An Analytical Study of Mutual Fund Schemes (Bond Funds)

Presented to: Prof. Prasad Akolkar Presented by:

Name Chirag Badaya Bhargava R. Sistla Roll no. 02 55

Concept
A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities.

The income earned through these investments and the capital appreciation realised are shared by its unit holders in proportion to the number of units owned by them.
Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.

Source: http://www.mutualfundsindia.com

Advantages of Mutual Funds

Professional Management Diversification Convenient Administration Return Potential

Low Costs
Liquidity Transparency Flexibility Choice of schemes Tax benefits Well regulated

Types of Mutual Funds

Type of Mutual Fund Schemes Structure

Investment Objective
Growth Funds

Special Schemes Industry Specific Schemes Index Schemes Equity Fund

Nature Debt Funds Gilt Funds Income Funds MIPs Short term Plans Balanced Funds

Open Ended Funds

Close Ended Funds

Income Funds

Interval Funds

Balanced Funds
Money Market Funds

Sectoral Schemes

Liquid Funds

Bond Funds- Concept

Investment vehicle Moderate returns-High safety Large portfolio with minimal risk

Risks Associated

Risks

Interest Rate Risk

Credit Risk

Delay Risk

CRISIL Top 5

Product comparison
Factor HDFC Income Fund BSL Dynamic Bond Fund

Nature
Inception Date Scheme Objective

Open Ended Income Scheme

11-Sep-2000 The objective of the scheme is to optimise returns while maintaining a balance of safety, yield and liquidity.

Open ended Income Scheme

27-Sep-2004 The objective of the scheme is to generate optimal returns with high liquidity through active management of the portfolio by investing in High Quality Debt and Money Market Instruments. G-Sec- 50% to 60% Corporate Bonds 25% - 35% Cash/ Liquid instruments - 0% - 25% Mr. Maneesh Dangi Low to Medium

Asset allocation

Debt instruments 80% - 100% Money Market instruments 0- 20% Mr. Shobhit Mehrotra Mr. Miten Lathia Low to Medium

Fund manager Risk profile

Entry load
Exit load Benchmark

NIL
0.50- if within 180 days Nil - After 180 days CRISIL Composite Bond Fund Index

NIL
0.50- if within 180 days Nil - After 180 days CRISIL Composite Bond Fund Index

Comparison
Factor HDFC Income Fund BSL Dynamic Bond Fund

Minimum Investment
Portfolio Characteristics: Avg. Maturity Avg. Credit Rating Avg. Yield to maturity (%) No. Of Holdings Asset Allocation: Equity Debt Cash & Cash Equivalents Commodities Instrument Break up: Debentures GOI Sec Cash/net Current Assets Certificate of Deposit Structured Obligation Floating Rate Debenture Bonds

Rs. 5000
8.94 Yrs AAA 19 (%) 0.00 95.83 4.17 0.00 (%) 48.19 45.84 4.17 1.80 NA NA NA

Rs. 5000
4.30 Yrs AA 9.63 30 0.00 94.72 5.28 0.00 44.15 17.89 5.28 0.25 15.97 10.88 5.55 Source: Value Research

BSL Dynamic Bond Fund

HDFC Income Fund