can at the most buy shares of one or two companies. When small savings are pooled and
entrusted to mutual fund then these can be used to buy blue chips where regular returns and
capital appreciation are ensured. Fund is an American concept. The terms like investment
company, money fund investment trust and mutual funds are used interchangeably and used to
describe the same thing in American literature. In British literature mutual funds has not been
explained but is considered as a synonym of investment trust of USA.

DEFINITION & MEANING

A mutual fund is a type of investment instrument used by investors to combine their resources
and invest in a variety of assets with the hope of earning attractive returns and seeing their
value increase.

"A mutual fund is a financial service organisation that receives money from shareholders,
invests it, earns a return on it, attempts to make it grow, and agrees to pay the shareholder
cash on demand for the current value of the investment," According to the mutual fund book
published by the Investment Company Institute of the US.

"A fund created in the form of a trust to generate funds by the sale of units to the public or a
segment of the public under one or more schemes for investing in securities, including money
market instruments," is how SEBI (mutual fund) rules, published in 1996, describe mutual
funds.
A mutual fund is a particular kind of trust or investment business that serves as an investment
middleman and directs a lot of people's resources to corporate securities so that investors enjoy
a constant return, capital growth, and minimal risk.

A mutual fund is a trust that combines the savings of many participants who want to begin
investing but do not have a lot of money to work with or who want to take a hands-off approach
and allow the expert to make all the choices. In essence, mutual funds are sizable funds run by
investment firms that collect money from several sources and then invest it in accordance with
a predetermined purpose. This frees up the individual from having to continuously monitor
market circumstances and modify investments appropriately, allowing for more diversity than
would be conceivable for a single person with modest assets.

HISTORY OF MUTUAL FUND INDUSTRY

Unit Trust of India, a mutual fund company, was established in 1963 on the initiative of the
Reserve Bank and the Government of India. Four separate periods may be used to roughly
categorise the development of mutual funds in India.

FIRST PHASE: 1964–1987 A parliamentary act formed the Unit Trust of India (UTI) in 1963.
It was established by the Reserve Bank of India and operated under its regulatory and
managerial supervision. The Industrial Development Bank of India (IDBI) replaced the RBI as
the regulatory and administrative authority of UTI in 1978, when it was delinked from the RBI.
Unit Scheme 1964 was UTI's inaugural initiative. UTI managed assets of Rs. 6,700 crores by
the end of 1988.

SECOND PHASE: 1987–1993 (Entry of Public Sector Funds) In 1987, public sector banks,
Life Insurance Corporation of India (LIC), and General Insurance Corporation of India (GIC)
launched non-UTI mutual funds. The first non-UTI mutual fund to be established was SBI
Mutual Fund in June 1987. This was followed by Canara Bank Mutual Fund in December 1987,
Punjab National Bank Mutual Fund in August 1989, Indian Bank Mutual Fund in November
1989, Bank of India Mutual Fund in June 1990, and Bank of Baroda Mutual Fund in June 1990.
(Oct 92). Whereas GIC had formed its mutual fund in December 1990, LIC had done so in
June 1989. The mutual fund sector managed assets of Rs. 47,004 crores by the end of 1993.
THIRD PHASE: 1993–2003 (Entry of Private Sector Funds) A new era in the Indian mutual
fund market began with the arrival of private sector funds in 1993, providing Indian investors
with a greater selection of fund families. Moreover, the first Mutual Fund Rules, which required
all mutual funds, with the exception of UTI, to be registered and supervised, were established
in 1993. The first mutual fund in the private sector was founded in July 1993 under the name
Kothari Pioneer, which has now merged with Franklin Templeton. In 1996, a new and more
thorough version of the Mutual Fund Rules replaced the 1993 SEBI (Mutual Fund)
Regulations. The SEBI (Mutual Fund) Rules from 1996 govern how the sector now operates.
With many global mutual funds opening funds in India, the number of mutual fund firms
continued to rise. Moreover, the sector has seen a number of mergers and acquisitions. There
were 33 mutual funds with a combined asset value of Rs. 1,21,805 crores as of the end of
January 2003. With assets under management of Rs. 44,541 crores, the Unit Trust of India was
well ahead of rival mutual funds.

FOURTH PHASE: SINCE FEBRUARY 2003 Once the Unit Trust of India Act of 1963 was
repealed in February 2003, UTI was divided into two distinct organisations. One is the
Specified Undertaking of the Unit Trust of India, which as of the end of January 2003 had
assets under management of Rs. 29,835 crores, about equivalent to the assets of the US 64 Plan,
guaranteed return, and a few other schemes. The Unit Trust of India's Specialized Undertaking,
which is governed by an administrator and by laws set out by the Indian government, is exempt
from the Mutual Fund Rules. The UTI Mutual Fund Ltd., sponsored by SBI, PNB, BOB, and
LIC, is the second. It operates in accordance with the Mutual Fund Rules and is registered with
SEBI. The mutual fund business has started its present era of consolidation and expansion with
the split of the former UTI, which had in March 2000 more than Rs. 76,000 crores of assets
under management, and with the establishment of a UTI Mutual Fund, complying with the
SEBI Mutual Fund Rules. There were 29 funds as of the end of September 2004, and they were
in charge of 421 different programmes and 153108 crores in assets. The graph shows the
increase of assets over time.
GROWTH IN ASSETS UNDER MANAGEMENT

Note:
Erstwhile UTI was bifurcated into UTI Mutual Fund and the Specified Undertaking of the Unit
Trust of India effective from February 2003. The Assets under management of the Specified
Undertaking of the Unit Trust of India has therefore been excluded from the total assets of
the industry as a whole from February 2003 onwards.
CONCEPT OF MUTUAL FUND
A mutual fund is a kind of trust that unites the savings of many participants who have similar
financial objectives. The funds thusly raised are subsequently invested in assets such as shares,
debentures, and other capital market instruments. According to the number of units they
possess, the income generated by these investments and the capital gains realised are
distributed to the unit holders. Hence, a mutual fund is the best kind of investment for the
average person since it provides the chance to invest in a variety of professionally managed
assets at a reasonable price.

WHY MUTUAL FUNDS

Assume you have $5,000 to invest, three key objectives you want to accomplish, and you're
just starting out as an investor. Initially, you want security, such that offered by a certificate
of deposit or other fixed income investment, since you don't want to risk losing your money
in a hazardous endeavour. Yet, you also want to maximise your earnings, therefore you also
need the possibility of future development. Last but not least, you need professional money
management since you lack the expertise and time to actively manage your finances.
Professional money management will periodically diversify your assets into exciting new
prospects. It seems like a great strategy, but where can you put your money to work so you
can potentially achieve all three requirements? Security is provided by certificates of deposit
and other fixed income investments, but they sometimes have low interest rates and little
opportunity for growth. While individual stocks may have a higher growth potential, $5,000
is a little amount to invest, and if you put it all in one company, you run the risk of losing it
all if it doesn't do well. Moreover, brokers and investment experts may help you manage your
money and provide guidance, but you must pay them for their services, which further limits
the amount you have to invest. One in every two American homes, or more than 80 million
individuals, invests in mutual funds. Around $6 trillion has been invested in mutual funds as
of late. While funds have been existed since the 1920s, demand for them has increased
significantly in the last 25 years.

