A STUDY ON DIFFERENT SCHEMES WITH COMPARISON & EVALUATION AMONG THE MUTUAL FUNDS WITH REFERENCE TO THE KOTAK

AMC COMPANY

Presented By: VIKRAM KUMAR SINGH BM010292

OBJECTIVE
To project Mutual Fund as the productive avenue for investing activities. To show the wide range of investment options available in Mutual Funds by explaining its various schemes. To compare the schemes based on Sharpes ratio, Treynors ratio, b Coefficient, Returns and show which scheme is best for the investor based on his risk profile. To help an investor make a right choice of investment, while considering the inherent risk factors. To understand the performance of different schemes in different companies like LIC, SBI, RELIANCE AND KOTAK.

A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

SCOPE OF THE STUDY

The study here has been limited to analyze open-ended equity Growth schemes of different Asset Management Companies namely Kotak Mahindra Mutual Fund, Reliance Mutual Fund, LIC and SBI Mutual Funds each scheme is analyzed according to its performance against the other, based on factors like Sharpes Ratio, Treynors Ratio, b (Beta) Co-efficient, Returns.

A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

RESEARCH METHODOLOGY
The Methodology involves randomly selecting Open-Ended equity schemes of different fund houses of the country. The data collected for this project is basically from one source, that is: Secondary sources: Collection of data from Internet and Books. And some formulas or factors which help to find out the performance of different schemes of mutual funds and compare with the different company mutual funds.

A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

LIMITATION OF THE STUDY

The study is limited only to the analysis of different schemes and its suitability to different investors according to their risk-taking ability. The study is based on secondary data available from monthly fact sheets, websites and other books, as primary data was not accessible. The study is limited by the detailed study of various schemes of Four Asset Management company.

A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

COMPANY PROFILE
Kotak Mahindra is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporates. The group has a net worth of Rs.7,911 crore and employs around 20,000 employees across its various businesses, servicing around 7 million customer accounts through a distribution network of 1,716 branches, franchisees and satellite offices across more than 470 cities and towns in India and offices in New York, California,San Francisco, London, Dubai, Mauritius and Singapore. Kotak Mahindra Asset Management Company Limited (KMAMC), a wholly owned subsidiary of KMBL, is the Asset Manager for Kotak Mahindra Mutual Fund (KMMF). KMAMC started operations in December 1998 and has over 10 Lac investors in various schemes. KMMF offers schemes catering to investors with varying risk - return profiles and was the first fund house in the country to launch a dedicated gilt scheme investing only in government securities.

A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

DATA ANALYSIS

A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

EQUITY LINKED SAVING SCHEME DIVIDEND OPTION

JANUARY 2011 APRIL 2011

CALCULATION OF AVERAGE RETURN Average Return = Total Return / Number of Months

Company Name Month January February March April Total Avg Return Average Return
RELIANCE (R) 0.804158 0.713947 0.798619 0.86495 3.181674 0.795419 KOTAK (R) 0.616715 0.496376 0.501922 0.443314 2.058327 0.514582 LIC (R) -0.01166 -0.07525 -0.02994 -0.00688 -0.12373 -0.03093 SBI (R) 1.911105 1.782526 1.9413 2.046632 7.681563 1.920391

A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

CALCULATION OF SHARPE INDEX RATIO

Sharpe Index Ratio = Rp Rf /

Particulars Average Return Standard Deviation Risk Free Rate Sharpe Index Ratio Rank

RELIANCE

KOTAK

LIC

SBI

0.795419

0.514582

-0.03093

1.920391

1.193128

0.771873

0.046399

2.880586

0.0748

0.0748

0.0748

0.0748

0.616379

0.588934

-2.17527

0.651913

A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

CALCULATION OF TREYNOR RATIO

Treynor ratio= Rp-Rf
If = 1= Indicates securities is having average Rate of Systematic Risk > 1= Securities Return fluctuate more than the Market Return. < 1= Securities Returns are less sensitive to the changes in the Market Returns.
Particulars Average Return Standard Deviation Risk Free Rate Sharpe Index Ratio Rank
RELIANCE 0.795419 1.193128 0.0748 0.616379 2 KOTAK 0.514582 0.771873 0.0748 0.588934 3 LIC -0.03093 0.046399 0.0748 -2.17527 4 SBI 1.920391 2.880586 0.0748 0.651913 1

A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

EQUITY LINKED SAVING SCHEME GROWTH OPTION

JANUARY 2011 APRIL 2011

CALCULATION OF AVERAGE RETURN Average Return = Total Return / Number of Months

Company Name Month January February March April Total Avg Return Average Return
RELIANCE (R) 2.409789 2.239 2.39919 2.5244 9.572379 2.393095 KOTAK (R) 2.593483 2.326003 2.464809 2.545314 9.929609 2.482402 LIC (R) 1.508264 1.346893 1.461882 1.520405 5.837444 1.459361 SBI (R) 2.859263 2.687947 2.89835 3.038158 11.48372 2.87093

