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SUMMER TRANING

PROJECT REPORT

ON

RISK RETURN ANALYSIS AND


COMPARATIVE STUDY OF RELIANCE
MUTUAL FUND

(A dissertation submitted to “RELIANCE CAPITAL ASSETS


MANAGEMENT COMPANY” In partial fulfillment of the
requirement of summer training for the award of degree of MBA)

Submitted by: Supervisor:


Ms.KAMAL SODHI

By- 1
BONAFIDE CERTIFICATE

This is to certify that the Report on Project Work titled “Risk Return Analysis and
Comparative Study of Reliance Mutual Fund” for Reliance Capital Asset Management
Company Ltd. is a bonafide record of the work done by

Studying in Master of Business Administration 4th semester in “K.R. Mangalam Institute of


Management”, New Delhi during the year 2009-11.

By- 2
ACKNOWLEDGEMENT

I would like to express my appreciation and gratitude to various people who have shared
their valuable time and made possible this project, through their direct or indirect
cooperation.

My first word of gratitude is for Mr.Abhishek Srivastava – Relationship


Manager(Corporate Sale), RELIANCE AMC, Delhi my corporate guide, for his kind
help and support and his valuable guidance throughout my project.

I am also thankful to Ms. Kamal Sodhi, my faculty guide of “K.R MANGALAM


INSTITUTE OF MANAGEMENT”, Greater kailash New Delhi, for her valuable
guidance. She has helped me learn about the process, conducting survey, analyzing and
presenting the facts and figures.

I am also thankful to my respected faculties, dear friend & colleagues, who have helped me
in every possible ways, supported me and encouraged me to explore new dimensions.

MBA 4TH SEMESTER

By- 3
DECLARATION

I here by declare that the project report entitled:

A Project Report on “Risk Return Analysis And Comparative Study Of Reliance


Mutual Fund” submitted in partial fulfillment of the requirement for the degree of Master of
Business Administration to RELIANCE CAPITAL ASSET MANAGEMENT COMPANY
is my original work and not submitted for the award of any other degree, diploma,
fellowship, or any other similar title or prizes.

Name:
Place: New Delhi

Date: _________

By- 4
TABLE OF CONTENT

S.No. Page No.


1 INTRODUCTION 27
2 COMPANY PROFILE 39
3 OBJECTIVES OF THE STUDY 33

4 COMPETITORS OF RELIANCE 58
MUTUAL FUND
5 RESEARCH METHODOLOGY 59
6 DATA ANALYSIS AND 62
INTERPRETATION
7 COMPARATIVE STUDY 85
8 OBSERVATION 94
9 FINDINGS AND SUGGESTIONS 95
10 CONCLUSION 97
11 LIMITATION 61
12 BIBLIOGRAPHY 98

By- 5
PREFACE
This is the age of technical up gradation. Nothing remains same for a long period every thing
change with a certain span of time. So it is must for every organization to put a birds eye
view on it’s over all functioning.
This report has been prepared during practical training of Master of business
administration (M.B.A.) from K.R Mangalam Institute of Management .The student of
M.B.A. essentially required a practical training of 4 to 6 weeks in any organization. It gives
an opportunity to the student to test their acquired knowledge through practical experiences.
The successful completion of this project was a unique experience for me because by visiting
many place and interacting various person, I achieved a better knowledge about sales. The
experience which I gained by doing this project was essential at this turning point of my
carrier this project is being submitted which content detailed analysis of the research under
taken by me.
The research provides an opportunity to the student to devote his/her skills knowledge and
competencies required during the technical session.

The research has been conducted on the topic “Risk Return Analysis And Comparative
Study Of Reliance Mutual Fund”.

PLACE-………..
DATE…………..