The reasons:

 Mutual funds make it easy and less costly for investors to satisfy their need for capital
growth, income and/or income preservation
  Mutual funds bring diversification and professional money management to the
individual investor

A mutual fund is a company that pools the money of many investors -- its shareholders -- to
invest in a variety of different securities. Investments may be in stocks, bonds, money market
securities or some combination of these. Those securities are professionally managed on
behalf of the shareholders, and each investor holds a pro rata share of the portfolio -- entitled
to any profits when the securities are sold, but subject to any losses in value as well. For the
individual investor, mutual funds provide the benefit of having someone else manage your
investments, take care of record keeping for your account, and diversify your dollars over
many different securities that may not be available or affordable to you otherwise. Today,
minimum investment requirements on many funds are low enough that even the smallest
investor can get started in mutual funds. A mutual fund, by its very nature, is diversified -- its
assets are invested in many different securities. Beyond that, there are many different types of
mutual funds with different objectives and levels of growth potential, furthering your chances
to diversify.

NET ASSET VALUE

The net asset value of the fund is the cumulative market value of the assets fund net of its
liabilities. In other words, if the fund is dissolved or liquidated, by selling off all the assets in
the fund, this is the amount that the shareholders would collectively own. This gives rise to
the concept of net asset value per unit, which is the value, represented by the ownership of
one unit in the fund. It is calculated simply by dividing the net asset value of the fund by the
number of units. However, most people refer loosely to the NAV per unit as NAV, ignoring
the "per unit". We also abide by the same convention. The price measured per unit is called
the Net asset value NAV of the unit. Just as a share or a bond is brought at a price, a mutual
fund is bought and sold at its NAV. If for example u were to invest Rs.10000 in a scheme
when its NAV is Rs.10 you will be allotted 1000 units (10000/10) roughly –the fund charges
a nominal processing fee. The NAV of any scheme tells how much each unit of it is worth at
any point in time, and is therefore the simplest measure of how it is performing. A scheme’s
NAV is its Net assets (market value of the securities is owns minus whatever it owes) divided
by the number of units it has issued. A scheme’s NAV is a dynamic figure. The market value
of the scheme’s portfolio changes from day to day as prices of shares and bonds move up or
down. The number of units outstanding also changes, as new investors come into the scheme
and old ones leave. If the NAV of your schemes rises from Rs.10 to Rs.11 over a period of
time, your scheme is said to have generated a return of 10 percent. Similarly, if its Net NAV
falls form Rs.10 to Rs. 9, it is said to have lost 10 percent. Fund houses have to calculate and
disclose, the NAVs of their schemes daily. Fund NAVs can be easily looked up. While the
general dailies give a random listing of schemes, the financial papers are more exhaustive in
their coverage. When invested in a scheme, its NAV is the figure to track, as it quantifies
your returns, and your purchase price will be based on it. Random listing of schemes, the
financial papers random listing

TYPES OF MUTUAL FUNDS

This section gives explanations of the characteristics of several sorts of funds, such as their
investing purpose and the possibility of investment volatility. These explanations are
arranged according to the securities that each fund purchases: either money market
instruments, fixed-income securities, or a mix of these. These fund types are arranged in this
table according to their level of aggressiveness or conservatism as well as their investment
goal. Since mutual funds offer distinct investing objectives, such as capital growth, principal
protection, current income, or tax-exempt income, you may choose one fund or a variety of
funds to help you achieve your unique objectives.

In general, mutual funds fall into these general categories:

 Equity funds invest in shares of common stocks.

 Fixed-income funds invest in government or corporate securities that offer fixed rates
of return.
 Balanced Funds invest in a combination of both stocks and bonds.
 money market funds for high stability of principal, liquidity, and income.
 Bond funds, both tax-exempt and taxable, generate income.
 Specialty or sector funds to diversify holdings within an industry
Equity Funds

Aggressive Growth Funds

These funds seek maximum growth of capital with secondary emphasis on dividend or
interest income. They invest in common stocks with a high potential for rapid growth and
capital appreciation. Because they invest in stocks which can experience wide swings up or
down, these funds have a relatively low stability of principal. They often invest in the stocks
of small emerging growth companies and generally provide low current income because these
companies usually reinvest their profits in their businesses and pay small dividends, if any.
Aggressive growth funds generally incur higher risks than growth funds in an effort to secure
more pronounced growth. These funds may invest in a broad range of industries or
concentrate on one or more industry sectors. Some use borrowing, short-selling, options and
other speculative strategies to leverage their results.

Suitable for: Investors who can assume the risk of potential loss in value of their investment
in the hope of achieving substantial and rapid gains. They are not suitable for investors who
must conserve their principal or who must maximize current income.

Growth Funds

Generally invest in stocks for growth rather than current income. Growth funds are more
likely to invest in wellestablished companies where the company itself and the industry in
which it operates are thought to have good long-term growth potential. Growth funds provide
low current income, but the investor's principal is more stable than it would be in an
aggressive growth fund. While the growth potential may be less over the short term, many
growth funds have superior long-term performance records. They are less likely than
aggressive growth funds to invest in smaller companies which may provide short-term
substantial gains at the risk of substantial declines.

Suitable for: Although growth funds are more conservative than aggressive growth funds,
they are still relatively volatile. They are suitable for growth-oriented investors but not
investors who are unable to assume risk or who are dependent on maximizing current income
from their investments.
International/Global Funds

International funds seek growth through investments in companies outside the United States.
Global funds seek growth by investing in securities around the world, including the United
States. Both provide investors with another opportunity to diversify their mutual fund
portfolio, since foreign markets do not always move in the same direction as the U.S. The
best way to invest abroad is through mutual funds, rather than direct investment in a foreign
security. Most investors are unfamiliar with foreign investment practices and currencies and
may not have a clear understanding of how economic or political events can affect foreign
securities. An investor in an international mutual fund doesn't have to worry about trading
practices, recordkeeping, time zones or other laws and customs of a foreign country -- that is
all handled by the fund's money manager. International and global funds can invest in
common stocks or bonds of foreign firms and governments. Many international funds invest
in a particular country or region of the world.

Suitable for: While international and global funds offer opportunities for growth and
diversification, these types of funds do carry some additional risks over domestic funds and
should be carefully evaluated and selected according to the investor's objectives, timeframe
and risk profile. Because most international and global funds are considered to be aggressive
growth funds or growth funds, investors must be willing to assume the risk of potential loss
in value in the hope of achieving substantial gains. They are not suitable for investors who
must conserve their principal or maximize current income.

Growth and Income Funds

Growth and income funds seek long-term growth of capital as well as current income. The
investment strategies used to reach these goals vary among funds Some invest in a dual
portfolio consisting of growth stocks and income stocks, or a combination of growth stocks,
stocks paying high dividends, preferred stocks, convertible securities or fixed-income
securities such as corporate bonds and money market instruments. Others may invest in
growth stocks and earn current income by selling covered call options on their portfolio
stocks.

Suitable for: Growth and income funds have low to moderate stability of principal and
moderate potential for current income and growth. They are suitable for investors who can
assume some risk to achieve growth of capital but who also want to maintain a moderate
level of current income.
Fixed-Income Funds

The goal of fixed income funds is to provide high current income consistent with the
preservation of capital. Growth of capital is of secondary importance Income funds that
invest primarily in common stocks are classified as equity income funds (see next listing).
Those that invest primarily in bonds and preferred stocks are classified as fixed-income
funds. These funds invest in corporate bonds or government-backed mortgage securities that
have a fixed rate of return. Since bond prices fluctuate with changing interest rates, there is
some risk involved despite the fund's conservative nature. When interest rates rise, the market
price of fixed-income securities declines and so will the value of the income funds'
investments. Conversely, in periods of declining interest rates, the value of fixed-income
funds will rise and investors will enjoy capital appreciation as well as income Fixed-income
funds offer a higher level of current income than money market funds, but a lower stability of
principal. They are generally more stable in price than funds that invest in stocks. Within the
fixed-income category, funds vary greatly in their stability of principal and in their dividend
yields. High-yield funds, which seek to maximize yield by investing in lower-rated bonds of
longer maturities, entail less stability of principal than fixed-income funds that invest in
higher-rated but lower-yielding securities. Some fixed-income funds seek to minimize risk by
investing exclusively in securities whose timely payment of interest and principal is backed
by the full faith and credit of the U.S. Government. These include securities issued by the
U.S. Treasury, the Government National Mortgage Association ("Ginnie Mae" securities), the
Federal National Mortgage Association ("Fannie Maes") and Federal Home Loan Mortgage
Corporation ("Freddie Macs"). All are backed by pools of mortgages.