A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

CALCULATION OF SHARPE INDEX RATIO

Sharpe Index Ratio = Rp Rf / Standard Deviation = (R Average Return) ^2
Particulars Average Return Standard Deviation Risk Free Rate Sharpe Index Ratio Rank
RELIANCE KOTAK LIC SBI

2.393095

2.482402

1.459361

2.87093

3.589642

3.723603

2.189042

4.306394

0.0748

0.0748

0.0748

0.0748

0.649952

0.650553

0.634689

0.656798

A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

CALCULATION OF TREYNOR RATIO

Treynor ratio= Rp-Rf
If = 1= Indicates securities is having average Rate of Systematic Risk > 1= Securities Return fluctuate more than the Market Return. < 1= Securities Returns are less sensitive to the changes in the Market Returns.
RELIANCXE 2.393095 0.0748 0.89 2.621455 2 KOTAK 2.482402 0.0748 0.93 2.604733 3 LIC 1.459361 0.0748 0.98 1.417715 4 SBI 2.87093 0.0748 0.97 2.915907 1

Particulars Rp Risk Free Rate Beta Treynor Ratio Rank

A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

BALANCED SCHEME DIVIDEND OPTION

JANUARY 2011 APRIL 2011 CALCULATION OF AVERAGE RETURN Average Return = Total Return / Number of Months

Company Name Month January February March April Total Avg Return Average Return

RELIANCE (R) 0.639053 0.583579 0.636524 0.6622 2.521356 0.630339

KOTAK (R) 0.635735 0.554723 0.569265 0.58095 2.340673 0.585168

LIC (R) 0.159723 0.088146 0.123576 0.143127 0.514572 0.128643

SBI (R) 1.574211 1.471 1.5613 1.640684 6.247195 1.561799

A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

CALCULATION OF SHARPE INDEX RATIO

Sharpe Index Ratio = Rp Rf /

Particulars Average Return Standard Deviation Risk Free Rate Sharpe Index Ratio Rank

RELIANCE

KOTAK

LIC

SBI

2.393095

2.482402

1.459361

2.87093

3.589642

3.723603

2.189042

4.306394

0.0748

0.0748

0.0748

0.0748

0.649952

0.650553

0.634689

0.656798

A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

CALCULATION OF TREYNOR RATIO

Treynor ratio= Rp-Rf
If = 1= Indicates securities is having average Rate of Systematic Risk > 1= Securities Return fluctuate more than the Market Return. < 1= Securities Returns are less sensitive to the changes in the Market Returns.
RELIANCXE
2.393095 0.0748 0.89 2.621455 2

Particulars
Rp Risk Free Rate Beta Treynor Ratio Rank

KOTAK
2.482402 0.0748 0.93 2.604733 3

LIC
1.459361 0.0748 0.98 1.417715 4

SBI
2.87093 0.0748 0.97 2.915907 1

A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

BALANCED SCHEME GROWTH OPTION

JANUARY 2011 APRIL 2011 CALCULATION OF AVERAGE RETURN Average Return = Total Return / Number of Months
Company Name Month January February March April Total Avg Return Average Return
RELIANCE (R) 1.343632 1.264263 1.339905 1.3768 5.3246 1.33115 KOTAK (R) 1.151691 1.045121 1.114453 1.216672 4.527937 1.131984 LIC (R) 4.486895 4.148242 4.315871 4.408368 17.35938 4.339844 SBI (R) 3.797474 3.604895 3.77335 3.921 15.09672 3.77418

A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

CALCULATION OF SHARPE INDEX RATIO

Sharpe Index Ratio = Rp Rf /

Particulars Average Return Standard Deviation Risk Free Return Sharpe Index Ratio Rank

RELIANCE

KOTAK

LIC

SBI

1.33115

1.131984

4.339844

3.77418

1.996725

1.697976

6.509766

5.66127

0.0748

0.0748

0.0748

0.0748

0.636617

0.63133

0.655914

0.65916

A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

CALCULATION OF TREYNOR RATIO

Treynor ratio= Rp-Rf
If = 1= Indicates securities is having average Rate of Systematic Risk > 1= Securities Return fluctuate more than the Market Return. < 1= Securities Returns are less sensitive to the changes in the Market Returns.
RELIANCECE
1.33115 0.0748 1.09 1.166193

Particulars
Rp Risk Free Rate Beta Treynor Ratio

KOTAK
1.131984 0.0748 0 0

LIC
4.339844 0.0748 0.86 4.964935

SBI
3.77418 0.0748 1.14 3.273404

Rank

A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

SUMMARY OF FINDINGS
FROM EQUITY LINKED SAVING SCHEME (DIVIDEND OPTION) Average Returns: SBI Equity Scheme performance is ranked as first with the highest average Return of 1.920391 Sharpe Ratio: SBI Equity Scheme performance is ranked as first with the highest Sharpe Index Ratio of 0.651913 and with the highest Standard Deviation of 2.880586 followed by RELIANCE, KOTAK and LIC. This shows that higher the risk higher the return. Treynor Ratio: SBI Equity Scheme performance is again ranked as first with the highest Treynor Ratio of 1.93597, followed by RELIANCE, KOTAK and LIC.