By- 6
EXECUTIVE SUMMARY

The performance evaluation of mutual fund is a vital matter of concern to the fund managers,
investors, and researchers alike. The core competence of the company is to meet objectives
and the needs of the investors and to provide optimum return for their risk. This study tries to
find out the risk and return allied with the mutual funds.
This project paper is segmented into three sections to explore the link between conventional
subjective and statistical approach of Mutual Fund analysis. To start with, the first section
deals with the introductory part of the paper by giving an overview of the Mutual fund
industry and company profile.
This section also talks about the theory of portfolio analysis and the different measures of
risk and return used for the comparison.
The second section details on the need, objective, and the limitations of the study. It also
discusses about the sources and the period for the data collection. It also deals with the data
interpretation and analysis part wherein all the key measures related to risk and return are
done with the interpretation of the results.
In the third section, an attempt is made to analyze and compare the performance of the equity
mutual fund. For this purpose β-value, standard deviation, and risk adjusted performance
measures such as Sharpe ratio, Treynor measure, Jenson Alpha, and Fema measure have been
used.
The portfolio analysis of the selected fund has been done by the measure return for the
holding period.
At the end, it illustrates the suggestions and findings based on the analysis done in the
previous sections and finally it deals with conclusion part.

By- 7
MUTUAL FUND OVERVIEW

Mutual fund is an investment company that pools money from small investors and
invests in a variety of securities, such as stocks, bonds and money market instruments. Most
open-end Mutual funds stand ready to buy back (redeem) its shares at their current net asset
value, which depends on the total market value of the fund's investment portfolio at the
time of redemption. Most open-end Mutual funds continuously offer new shares to
investors. It is also known as an open-end investment company, to differentiate it from a
closed-end investment company.
Mutual funds invest pooled cash of many investors to meet the fund's stated investment
objective. Mutual funds stand ready to sell and redeem their shares at any time at the fund’s
current net asset value: total fund assets divided by shares outstanding.
MUTUAL FUND SHEMES

INVEST INVEST IN

MARKET (FLUCTUATIONS)
THEIR VARIETY OF
STOCKS/BONDS
MONEY
INVESTOR

PROFIT/LOSS FORM PROFIT/LOSS FROM


PORTFOLIO OF INDIVIDUAL
INVESTMENT

In Simple Words, Mutual fund is a mechanism for pooling the resources by issuing units
to the investors and investing funds in securities in accordance with objectives as
disclosed in offer document.

By- 8
Investments in securities are spread across a wide cross-section of industries and
sectors and thus the risk is reduced. Diversification reduces the risk because not all stocks
may move in the same direction in the same proportion at the same time. Mutual fund issues
units t o the investors in accordance with quantum of money invested by them.
Investors of Mutual fund are known as unit holders. The profits or losses are shared by the
investors in proportion to their investments. The Mutual funds normally come out with a
number of schemes with different investment objectives which are launched from time to
time.
In India, A Mutual fund is required to be registered with Securities and Exchange Boa
rd of India (SEBI) which regulates securities markets before it can collect funds from the
public.

In Short , a Mutual fund is a common pool of money in to which investors with


common investment objective place their contributions that are to be invested in
accordance with the state d investment objective of the scheme. The investment manager
would invest the money collected from the investor in to assets that are defined/
permitted by the stated objective of the scheme. For example, a n equity fund would
invest equity and equity related instruments and a debt fund would invest in bonds,
debentures, gilts etc. Mutual fund is a suitable investment for the common ma n a s it offers
an Oporto unity to invest in a diversified, professionally managed basket of securities at
a relatively low cost.

By- 9
HISTORY OF MUTUAL FUNDS (WORLDWIDE)

When three Boston securities executives pooled their money together in 1924 to
create the first mutual fund, they had no idea how popular mutual funds would become.

The idea of pooling money together for investing purposes started in Europe in the
mid-1800s. The first pooled fund in the U.S. was created in 1893 for the faculty and staff of
Harvard University. On March 21st, 1924 the first official mutual fund was born. It was
called the Massachusetts Investors Trust.

After one year, the Massachusetts Investors Trust grew from $50,000 in assets in
1924 to $392,000 in assets (with around 200 shareholders). In contrast, there are over 10,000
mutual funds in the U.S. today totaling around $7 trillion (with approximately 83 million
individual investors) according to the Investment Company Institute.

The stock market crash of 1929 slowed the growth of mutual funds. In response to the
stock market crash, Congress passed the Securities Act of 1933 and the Securities Exchange
Act of 1934. These laws require that a fund be registered with the SEC and provide
prospective investors with a prospectus. The SEC (U.S. Securities and Exchange
Commission) helped create the Investment Company Act of 1940, which provides the
guidelines that all funds must comply with today.