Suitable for: Fixed-income funds are suitable for investors who want to maximize current
income and who can assume a degree of capital risk in order to do so. Again, carefully read
the prospectus to learn if a fund's investment policy with respect to yield and risk coincides
with your own objectives.

Balanced/Equity Income funds

Equity income funds seek high current yield by investing primarily in equity securities of
companies which pay high dividends. Unlike interest payments on bonds, dividends on equity
securities can change as companies raise or lower their dividends. Since yield-oriented stocks
are more volatile than comparably rated fixed-income securities, equity income funds offer
less stability of principal than fixed-income funds. Balanced funds are more evenly invested
in equities and income securities.

Suitable for: Balanced and equity income funds are suitable for conservative investors who
want high current yield with some growth.

Money Market Funds

For the cautious investor, these funds provide a very high stability of principal while seeking
a moderate to high current income. They invest in highly-liquid, virtually risk-free, short-
term debt securities of agencies of the U.S. Government, banks and corporations and U.S.
Treasury Bills. They have no potential for capital appreciation.

Tax-exempt money market funds invest in securities that provide safety of principal, liquidity
and income exempt from federal income taxes by investing in short-term, high-rated
municipal obligations. Because of their short-term investments, money market mutual funds
are able to keep a constant share price; only the yield fluctuates. Therefore, they are an
attractive alternative to bank accounts. With yields that are generally competitive with -- and
usually somewhat higher than -- yields on bank certificates of deposit (CDs), they offer
several advantages:

· Money can be withdrawn any time without penalty. Money market funds also
offer check writing privileges.
· Although not insured by the FDIC or FSLIC, money market funds invest only
in highlyliquid, short-term, top-rated money market instruments.
· Money market funds are suitable for conservative investors who want high
stability of principal and moderate current income with immediate liquidity.

Suitable for: Money market funds are suitable for conservative investors who want high
stability of principal and moderate current income with immediate liquidity.

Municipal Bond Funds

Municipal Bond Funds or "Muni" bond funds provide higher tax-exempt income than tax-
exempt money market funds by investing in longer-maturity (and often lower-rated)
securities, which generally offer higher yields than the shortterm, high-rated securities in
which tax-exempt money market funds invest Municipal bond funds vary greatly in the
quality and maturity of the municipal bonds they invest in. The longer the maturity, the
higher the yield. Also, the lower the credit rating of the issuer, the greater the risk and the
higher the yield

While municipal bond funds generally provide lower yields than income funds with debt
obligations of similar maturities and ratings, for an investor in a high marginal tax bracket the
after-tax yields of municipal bond funds will be higher. The price and yield of municipal
bond funds will fluctuate moderately with interest rates. As interest rates decline, the value of
principal increases while yield decreases; as rates increase, bond prices decline but yields
increase.

Suitable for: Suitable for investors in medium to higher tax brackets who want current
income free from federal income tax.

Double & Triple Tax-Exempt Bond Funds

These bond funds provide the investor with an even greater tax advantage by investing in
municipal bonds of a single state. Triple tax-exempt funds are exempt from income tax in a
specific city. Thus they generate income exempt from not only federal income tax but also
from state and/or city income tax for residents of those jurisdictions. Like all bond funds, the
value of the shares will fluctuate with interest rates, as will the current yield. Also, the
stability of principal and yield levels vary with the quality and maturity length of the bonds in
which the funds invest. Lack of geographic diversification increases credit risk of these funds
compared with national funds.

Suitable for: These funds are suitable for investors in medium to high tax brackets in high tax
states who want income with maximum exemption from taxes.

Specialty/Sector Funds

These funds invest in securities of a specific industry or sector of the economy such as health
care, high technology, leisure, utilities or precious metals Because such funds invest
primarily in one sector, they do not offer the element of downside risk protection found in
mutual funds that invest in a broad range of industries. However, the funds do enable
investors to diversify holdings among many companies within an industry, a more
conservative approach than investing directly in one particular company

Sector funds offer the opportunity for sharp capital gains in cases where the fund's industry is
"in favor" but also entail the risk of capital losses when the industry is out of favor While
sector funds restrict holdings to a particular industry, other specialty funds such as index
funds give investors a broadly-diversified portfolio and attempt to mirror the performance of
various market averages. Index funds generally buy shares in all the companies composing
the S&P 500 Stock Index or other broad stock market indices

Asset allocation funds move funds among a variety of markets and instruments in response to
the fund manager's view of relative market prospects. They are broadly diversified and
sometimes have higher management fees since there may be a variety of securities in the
portfolio. These funds are suitable for investors who can tolerate a moderate to high degree of
risk, are seeking capital appreciation and to whom dividend income is secondary in
importance. And whatever the instruments, social responsibility funds apply moral and
ethical as well as economic principles in the selection of securities

Suitable for: Specialty funds are suitable for investors seeking to invest in a particular
industry who can monitor industry performance regularly and alter investment strategies
accordingly. Investors must be willing to assume the risk of potential loss in value of their
investment in the hope of achieving substantial gains. They are not suitable for investors who
must conserve their principal or maximize current income.

BENEFITS OF MUTUAL FUNDS

1) Professional Investment Management: By pooling the funds of thousands of investors,

mutual funds provide full-time, high-level professional management that few individual
investors can afford to obtain independently. Such management is vital to achieving results in
today's complex markets. Your fund managers' interests are tied to yours, because their
compensation is based not on sales commissions, but on how well the fund performs. These
managers have instantaneous access to crucial market information and are able to execute
trades on the largest and most cost-effective scale. In short, managing investments is a full-
time job for professionals.

2) Diversification: Mutual funds invest in a broad range of securities. This limits investment
risk by reducing the effect of a possible decline in the value of any one security. Mutual fund
shareowners can benefit from diversification techniques usually available only to investors
wealthy enough to buy significant positions in a wide variety of securities.

3) Low Cost: If you tried to create your own diversified portfolio of 50 stocks, you'd need at
least $100,000 and you'd pay thousands of dollars in commissions to assemble your portfolio.
A mutual fund lets you participate in a diversified portfolio for as little as $1,000, and
sometimes less. And if you buy a no-load fund, you pay or no sale charges to own them.

4) Convenience and Flexibility: You own just one security rather than many, yet enjoy the
benefits of a diversified portfolio and a wide range of services. Fund managers decide what
securities to trade, clip the bond coupons, collect the interest payments and see that your
dividends on portfolio securities are received and your rights exercised. It's easy to purchase
and redeem mutual fund shares, either directly online or with a phone call.

5) Quick, Personalized Service: Most funds now offer extensive websites with a host of
shareholder services for immediate access to information about your fund account. Or a
phone call puts you in touch with a trained investment specialist at a mutual fund company
who can provide information you can use to make your own investment choices, assist you
with buying and selling your fund shares, and answer questions about your account status.