PUBLIC SECTOR VS PRIVATE SECTOR The public sector mutual fund companys performance is better than the private sector mutual fund companies in case of Average Returns and also in case of both Sharpe Ratio and Treynor Ratio.
A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

CONT
FROM EQUITY LINKED SAVING SCHEME (GROWTH OPTION) Average Returns: SBI Equity Scheme performance is ranked as first with the highest Average Return of 2.87093 Sharpe Ratio: SBI Equity Scheme performance is ranked as first with the highest Sharpe Index Ratio of 0.656798 and with the highest Standard Deviation of 4.306394, followed by KOTAK, RELIANCE and LIC. This shows that higher the risk higher the return. Treynor Ratio: SBI Equity Scheme performance is again ranked as first in case of Treynor ratio with the highest Treynor Ratio of 2.915907, followed by RELIANCE, KOTAK and LIC.

PUBLIC SECTOR VS. PRIVATE SECTOR The public sector mutual fund companies performance is better than the private sector mutual fund companies in case of Average Returns and also in case of both Sharpe Ratio and Treynor Ratio.
A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

CONT
FROM BALANCED SCHEME (DIVIDEND OPTION)

Average Returns: SBI Balanced Scheme performance is ranked as first with the highest Average Return of 1.561799
Sharpe Ratio: SBI Balanced Scheme performance is ranked as first with the highest Sharpe Index Ratio of 0.648525 and with the highest Standard Deviation of 2.342698, followed by RELIANCE, KOTAK and LIC. Treynor Ratio: SBI Balanced Scheme performance is ranked as first with the highest Treynor Ratio of 1.332718, followed by RELIANCE, KOTAK and JM. Higher the Treynor Ratio is an indicator of favorable performance.

PUBLIC SECTOR VS. PRIVATE SECTOR The public sector mutual fund companies performance is better than the private sector mutual fund companies in case of Average Returns and also in case of both Sharpe Ratio and Treynor Ratio.
A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

FROM BALANCED SCHEME (GROWTH OPTION) Average Returns: SBI Balanced Scheme performance is ranked as first with the highestAverage Return of 3.77418. Sharpe Ratio: SBI Balanced Scheme performance is ranked as first with the highest Sharpe Index Ratio of 0.65916, and with the highest Standard Deviation of 5.66127, followed by LIC, Prudential RELIANCE and KOTAK. This shows that higher the risk, higher the return. Treynor Ratio: LIC Balanced scheme performance is ranked as first with the highest Treynor Ratio of 4.964935, followed by SBI, RELIANCE and KOTAK.

PUBLIC SECTOR VS. PRIVATE SECTOR: The public sector mutual fund Companies outperforms the private sector mutual fund companies in case of Average Returns and also in case of both Sharpe Ratio and Treynor Ratio.

A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

SUGGESTIONS AND RECOMMENDATIONS

As the investment on financial assets is comparatively low in India when compared to the foreign investors, it is suggested that the Kotak Mahindra AMC Company, has to bring innovative new products keeping in view of the investors expectations as the recession and the doubled deep recession is expected all over the globe, with a view to encourage the new investors. The Company should come forward to introduce more schemes at the right time for the benefit of the fund house, investors, brokers, and the distributors. In general the private sector mutual fund companies outperforms the public sector mutual fund companies, if the Kotak Mahindra AMC Company understands their Competitors and the market they will have a hedge over their competitors in the future. A typical individual is not likely to have the knowledge, skills, inclination and time to keep track of and understand the causes and implication of the price changes and trends. So, the Asset management companys should come forward to educate individuals about the benefits of mutual funds.
IMS GHAZIABAD

A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

CONCLUSION
The public sector mutual fund companys performance is better than the private sector mutual fund companies in case of Equity Linked Savings Scheme. The public sector mutual fund Companies outperforms the private sector mutual fund companies of two ratios viz., Sharpe Ratio and Treynor Ratio in case Balanced Scheme. We can arrive at the conclusion that indeed existing funds have surpassed newer ones by a mile and we would be much better off sticking to existing funds with excellent track records than running after fancy terms, names & themes.

A DISSERTATION SUBMITTED AS A PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMNT IN FINANCE AT

IMS GHAZIABAD

THANK YOU