With renewed confidence in the stock market, mutual funds began to blossom. By the
end of the 1960s there were around 270 funds with $48 billion in assets.
In 1976, John C. Bogle opened the first retail index fund called the First Index Investment
Trust. It is now called the Vanguard 500 Index fund. In November of 2000 it became the
largest mutual fund ever with $100 billion in assets.

By- 10
History of Indian Mutual Fund Industry

The history of Mutual Funds in India can be broadly divided into 4 Phases:

1. First phase (1964-1987)

1 � T he Unit Trust of India (UTI) was established in the year 1963 by passing an

2 Act in the Parliament.

3 �The UTI was setup by the Reserve Bank of India (RBI) and functioned under

4 the Regulatory and Administrative control of the RBI.

5 �The First scheme in the history of mutual funds was UNIT SCHEME-64,

6 which is popularly known as US-64.

7 �In 1978, UTI was de-linked from RBI. The Industrial Development Bank of

8 India (IDBI) took over the Regulatory and Administrative control.

9 �At the end of the year 1988, UTI had Rs.6,700/- Crores of Assets Under

10 Management.

2. Second phase (1987-1993)

1 �Entry of Public Sector Funds.

2 �In the year 1987, public sector Mutual Funds setup by public sector banks,

3 Life Insurance Corporation of India (LIC) and General Insurance

4 Corporation of India (GIC) are came in to existence.

5 �State Bank of India Mutual Fund was the first non-UTI Mutual Fund.

6 �The following are the non-UTI Mutual Funds at initial stages.

7 �SBI Mutual Fund in June 1987.

8 �Can Bank Mutual Fund in December 1987.

9 �LIC Mutual Fund in June 1989.

10 �Punjab National Bank Mutual Fund in August 1989.

By- 11
11 �Indian Bank Mutual Fund in November 1989.

12 �Bank of India Mutual Fund in June 1990.

1 �GIC Mutual Fund in December 1990.

2 �Bank of Baroda Mutual Fund in October 1992.

At the end of 1993, the entire Mutual Fund Industry had Assets under Management of

Rs.47, 004/- Crores.

3. Third phase (1993-2003)

1 �Entry of Private Sector Funds - a wide choice to Indian Mutual Fund

2 investors.

3 �In 1993, the first Mutual Fund Regulations came into existence, under which

4 all mutual funds except UTI were to be registered and governed.

5 �The Erstwhile Kothari Pioneer (now merged with Franklin Templeton) was

6 the first private sector Mutual Fund Registered in July 1993.

7 �In 1996, the 1993 Securities Exchange Board of India (SEBI) Mutual Funds

8 Regulations were substituted by a more comprehensive and revised Mutual

9 Fund Regulations.

10 �The number of Mutual Fund houses went on increasing, with many foreign

11 mutual funds setting up funds in India.

12 �In this time, the Mutual Fund industry has witnessed several Mergers

13 &Acquisitions.

14 �The UTI with Rs.44, 541/- Crores. Of Assets Under management was way

15 ahead of all other Mutual Funds.

By- 12
The following was the status at end of February 2003:

Number of schemes Amount (in Crores)


Open-ended schemes 32 82,693
1
Close-ended schemes 51 4497
TOTAL 37 87,190
2

(Source – AMFI website)

The diagram below shows the three segments and some players in each segment:

4. Fourth phase (since 2003 February)

1 �Following the repeal of the UTI Act in February 2003, it was (UTI)

2 bifurcated into 2 separate entities.

3 �O
 ne is the specified undertaking of the UTI with asset under management of

4 Rs.29, 835/- Crores as at the end of January 2003.

5 �The second is the UTI Mutual Funds Limited, sponsored by State Bank of

6 India, Punjab National Bank, Bank of Baroda and Life Insurance Corporation

7 of India.
8 �UTI is functioning under an Administrator and
under the Rules framed by

9 the Government of India and does not come


under the purview of the

10 Mutual Fund Regulations.

11 �The UTI Mutual Funds Limited is registered with


SEBI and functions under

12 the Mutual Funds Regulations.