6) Ease of Investing: You may open or add to your account and conduct transactions or
business with the fund by mail, telephone or bank wire. You can even arrange for automatic
monthly investments by authorizing electronic fund transfers from your checking account in
any amount and on a date you choose. Also, many of the companies featured at this site allow
account transactions online.

7) Total Liquidity, Easy Withdrawal: You can easily redeem your shares anytime you need
cash by letter, telephone, bank wire or check, depending on the fund. Your proceeds are
usually available within a day or two.

8) Life Cycle Planning: With no-load mutual funds, you can link your investment plans to
future individual and family needs -- and make changes as your life cycles change. You can
invest in growth funds for future college tuition needs, then move to income funds for
retirement, and adjust your investments as your needs change throughout your life. With no-
load funds, there are no commissions to pay when you change your investments.

9) Market Cycle Planning: For investors who understand how to actively manage their
portfolio, mutual fund investments can be moved as market conditions change. You can place
your funds in equities when the market is on the upswing and move into money market funds
on the downswing or take any number of steps to ensure that your investments are meeting
your needs in changing market climates.
A word of caution: since it is impossible to predict what the market will do at any point in
time, staying on course with a long-term, diversified investment view is recommended for
most investors.

10) Investor Information: Shareholders receive regular reports from the funds, including
details of transactions on a year-to-date basis. The current net asset value of your shares (the
price at which you may purchase or redeem them) appears in the mutual fund price listings of
daily newspapers. You can also obtain pricing and performance results for the all mutual
funds at this site, or it can be obtained by phone from the fund.

11) Periodic Withdrawals: If you want steady monthly income, many funds allow you to
arrange for monthly fixed checks to be sent to you, first by distributing some or all of the
income and then, if necessary, by dipping into your principal.

12) Dividend Options: You can receive all dividend payments in cash. Or you can have them
reinvested in the fund free of charge, in which case the dividends are automatically
compounded. This can make a significant contribution to your long-term investment results.
With some funds you can elect to have your dividends from income paid in cash and your
capital gains distributions reinvested.

13) Automatic Direct Deposit: You can usually arrange to have regular, third-party payments
-- such as Social Security or pension checks -- deposited directly into your fund account. This
puts your money to work immediately, without waiting to clear your checking account, and it
saves you from worrying about checks being lost in the mail.

14) Recordkeeping Service: With your own portfolio of stocks and bonds, you would have to
do your own recordkeeping of purchases, sales, dividends, interest, short-term and long-term
gains and losses.

15) Safekeeping: When you own shares in a mutual fund, you own securities in many
companies without having to worry about keeping stock certificates in safe deposit boxes or
sending them by registered mail. You don't even have to worry about handling the mutual
fund stock certificates; the fund maintains your account on its books and sends you periodic
statements keeping track of all your transactions.

16) Retirement and College Plans: Mutual funds are well suited to Individual Retirement
Accounts and most funds offer IRA-approved prototype and master plans for individual
retirement accounts (IRAs) and Keogh, 403(b), SEP-IRA and 401(k) retirement plans. Funds
also make it easy to invest -- for college, children or other long-term goals. Many offer
special investment products or programs tailored specifically for investments for children and
college.

17) Online Services: The internet provides a fast, convenient way for investors to access
financial information. A host of services are available to the online investor including direct
access to no-load companies.

18) Sweep Accounts: With many funds, if you choose not to reinvest your stock or bond fund
dividends, you can arrange to have them swept into your money market fund automatically.
You get all the advantages of both accounts with no extra effort.

19) Asset Management Accounts: These master accounts, available from many of the larger
fund groups, enable you to manage all your financial service needs under a single umbrella
from unlimited check writing and automatic bill paying to discount brokerage and credit card
accounts.

20) Margin: Some mutual fund shares are marginable. You may buy them on margin or use
them as collateral to borrow money from your bank or broker. Call your fund company for
details.

MARKET TRENDS

Alone UTI with just one scheme in 1964, now competes with as many as 400 odd products
and 34 players in the market. In spite of the stiff competition and losing market share, UTI
still remains a formidable force to reckon with.

Last six years have been the most turbulent as well as exiting ones for the industry. New
players have come in, while others have decided to close shop by either selling off or
merging with others. Product innovation is now passé with the game shifting to performance
delivery in fund management as well as service. Those directly associated with the fund
management industry like distributors, registrars and transfer agents, and even the regulators
have become more mature and responsible.

The industry is also having a profound impact on financial markets. While UTI has always
been a dominant player on the bourses as well as the debt markets, the new generation of
private funds which have gained substantial mass are now seen flexing their muscles. Fund
managers, by their selection criteria for stocks have forced corporate governance on the
industry. By rewarding honest and transparent management with higher valuations, a system
of risk-reward has been created where the corporate sector is more transparent then before.

Funds have shifted their focus to the recession free sectors like pharmaceuticals, FMCG and
technology sector. Funds performances are improving. Funds collection, which averaged at
less than Rs100bn per annum over five-year period spanning 1993-98 doubled to Rs210bn in
1998-99. In the current year mobilization till now have exceeded Rs300bn. Total collection
for the current financial year ending March 2000 is expected to reach Rs450bn.

What is particularly noteworthy is that bulk of the mobilization has been by the private sector
mutual funds rather than public sector mutual funds. Indeed private MFs saw a net inflow of
Rs. 7819.34 crore during the first nine months of the year as against a net inflow of Rs.604.40
crore in the case of public sector funds.

Mutual funds are now also competing with commercial banks in the race for retail investor’s
savings and corporate float money. The power shift towards mutual funds has become
obvious. The coming few years will show that the traditional saving avenues are losing out in
the current scenario. Many investors are realizing that investments in savings accounts are as
good as locking up their deposits in a closet. The fund mobilization trend by mutual funds in
the current year indicates that money is going to mutual funds in a big way. The collection in
the first half of the financial year 1999-2000 matches the whole of 1998-99.

India is at the first stage of a revolution that has already peaked in the U.S. The U.S. boasts of
an Asset base that is much higher than its bank deposits. In India, mutual fund assets are not
even 10% of the bank deposits, but this trend is beginning to change. Recent figures indicate
that in the first quarter of the current fiscal year mutual fund assets went up by 115% whereas
bank deposits rose by only 17%. (Source: Thinktank, The Financial Express September, 99)
This is forcing a large number of banks to adopt the concept of narrow banking wherein the
deposits are kept in Gilts and some other assets which improves liquidity and reduces risk.
The basic fact lies that banks cannot be ignored and they will not close down completely.
Their role as intermediaries cannot be ignored. It is just that Mutual Funds are going to
change the way banks do business in the future.
CHAPTER – 3

COMPANY PROFILE
COMPANY PROFILE

OVERVIEW

A.C. Agarwal is a premier integrated financial services provider, and ranked among the top
five in the country in all its business segments, services over 16 million individual investors in
various capacities, and provides investor services to over 300 corporate, comprising the who is
who of Corporate India. A.C. Agarwal covers the entire spectrum of financial services such as
Stock broking, Depository Participants, Distribution of financial products - mutual funds,
bonds, fixed deposit, equities, Insurance Broking, Commodities Broking, Personal Finance
Advisory

Services, Merchant Banking & Corporate Finance, placement of equity, IPO’s, among others.
A.C. Agarwal has a professional management team and ranks among the best in technology,
operations and research of various industrial segments.

A.C. AGARWAL -IN EARLY DAYS

The birth of A.C. Agarwal was on a modest scale in 1981. It began with the vision and
enterprise of a small group of practicing Chartered Accountants who founded the flagship
company A.C. Agarwal Consultants Limited. We started with consulting and financial
accounting automation, and carved inroads into the field of registry and share accounting by
1985. Since then, we have utilized our experience and superlative expertise to go from strength
to strength…to better our services, to provide new ones, to innovate, diversify and in the
process, evolved A.C. Agarwal as one of India’s premier integrated financial service
enterprises.

Thus, over the last 20 years A.C. Agarwal has travelled the success route, towards building a
reputation as an integrated financial services provider, offering a wide spectrum of services.
And we have made this journey by taking the route of quality service, path Breaking
innovations in service, versatility in service and finally…totality in service. Our highly
qualified manpower, cutting-edge technology, comprehensive infrastructure and total
customer-focus has secured for us the position of an emerging financial services giant enjoying
the confidence and support of an enviable clientele across diverse fields in the financial world.

Our values and vision of attaining total competence in our servicing has served as the building
block for creating a great financial enterprise, which stands solid on our fortresses of financial
strength - our various companies. With the experience of years of holistic financial servicing
behind us and years of complete expertise in the industry to look forward to, we have now
emerged as a premier integrated financial services provider. And today, we can look with pride
at the fruits of our mastery and experience – comprehensive financial services that are
competently segregated to service and manage a diverse range of customer requirements

A.C. AGARWAL - CREDO

OUR FOCUS OUR CLIENTS

 Clients are the reason for our being.

 Personalized service, professional care; pro-activeness are the values that help us
nurture enduring relationships with our clients.

RESPECT FOR INDIVIDUAL

Each and every individual is an essential building block of our organization.

We are the kiln that hones individuals to perfection. Be they our employees, shareholders or
investors. We do so by upholding their dignity & pride, inculcating trust and achieving a
sensitive balance of their professional and personal lives.

TEAM WORK

 None of us is more important than all of us.

 Each team member is the face of A.C. Agarwal. Together we offer diverse services with
speed, accuracy and quality to deliver only one product: excellence. Transparency, co-
operation, invaluable individual contributions for a collective goal, and respecting
individual uniqueness within a corporate whole, are how we deliver again and again.

RESPONSIBLE CITIZENSHIP

 A social balance sheet is as rewarding as a business one.

 As a responsible corporate citizen, our duty is to foster a better environment in the
society where we live and work. Abiding by its norms, and behaving responsibly
towards the environment, are some of our growing initiatives towards realizing it.

INEGRITY

 Everything else is secondary.

  Professional and personal ethics are our bedrock. We take pride in an environment that
encourages honesty and the opportunity to learn from failures than camouflage them.
We insist on consistency between works and actions.

A.C. AGARWAL ALLIANCES

A.C. Agarwal Computer share Private Limited is a 50:50 joint venture of A.C. Agarwal
Consultants Limited and Computer share Limited, Australia. Computer share Limited is
world's largest -- and only global -- share registry, and a leading financial market services
provider to the global securities industry.

The joint venture with Computer share, reckoned as the largest registrar in the world, servicing
over 60 million shareholder accounts for over 7,000 corporations across eleven countries
spread across five continents. Computer share manages more than 70 million shareholder
accounts for over 13,000 corporations around the world. A.C. Agarwal Computer share Private
Limited, today, is India's largest Registrar and Share Transfer Agent servicing over 300
corporate and mutual funds and 16 million investors.

ACHIEVEMENTS

 Among the top 5 stock brokers in India (4% of NSE volumes)

 India's No. 1 Registrar & Securities Transfer Agents
 Among the to top 3 Depository Participants
 Largest Network of Branches & Business Associates
 ISO 9002 certified operations by DNV
 Among top 10 Investment bankers
 Largest Distributor of Financial Products
 Adjudged as one of the top 50 IT uses in India by MIS Asia
 Full Fledged IT driven operations

QUALITY POLICY

To achieve and retain leadership, A.C. Agarwal shall aim for complete customer satisfaction,
by combining its human and technological resources, to provide superior quality financial
services. In the process, A.C. Agarwal will strive to exceed Customer's expectations.
QUALITY OBJECTIVES

A.C. AGARWAL STOCK BROKING LIMITED

Member - National Stock Exchange (NSE), The Bombay Stock Exchange (BSE), and The
Hyderabad Stock Exchange (HSE).

A.C. Agarwal Stock Broking Limited, one of the cornerstones of the A.C. Agarwal edifice,
flows freely towards attaining diverse goals of the customer through varied services. Creating
a plethora of opportunities for the customer by opening up investment vistas backed by
research-based advisory services. Here, growth knows no limits and success recognizes no
boundaries. Helping the customer create waves in his portfolio and empowering the investor
completely is the ultimate goal.

STOCK BROKING SERVICES

It is an undisputed fact that the stock market is unpredictable and yet enjoys a high success rate
as a wealth management and wealth accumulation option. The difference between
unpredictability and a safety anchor in the market is provided by in-depth knowledge of market
functioning and changing trends, planning with foresight and choosing one option with care.
This is what we provide in our Stock Broking services.

We offer services that are beyond just a medium for buying and selling stocks and shares.
Instead, we provide services which are multi-dimensional and multi-focused in their scope.
There are several advantages in utilizing our Stock Broking services, which are the reasons
why it is one of the best in the country.

We offer trading on a vast platform; National Stock Exchange, Bombay Stock Exchange and
Hyderabad Stock Exchange. More importantly, we make trading safe to the maximum possible
extent, by accounting for several risk factors and planning accordingly. We are assisted in this
task by our in-depth research, constant feedback and Sound advisory facilities. Our highly
skilled research team, comprising of technical analysts as well as fundamental specialists,
secure result-oriented information on market trends, market analysis and market predictions.

This crucial information is given as constant feedback to our customers, through daily reports
delivered thrice daily; The Pre-session Report, where market scenario for the day is predicted,
The Mid-session Report, timed to arrive during lunch break, where the market forecast for the
rest of the day is given and The Post-session Report, the final report for the day, where the
market and the report itself is reviewed. To add to this repository of information, we publish a
monthly magazine & ldquo; A.C. Agarwal;

Our Stock Broking services are widely networked across India, with the number of our trading
terminals providing retail stock broking facilities. Our services have increasingly offered
customer-oriented convenience, which we provide to a spectrum of investors, high-net worth
or otherwise, with equal dedication and competence. But true to our spirit, this success is not
our final destination, but just a platform to launch further enhanced quality services to provide
you the latest in convenient, customer-friendly stock management.

Over the years we have ensured that the trust of our customers is our biggest returns. Factors
such as our success in the electronic custody business has helped build on our tradition of trust
even more.

Consequentially our retail client base expanded very fast.

To empower the investor further we have made serious efforts to ensure that our research calls
are disseminated systematically to all our stock broking clients through various delivery
channels like email, chat, SMS, phone calls etc.

Our foray into commodities broking has been path breaking and we are in the process of
converting existing traders in commodities into the more organized mainstream of trading in
commodity futures, both as a trading and risk hedging mechanism.

In the future, our focus will be on the emerging businesses and to meet this objective, we have
enhanced our manpower and revitalized our knowledge base with enhances focus on Futures
and Options as well as the commodities business.

DEPOSITORY SERVICES

The onset of the technology revolution in financial services Industry saw the emergence of
A.C. Agarwal as an electronic custodian registered with National Securities Depository Ltd
(NSDL) and Central Securities Depository Ltd (CSDL) in 1998. A.C. Agarwal set standards
enabling further comfort to the investor by promoting paperless trading across the country and
emerged as the top 3 Depository Participants in the country in terms of customer serviced.