13 �With the bifurcation of the Erstwhile UTI, with the


setting up of a UTI

14 Mutual Fund, confirming to the SEBI Mutual


Fund Regulations and with

15 recent mergers taking

16

place among different private sector funds, the Mutual Fund


Industry has entered its current phases of consolidation and
growth.

1 �At the end of September 2004, there were 29 funds,


which manage assets of

2 Rs.1, 53,108/- Crores under 421 different


schemes.

3 �At the end of March 2006, the status of Mutual


fund Industry was:

14
No. of schemes Amount (in crores)
Open-ended schemes 41 1,85,999
4
Close-ended schemes 46 71,500
TOTAL 46 2,57,499
0

(Source – AMFI website)

ADVANTAGES OF MUTUAL FUND


Table:1.1

S. Advanta
Particulars
No. ge

Mutual Funds invest in a well-diversified portfolio of


Portfolio
securities which enables investor to hold a diversified
1. Diversifi
investment portfolio (whether the amount of investment
cation
is big or small).

Professio Fund manager undergoes through various research


nal works and has better investment management skills
2.
Manage which ensure higher returns to the investor than what
ment he can manage on his own.

15
Investors acquire a diversified portfolio of securities
Less even with a small investment in a Mutual Fund. The
3.
Risk risk in a diversified portfolio is lesser than investing in
merely 2 or 3 securities.

Low
Due to the economies of scale (benefits of larger
Transact
4. volumes), mutual funds pay lesser transaction costs.
ion
These benefits are passed on to the investors.
Costs

An investor may not be able to sell some of the shares


Liquidit
5. held by him very easily and quickly, whereas units of a
y
mutual fund are far more liquid.

Mutual funds provide investors with various schemes


with different investment objectives. Investors have the
Choice
option of investing in a scheme having a correlation
6. of
between its investment objectives and their own
Schemes
financial goals. These schemes further have different
plans/options

Funds provide investors with updated information


Transpa pertaining to the markets and the schemes. All material
7.
rency facts are disclosed to investors as required by the
regulator.

Investors also benefit from the convenience and


flexibility offered by Mutual Funds. Investors can
Flexibilit switch their holdings from a debt scheme to an equity
8.
y scheme and vice-versa. Option of systematic (at regular
intervals) investment and withdrawal is also offered to
the investors in most open-end schemes.

Mutual Fund industry is part of a well-regulated


investment environment where the interests of the
9. Safety investors are protected by the regulator. All funds are
registered with SEBI and complete transparency is
forced.

16
DISADVANTAGE OF INVESTING
THROUGH MUTUAL FUNDS
Table:1.2
S. Disadv
Particulars
No. antage

Costs
Control
Not in Investor has to pay investment management fees and
the fund distribution costs as a percentage of the value of
1.
Hands his investments (as long as he holds the units),
of an irrespective of the performance of the fund.
Investo
r

No The portfolio of securities in which a fund invests is a


Custom decision taken by the fund manager. Investors have no
2. ized right to interfere in the decision making process of a
Portfoli fund manager, which some investors find as a
os constraint in achieving their financial objectives.

Difficul
ty in Many investors find it difficult to select one option
Selectin from the plethora of funds/schemes/plans available.
3. g a For this, they may have to take advice from financial
Suitabl planners in order to invest in the right fund to achieve
e Fund their objectives.
Scheme

17
SCHEMES OF MUTUAL FUND

BASED ON THEIR
STURCTURE

OPEN ENDED FUNDS CLOSE-ENDED FUNDS

18
2. BASED ON INVESTMENT

EQUITY FUNDS BALANCE DEBT FUNDS


D FUNDS

LEQUID
INDEX FUNDS DEBT
GUILT FUNDS
DEVIDEND EQUITY
INCOME
EQUITY
FMPS FUNDS
THEMANTIC
FLOATING
SECTOR FUND
ARBITAGE
ELSS

19
Mutual funds can be classified as follow:

Based on their structure:

 Open-ended Funds:
An open-end fund is one that is available for subscription all
through the year. These do not have a fixed maturity.
Investors can conveniently buy and sell units at Net Asset
Value ("NAV") related prices. The key feature of open-end
schemes is liquidity.