Offering a wide trading platform with a dual membership at both NSDL and CDSL, we are a
powerful medium for trading and settlement of dematerialized shares. We have established live
DPMs, Internet access to accounts and an easier transaction process in order to offer more
convenience to individual and corporate investors. A team of professional and the latest
technological expertise allocated exclusively to our demat division including technological
enhancements like SPEEDe; make our response time quick and our delivery impeccable. A
wide national network makes our efficiencies accessible to all.

DISTRIBUTION OF FINANCIAL PRODUCTS

The paradigm shift from pure selling to knowledge-based selling drives the business today.
With our wide portfolio offerings, we occupy all segments in the retail financial services
industry.

A 1600 team of highly qualified and dedicated professionals drawn from the best of academic
and professional backgrounds are committed to maintaining high levels of client service
delivery. This has propelled us to a position among the top distributors for equity and debt
issues with an estimated market share of 15% in terms of applications mobilized, besides being
established as the leading procurer in all public issues.

To further tap the immense growth potential in the capital markets we enhanced the scope of
our retail brand, A.C. Agarwal – the Finapolis, thereby providing planning and advisory
services to the mass affluent. Here we understand the customer needs and lifestyle in the
context of present earnings and provide adequate advisory services that will necessarily help
in creating wealth. Judicious planning that is customized to meet the future needs of the
customer deliver a service that is exemplary. The market-savvy and the ignorant investors, both
find this service very satisfactory. The edge that we have over competition is our portfolio of
offerings and our professional expertise. The investment planning for each customer is done
with an unbiased attitude so that the service is truly customized.

Our monthly magazine, Finapolis, provides up-dated market information on market trends,
investment options, opinions etc. Thus, empowering the investor to base every financial move
on rational thought and prudent analysis and embark on the path to wealth creation.

ADVISORY SERVICES

Under our retail brand ‘A.C. Agarwal – the Finapolis', we deliver advisory services to a cross-
section of customers. The service is backed by a team of dedicated and expert professionals
with varied experience and background in handling investment portfolios. They are continually
engaged in designing the right investment portfolio for each customer according to individual
needs and budget considerations with a comprehensive support system that focuses on trading
customers' portfolios and providing valuable inputs, monitoring and managing the portfolio
through varied technological initiatives.

This is made possible by the expertise we have gained in the business over the years. Another
venture towards being investor-friendly is the circulation of a monthly magazine called ‘A.C.
Agarwal - the Finapolis'. Covering the latest of market news, trends, investment schemes and
research-based opinions from experts in various financial fields.

PRIVATE CLIENT GROUP

This specialized division was set up to cater to the high-net-worth individuals and institutional
clients keeping in mind that they require a different kind of financial planning and management
that will augment not just existing finances but their life-style as well. Here we follow a hard-
nosed business approach with the soft touch of dedicated customer care and personalized
attention.

For this purpose, we offer a comprehensive and personalized service that encompasses
planning and protection of finances, planning of business needs and retirement needs and a
host of other services, all provided on a one-to-one basis.
CHAPTER – 4

ANALYSIS &
INTERPRETATION
ANALYSIS & INTERPRETATION

PREFACE

The analysis is done to know whether, Mutual fund, is it investor’s best choice. The
information is collected of different sectors which include FMCG Sector, Pharma Sector and
Index sector.

The returns of selected Mutual funds and selected Equities are calculated for 3&6 months and
1year period. Equities closing price are also given for half year and annually. The information
collected is shown in graphical form to make it simpler and easier to understand by the
Reader. The information regarding all Mutual Funds and Equities is given in the Table.

The Analysis is done by comparing the Particular Sector Mutual Funds with Equities and also
with Relative Sensex and Nifty, index of BSE and NSE. The average of Particular Sector
Mutual Funds and Equities is taken and returns are calculated. Let us take for example, In
FMCG Sector the Returns of ICICI Prudential FMCG Fund, Franklin FMCG fund and
Magnum FMCG Fund are added and then divided by 3 hence the average is taken as returns
of FMCG Mutual Funds in the same way Returns of HLL Equity, Dabur Equity, Colgate
Equity, Tata tea Equity and Britannia Equity are also added and divided by 5 and the average
is taken as the returns of FMCG sector Equities. The Returns of Relative Sensex and Nifty is
Calculated and then the Analysis is done to know the position of Mutual Funds in the market
in long term and short-term period. The period of 3 months and 6 months is taken as short
term and period of 1 year is taken as long-term period. The comparison of aggregate Mutual
Funds and Equities is shown in Table.
 FMCG – SECTOR MUTUAL FUNDS & EQUITIES

(TABLE :4.1) RETURNS OF FMCG SECTOR EQUITIES & MUTUAL

FUNDS
Absolute returns %
NAME 3 6 MONTHS 1 YEAR
MONTHS
Franklin FMCG Fund 15.12 -9.9 55.20
Pru ICICI FMCG Fund 0.57 0.30 0.12
Magnum FMCG Fund 0.21 0.04 0.10
Hind Lever ltd Equity 0.84 0.95 0.84
Dabur equity -0.82 0.38 0.01
Colgate Equity 0.72 0.48 0.79
Britannia Equity 0.0019 0.08 0.0013
Tata tea Equity 0.014 0.05 0.06

RETURNS OF EQUITIES

(BAR DIAGRAM – 4.1) RETURNS OF MUTUAL FUNDS & EQUITIES

RETURNS OF FMCG SECTOR
EQUITIES & MUTUAL FUNDS

60
Franklin FMCG
40 Fund
Pru ICICI
20
FMCG Fund
0 Magnum
1 2 3 FMCG Fund
-20
60
50
40 Franklin
FMCG Fund
30
Pru ICICI
20
FMCG Fund
10
Magnum
0 FMCG Fund
-10 1 2 3
-20

1.2
1
0.8
0.6
0.4 Series1
0.2
Series2
0
-0.2 Hind Dabur Colgate Britannia Tata tea Series3
-0.4 Lever ltd equity Equity Equity Equity
-0.6 Equity
-0.8
-1

60
50
40
30 Series1
20 Series2
10 Series3
0
-10
-20
60

50

40

30

Series1
20 Series2
Series3

10

0
Franklin FMCG Pru ICICI Magnum Hind Lever ltd Dabur equity Colgate Equity Britannia Tata tea Equity
Fund FMCG Fund FMCG Fund Equity Equity

-10

-20

(TABLE :4.1A)
FMCG MUTUAL FUNDS VS EQUITIES & RELATIVE INDEX
NAME ABSOLUTE RETURNS IN %

3 6 1 YEAR
MONTHS MONTHS

FMCG SECTOR 0.15 0.10 0.55

MUTUAL FUNDS

FMCG SECTOR 0.023 0.019 0.017

EQUITIES

RELATIVE TO 594.13 1476.18 1725.89

SENSEX

RELATIVE TO 6561.00 9965.46 9830.72

NIFTY
 FMCG Mutual Funds includes Franklin FMCG Fund, Prudential ICICI FMCG Fund
and Magnum FMCG fund.
 FMCG Equities includes Hindustan lever ltd, Dabur, Colgate, Tata Tea and Britannia

ABSOLUTE RETURNS OF MUTUAL FUNDS AND EQUITIES

0.6
0.5
0.4 FMCG SECTOR
MUTUAL FUNDS
0.3
FMCG SECTOR
0.2 EQUITIES
0.1
0
1 2 3

ABSOLUTE RETURNS OF INDEX

12000
10000
8000 RELATIVE TO
SENSEX
6000
RELATIVE TO
4000 NIFTY
2000
0
1 2 3
 ABSOLUTE RETURNS OF INDEX
12000
10000
8000 RELATIVE TO
SENSEX
6000
RELATIVE TO
4000 NIFTY
2000
0
1 2 3
ANALYSIS

 As observed from the Table, we can say that ICICI Prudential FMCG Fund, Franklin
FMCG Fund and Magnum FMCG Fund Gives Good Return. The Bar diagram
representation makes it very clear.
 In FMCG Equities from Table and Bar Diagram we can see that Hindustan lever gives
maximum Returns than any other Equities. The next comes Colgate and TataTea
which gives almost the same Returns. Tata tea Equities shows good Returns only in
long term period Whereas Dabur gives Negative Returns in short term period.
 The Returns of individual Mutual Fund of FMCG Sector in particular period is
summed up and then average is taken as the Returns of FMCG Mutual Funds. In the
same manner individual Equity is summed up and the average is taken as FMCG
Equities. These aggregated Mutual funds and Equities are now compared in Table
with the Nifty and Sensex, the Index of NSE and BSE.
 FMCG Mutual funds, as observed from the Table and Line Diagram grows rapidly.
FMCG Equities show very good Returns in long term and short-term period i.e., in 3
& 6 months and 1 year’s period. But Dabur shows negative returns in 3 months from
the Table.
 When comparison is made between Mutual Funds and Equities, Returns are not
similar in both short term and long-term period as we can see clearly from the Line
Diagram.
 As Sensex and Nifty grows in the Market, FMCG Mutual Funds shows upward trend
whereas equities show down ward. Both Sensex and Nifty is going at different level
having different Exchanges. We can see Mutual Funds, Equities, Nifty and Sensex all
together in the line Diagram.
 Overall Performance of Equities and Mutual Funds is not satisfactory, mutual funds
shows better yieldings compare to equities. Equities shows negative returns. If
investor don’t want to take risk, then he must go for Mutual funds as we can observe
form the Table that in individual Equity sometimes returns are negative for example
in Dabur Equity, but in Mutual Funds we can see negative Returns but compare to
equities mutual funds are risk minimising.
PHARMA-SECTOR MUTUAL FUNDS & EQUITIES
(TABLE :4.4)
HIGH/LOW & RETURNS OF PHARMA SECTOR EQUITIES & MFS

ABSOLUTE RETURS %

NAME 3MONTHS 6MONTHS 1 YEAR

Franklin Pharma Fund 0.07 0.05 0.46
Magnum Pharma Fund 0.29 -0.74 -0.02
UTI Pharma & health fund 0.08 0.01 0.27
Dr Reddy’s Equity 0.083 0.072 0.062
Ranbaxy Equity 0.027 0.027 0.042
Orchid equity 0.013 -0.012 0.010
Cipla equity 0.025 0.029 0.26
Sun Pharma Equity 0.022 0.024 0.030

(BAR DIAGRAM) RETURNS OF MUTUAL FUNDS

0.6
0.4
Franklin Pharma
0.2
Fund
0 Magnum Pharma
-0.2 1 2 3 Fund
UTI Pharma &
-0.4
health fund
-0.6
-0.8
 (BAR DIAGRAM) RETURNS OF MUTUAL FUNDS
0.6
0.4
Franklin
0.2
Pharma Fund
0 Magnum
-0.2 1 2 3 Pharma Fund
UTI Pharma &
-0.4
health fund
-0.6
-0.8

(BAR DIAGRAM 4.8) RETURNS OF EQUITIES

0.3

0.25

0.2

0.15
Series1
Series2
Series3
0.1

0.05

0
Dr Reddy’s Equity Ranbaxy Equity Orchid equity Cipla equity Sun Pharma Equity

-0.05
60

50

40

30

Series1
20 Series2
Series3

10

0
Franklin FMCG Pru ICICI Magnum Hind Lever ltd Dabur equity Colgate Equity Britannia Tata tea Equity
Fund FMCG Fund FMCG Fund Equity Equity

-10

-20
0.6

Series1
Series2
Series3
0.4

0.2

0
Franklin Magnum UTI Pharma & Dr Reddy’s
Pharma Fund Pharma Fund health fund Equity

-0.2

-0.4

-0.6

-0.8
 (TABLE :4.4A)
PHARMA – SECTOR MUTUAL FUNDS VS EQUITIES & RELATIVE INDEX
NAME ABSOLUTE RETURNS IN %

3 6 1
MONTHS MONTHS YEAR

PHARMA 0.44 0.80 0.75

MUTUAL FUNDS

PHARMA 0.17 0.16 0.40

EQUITIES

RELATIVE TO 594.13 1476.18 1725.89

SENSEX

RELATIVE TO 6561.00 9965.46 9830.72

NIFTY

 Pharma Sector Mutual Funds include UTI Pharma & Healthcare Fund, Franklin
Pharma Fund, Magnum Pharma Fund.
 Pharma Sector Equities includes Dr Reddy Labs, Ranbaxy, orchid and Cipla Sun
Pharma.

0.9
0.8
0.7
0.6 PHARMA
0.5 MUTUAL FUNDS
0.4 PHARMA
0.3 EQUITIES
0.2
0.1
0
1 2 3
 (LINE DIAGRAM 4.4)

0.9
0.8
0.7 PHARMA
0.6 MUTUAL
0.5 FUNDS
0.4 PHARMA
0.3 EQUITIES
0.2
0.1
0
1 2 3

12000
10000
8000 RELATIVE TO
SENSEX
6000
RELATIVE TO
4000 NIFTY
2000
0
1 2 3

12000
10000
8000 RELATIVE TO
SENSEX
6000
RELATIVE TO
4000 NIFTY
2000
0
1 2 3
ABSOLUTE RETURNS OF MUTUAL FUNDS, EQUITIES & INDEX

350

300

250

200
PHARMA MF
PHARMA EQUITIES
RELATIVE SENSEX
RELATIVE NIFTY
150

100

50

0
3 MTHS 6 MTHS 1 YR 3 YRS
PERIOD
ANALYSIS

 Pharma Sector fund, as, we can see clearly that all Mutual Funds performance in long
term period and short-term period is very good.
 From Table we can also see that Dr Reddy’s Equity, Sun Pharma Equity and Ranbaxy
& Cipla equity also performs well. But we can also notice that Pharma Sector Equity
such as orchid gives negative Returns in the period of 6months. In the same way
equity also gives very poor Returns during the study period.
 The Returns of individual Mutual Fund of Pharma-sector in particular period is
summed up and then average is taken as the Returns of Pharma Sector Mutual Funds.
In the same way individual Equity are summed up and average is taken as Pharma
Sector Equities. These aggregated Mutual funds and Equities are now compared in
Table with the Nifty and Sensex. Pharma Sector Mutual Funds performs well in both
short term and long-term period as noticed form the Table. But sbi pharma sector
shows negative returns in 6months and 1 year. equities give good Returns in short
term but in short term Orchid Equity shows negative returns in 6 months.
 When Both Pharma Sector Mutual Funds and Equities are compared, Mutual Funds
perform better than Equities in long term period. In short term Equities gives good
result but in lone term the performance shows downward trend as we can observe
from the Line Diagram.
 As relative Sensex and Nifty grows in the Market, Pharma Sector Mutual Funds also
shows upward trend but Equities does not show any upward trend in long term period
as we can clearly observe in the Line Diagram showing Comparison between Mutual
Funds, Equities, Sensex and Nifty.
 In long and short Pharma Sector Mutual Funds performs better than Pharma Sector
Equities. It is advisable to invest in Pharma Sector Mutual Fund rather than Equity,
because we can notice from the Line Diagram that Equities does not show any upward
trend with the growth in Mutual Funds, Sensex, and Nifty as we have seen from Table
that Individual Pharma Equity gives negative Returns whereas the case is never done
with Mutual Funds.
CHAPTER - 5

CONCLUSIONS &
SUGGESTION
CONCLUSIONS & SUGGESTIONS

Conclusion

we can conclude that investing in FMCG sector mutual funds can provide good returns for
investors, particularly ICICI Prudential FMCG Fund, Franklin FMCG Fund and Magnum
FMCG Fund. Among individual FMCG equities, Hindustan Lever gave the highest returns
followed by Colgate and Tata Tea, while Dabur showed negative returns in the short term.
The comparison between FMCG mutual funds and equities showed that the returns were not
similar in both the short-term and long-term periods. However, in general, mutual funds
performed better than equities and were less risky for investors.