 Closed-ended Funds:
A closed-end fund has a stipulated maturity period which
generally ranging from 3 to 15 years. The fund is open for

20
subscription only during a specified period. Investors can
invest in the scheme at the time of the initial public issue and
thereafter they can buy or sell the units of the scheme on the
stock exchanges where they are listed.
In order to provide an exit route to the investors, some close-
ended funds give an option of selling back the units to the
Mutual Fund through periodic repurchase at NAV related
prices. SEBI Regulations stipulate that at least one of the two
exit routes is provided to the investor.

Based on their investment objective:

 Equity funds: These funds invest in equities and


equity related instruments. With fluctuating share
prices, such funds show volatile performance, even
losses. However, short term fluctuations in the
market, generally smoothens out in the long term,
thereby offering higher returns at relatively lower
volatility. At the same time, such funds can yield
great capital appreciation as, historically, equities
have outperformed all asset classes in the long term.
Hence, investment in equity funds should be
considered for a period of at least 3-5 years. It can be
further classified as:

21
1. Index funds- In this case a key stock market index, like
BSE Sensex or Nifty is tracked. Their portfolio mirrors the
benchmark index in terms of both composition and individual
stock weightages.
2. Equity diversified funds- 100% of the capital is invested
in equities spreading across different sectors and stocks.
3. Dividend yield funds- it is similar to the equity-diversified
funds except that they invest in companies offering high
dividend yields.
4. Thematic funds- Invest 100% of the assets in sectors
which are related through some theme.
e.g. -An infrastructure fund invests in power, construction,
cements sectors etc.
5. Sector funds- Invest 100% of the capital in a specific
sector. e.g. - A banking sector fund will invest in banking
stocks.
6. ELSS- Equity Linked Saving Scheme provides tax benefit
to the investors.

 Balanced fund: Their investment portfolio includes


both debt and equity. As a result, on the risk-return
ladder, they fall between equity and debt funds.
Balanced funds are the ideal mutual funds vehicle for
investors who prefer spreading their risk across
various instruments. Following are balanced funds
classes:
1 Debt-oriented funds -Investment below 65% in equities.

22
2 Equity-oriented funds -Invest at least 65% in equities,
remaining in debt.

 Debt fund: They invest only in debt instruments, and


are a good option for investors averse to idea of taking
risk associated with equities. Therefore, they invest
exclusively in fixed-income instruments like bonds,
debentures, Government of India securities; and
money market instruments such as certificates of
deposit (CD), commercial paper (CP) and call money.
Put your money into any of these debt funds
depending on your investment horizon and needs.

1. Liquid funds- These funds invest 100% in money


market instruments, a large portion being invested in
call money market.

2. Gilt funds ST- They invest 100% of their portfolio in


government securities of and T-bills.

3. Floating rate funds - Invest in short-term debt


papers. Floaters invest in debt instruments, which
have variable coupon rate.

4. Arbitrage fund- They generate income through


arbitrage opportunities due to miss-pricing between
cash market and derivatives market. Funds are
allocated to equities, derivatives and money markets.

23
Higher proportion (around 75%) is put in money
markets, in the absence of arbitrage opportunities.

5. Gilt funds LT- They invest 100% of their portfolio in


long-term government securities.

6. Income funds LT- Typically, such funds invest a


major portion of the portfolio in long-term debt
papers.

7. MIPs- Monthly Income Plans have an exposure of


70%-90% to debt and an exposure of 10%-30% to
equities.

8. FMPs- fixed monthly plans invest in debt papers


whose maturity is in line with that of the fund.

How are funds different in terms of their risk profile:


Table:1.3
Equity Funds High level of return, but has a high level of risk too
Debt funds Returns comparatively less risky than equity funds
Liquid and Money Provide stable but low level of return
Market funds

INVESTMENT STRATEGIES

1. Systematic Investment Plan: Under this, a fixed sum is


invested each month on a fixed date of a month. Payment is

24
made through post-dated cheques or direct debit facilities.
The investor gets fewer units when the NAV is high and
more units when the NAV is low. This is called as the benefit
of Rupee Cost Averaging (RCA)
2. Systematic Transfer Plan: Under this, an investor invest
in debt-oriented fund and give instructions to transfer a fixed
sum, at a fixed interval, to an equity scheme of the same
mutual fund.
3. Systematic Withdrawal Plan: if someone wishes to
withdraw from a mutual fund then he can withdraw a fixed
amount each month.

1.6. ORGANISATION OF MUTUAL FUND:

25
Figure:1.4

THE STRUCTURE CONSISTS OF:


SPONSOR
Sponsor is the person who acting alone or in combination
with another body corporate establishes a mutual fund.
Sponsor must contribute at least 40% of the net worth of the
Investment managed and meet the eligibility criteria
prescribed under the Securities and Exchange Board of India
(Mutual Fund) Regulations, 1996. The sponsor is not
responsible or liable for any loss or shortfall resulting from
the operation of the Schemes beyond the initial contribution
made by it towards setting up of the Mutual Fund.
TRUST
The Mutual Fund is constituted as a trust in accordance with
the provisions of the Indian Trusts Act, 1882 by the Sponsor.
The trust deed is registered under the Indian Registration Act,
1908.

TRUSTEE
Trustee is usually a company (corporate body) or a Board of
Trustees (body of individuals). The main responsibility of the

26
Trustee is to safeguard the interest of the unit holders and
ensure that the AMC functions in the interest of investors and
in accordance with the Securities and Exchange Board of
India (Mutual Funds) Regulations, 1996, the provisions of the
Trust Deed and the Offer Documents of the respective
Schemes. At least 2/3rd directors of the Trustee are
independent directors who are not associated with the
Sponsor in any manner.
ASSET MANAGEMENT COMPANY (AMC)
The AMC is appointed by the Trustee as the Investment
Manager of the Mutual Fund. The AMC is required to be
approved by the Securities and Exchange Board of India
(SEBI) to act as an asset management company of the Mutual
Fund. At least 50% of the directors of the AMC are
independent directors who are not associated with the
Sponsor in any manner. The AMC must have a net worth of
at least 10 cores at all times.
REGISTRAR AND TRANSFER AGENT
The AMC if so authorized by the Trust Deed appoints the
Registrar and Transfer Agent to the Mutual Fund. The
Registrar processes the application form, redemption requests
and dispatches account statements to the unit holders. The
Registrar and Transfer agent also handles communications
with investors and updates investor records.

27
ASSET UNDER MANAGEMENT:
Table1.4
ASSET UNDER MANAGEMENT OF TOP AMC,S as on Jun 30,
2009
Mutual Fund Name No. of Corpus (Rs.Crores)
schemes
Reliance Mutual Fund 263 108,332.36
HDFC Mutual Fund 202 78,197.90
ICICI Prudential Mutual Fund 325 70,169.46
UTI Mutual Fund 207 67,978.19
Birla Sun Life Mutual Fund 283 56,282.87
SBI Mutual Fund 130 34,061.04
LIC Mutual Fund 70 32,414.92
Kotak Mahindra Mutual Fund 124 30,833.02
Franklin Templeton Mutual Fund 191 25,472.85
IDFC Mutual Fund 164 21,676.29
Tata Mutual Fund 175 21,222.81

The graph indicates the growth of assets over the years.

28
Figure:1.5

DISTRIBUTION CHANNELS:

29
Mutual funds posses a very strong distribution channel so that
the ultimate customers doesn’t face any difficulty in the final
procurement. The various parties involved in distribution of
mutual funds are:

1. Direct marketing by the AMCs: the forms could be


obtained from the AMCs directly. The investors can approach
to the AMCs for the forms. some of the top AMCs of India
are; Reliance ,Birla Sunlife, Tata, SBI magnum, Kotak
Mahindra, HDFC, Sundaram, ICICI, Mirae Assets, Canara
Robeco, Lotus India, LIC, UTI etc. whereas foreign AMCs
include: Standard Chartered, Franklin Templeton, Fidelity, JP
Morgan, HSBC, DSP Merill Lynch, etc.
2. Broker/ sub broker arrangements: the AMCs can
simultaneously go for broker/sub-broker to popularize their
funds. AMCs can enjoy the advantage of large network of
these brokers and sub brokers.
3. Individual agents, Banks, NBFC: investors can procure
the funds through individual agents, independent brokers,
banks and several non- banking financial corporations too,
whichever he finds convenient for him.