The analysis also showed that as Sensex and Nifty grew in the market, FMCG mutual funds
showed an upward trend, while FMCG equities showed a downward trend. Overall, the
performance of equities and mutual funds was not satisfactory, but mutual funds showed
better yields compared to equities.

In conclusion, investors who do not want to take high risks should consider investing in
mutual funds, as they provide better risk minimization and can offer good returns in the long-
term. However, investors should always conduct their own research and consult with a
financial advisor before making any investment decisions.

1. Mutual funds show better yields compared to equities: Mutual funds are a popular
investment option because they offer the potential for better returns than equities. This
is because mutual funds provide diversification benefits by investing in a mix of stocks,
bonds, and other securities. This helps to reduce the risk associated with investing in
individual stocks or securities, and can lead to better returns over time.
2. Mutual funds are better to invest in than equities, even though they may show negative
returns in the short term: While it is true that mutual funds may show negative returns
in the short term, it is important to consider the long-term performance of the
investment. Mutual funds are typically designed to be held for the long term, and over
time they can offer better returns than equities. Therefore, investors should focus on
 the long-term performance of their investments and not be too concerned about short-
term fluctuations.
3. In FMCG sector, Franklin FMCG Fund shows negative returns in 6 months: Despite
the generally positive performance of mutual funds, some individual funds may
experience negative returns in certain time periods. For example, in the FMCG sector,
the Franklin FMCG Fund showed negative returns in the 6-month period. Investors
should be aware of the performance of individual funds before investing and consider
a mix of funds to diversify their investment.
4. In the pharma sector, SBI Mutual Fund shows negative returns both in short and long
term, while in the FMCG sector, Dabur shows negative returns in 3 months: It is
important for investors to conduct research and understand the performance of
individual funds or equities in different sectors. In the pharma sector, the SBI Mutual
Fund showed negative returns in both the short and long term, while in the FMCG
sector, Dabur showed negative returns in the short term. Investors should consider
these factors when making investment decisions and seek advice from a financial
advisor if needed.
5. In the pharma sector, Orchid shows negative returns in 6 months: Similar to the
performance of individual funds in the FMCG sector, some individual funds in the
pharma sector may experience negative returns in certain time periods. In this case, the
Orchid fund showed negative returns in the 6-month period. Investors should be aware
of the performance of individual funds and consider diversifying their investments
across multiple funds or sectors.

In summary, investors should conduct research and consider a mix of mutual funds and
equities to diversify their investment portfolio. While mutual funds can offer better yields
compared to equities, investors should focus on the long-term performance of their
investments and not be too concerned about short-term fluctuations. It is important to be aware
of the performance of individual funds or equities in different sectors and seek advice from a
financial advisor if needed.
Suggestion

1. Diversify your portfolio: It is always advisable to diversify your investment portfolio

by investing in different asset classes and sectors. This will help in reducing the risk
and increase the chances of generating better returns. For example, instead of investing
all your money in one sector, you can invest in multiple sectors like FMCG, Pharma,
Technology, etc. This will help in reducing the impact of sector-specific risks on your
investments.
2. Choose the right mutual fund: While selecting a mutual fund, you should consider
factors like the fund manager's experience, past performance, expense ratio, and
investment objective. These factors will help in selecting the right mutual fund for your
investment. For example, if you are looking for a long-term investment option, you
can choose a mutual fund with a proven track record of generating consistent returns
over a longer period.
3. Invest for the long term: Mutual funds are meant for long-term investments, and it is
always advisable to hold on to them for a longer duration. This will help in generating
better returns and also reduce the impact of short-term market fluctuations. For
example, if you invest in a mutual fund for 5-10 years, you are likely to generate higher
returns compared to a shorter investment horizon of 1-2 years.
4. Stay updated with the market trends: It is crucial to stay updated with the latest market
trends and changes in economic policies that might impact your investments. This will
help in making informed investment decisions. For example, if there is a change in the
government's policies related to a particular sector, it might impact the performance of
the stocks or mutual funds in that sector. By staying updated with such information,
you can make timely investment decisions.
5. Avoid investing in individual stocks: Investing in individual stocks can be risky, and
it requires a lot of research and expertise. It is always better to invest in mutual funds
that provide diversification across various stocks and sectors. For example, if you
invest in a mutual fund that invests in multiple stocks across different sectors, you are
less likely to be impacted by the performance of a single stock.
6. Consult with a financial advisor: If you are new to investing or not confident about
your investment decisions, it is advisable to consult with a financial advisor. A
financial advisor can help in selecting the right investment options based on your risk
appetite and investment goals. They can also help in creating a personalized investment
 plan and monitor your investments to ensure that they are aligned with your financial
goals.

The comparative study on mutual funds and other investment schemes reveals several
important insights that can help investors make informed investment decisions. The
analysis indicates that mutual funds generally offer better yields compared to equities.
While mutual funds may show negative returns in the short term, they are still a better
investment option than equities for risk-averse investors. It is advisable for investors to
diversify their portfolio by investing in multiple mutual funds and equities across different
sectors. By doing so, investors can minimize the risk of losses due to market fluctuations.

Investors should also focus on long-term investments in mutual funds and equities to reap
the benefits of compounding and avoid the impact of short-term market volatility. Regular
monitoring of investments is essential, and investors should keep track of the performance
of their mutual funds and equities. By doing so, they can make informed decisions about
buying, holding, or selling their investments.

Choosing the right fund manager is crucial for achieving good returns on investments.
Investors should look for fund managers with a proven track record of delivering
consistent returns and managing risks effectively. In addition, investors should avoid
timing the market by buying and selling their investments based on short-term market
fluctuations. This can lead to losses and can be counterproductive to achieving long-term
investment goals.

The study also highlights the performance of mutual funds and equities in the FMCG and
pharma sectors. In the FMCG sector, Franklin FMCG Fund and Magnum FMCG Fund
offer good returns, while Hindustan Lever, Colgate, and Tata Tea are the top-performing
equities. However, Dabur shows negative returns in the short term. In the pharma sector,
SBI Mutual Fund and Orchid show negative returns in both short and long-term periods.

In conclusion, investors should carefully evaluate the performance of mutual funds and
equities before investing. Diversifying the portfolio, focusing on long-term investments,
regular monitoring, choosing the right fund manager, and avoiding timing the market are
some of the key strategies that can help investors achieve their investment goals.
CHAPTER - 6

BIBILIOGRAPHY
I. TEXT BOOK
 Fischer, D. E., Jordan, R. J. (1975). Security Analysis and Portfolio
Management. United Kingdom: Prentice-Hall.
 Sadhak, H. (1997). Mutual Funds in India: Marketing Strategies and Investment
Practices. India: SAGE Publications.

II . WEB SITES
 www.mutualfundsindia.com
 www.amfiindia.com
 www.utimf.com
 www.bseindia.com

III. MAGAINES
 Business India
 Business World

IV. NEWS PAPERS

 Economic Times
 Business Standard.