30
INTRODUCTION

The stocks have risk, which comprises of either unique risk


also called as diversifiable risk or unsystematic risk and
market risk also called as non-diversifiable risk
Or systematic. There are few problems, which reveal the
necessity to analyze the risk and return of the MF’s. we can
neither predict the risk involved nor the future performance
of the stock. Many MF’s schemes have not performed well
due to which investor have incurred losses. The movement of
BSE-100 index depends on the performance of the
company’s stock. If a particular industry is not in a booming

31
stage, then the stock of companies related to that industry
would be affected. Given the background of risk and
uncertainty about investment in mutual fund, present study
tries to find out risk return on Reliance mutual fund in
comparison with BSE-100 index has been under taken.
There are a lot of investment avenues available today in the
financial market for an investor with an invest able surplus.
He can invest in Bank Deposits, Corporate Debentures, and
Bonds where there is low risk but low return. He may invest
in Stock of companies where the risk is high and the returns
are also proportionately high. The recent trends in the Stock
Market have shown that an average retail investor always lost
with periodic bearish tends. People began opting for portfolio
managers with expertise in stock markets who would invest
on their behalf. Thus we had wealth management services
provided by many institutions. However they proved too
costly for a small investor. These investors have found a good
shelter with the mutual funds.
Like most developed and developing countries the mutual
fund cult has been catching on in India. The reasons for this
interesting occurrence are:

1. Mutual funds make it easy and less costly for investors


to satisfy their need for capital growth, income and/or income
preservation.

32
2. Mutual fund brings the benefits of diversification and
money management to the individual investor, providing a
opportunity for financial success that was once available only
to a select few.

HISTORY

� Unit Trust of India is the first Mutual Fund set up under a


separate act, UTI Act in 1963, and started its operations in
1964 with the issue of units under the scheme US-641. In
1978 UTI was delinked from the RBI and Industrial
Development Bank of India (IDBI) took over the
Regulatory and administrative control in place of RBI.

� In the year 1987 Public Sector banks like State Bank of


India, Punjab National Bank, Indian Bank, Bank of India, and
Bank of Baroda have set up mutual funds.

� Apart from these above mentioned banks Life Insurance


Corporation [LIC] and General Insurance Corporation [GIC]
too have set up mutual fund. LIC established its mutual fund
in June 1989.while GIC had set up its mutual fund in
December 1990.The mutual fund industry had assest under
management of Rs. 47,004 crores.

33
� With the entry of Private Sector Funds a new era has
started in Mutual Fund Industry [e.g:- Principal Mutual
Fund.]

Mutual Fund Regulations

The second is the UTI Mutual Fund Ltd, sponsored by SBI,


PNB, BOB and LIC. It is registered with SEBI and functions
under the Mutual Fund Regulations. With the bifurcation of
the erstwhile UTI which had in March 2000 more than
Rs.76,000 crores of assets under management and with the
setting up of a UTI Mutual Fund, conforming to the SEBI
Mutual Fund Regulations, and with recent mergers taking
place among different private sector funds, the mutual fund

34
industry has entered its current phase of consolidation and
growth. As at the end of September, 2004, there were 29
funds, which manage assets of Rs.153108 crores under 421
schemes.

Types of Mutual Funds Scheme in India

35
Wide variety of Mutual Fund Schemes exist to cater to the
needs such as financial position, risk tolerance and return
expectations etc. The table below gives an overview into the
existing types of schemes in the Industry.

• By Structure
o Open - Ended Schemes
o Close - Ended Schemes
o Interval Schemes

• By Investment Objective
o Growth Schemes
o Income Schemes
o Balanced Schemes
o Money Market Schemes

• Other Schemes
o Tax Saving Schemes
o Special Schemes
 Index Schemes
 Sector Specfic

36
Features related mutual funds

• Reliance was the first fund house to launch sector


funds with flexibility to invest in a range of 0% to
100% in either equity or debt instruments.

• Mutual fund investments linked to an ATM/debit


card a Reliance innovation India’s first long-
short fund comes from Reliance Mutual Fund .

• As at 31st May 2008, more than 6.6 million


people had invested in Reliance Mutual Fund;the
investments comprised 16% of the country’s
entire mutual fund.

37
Mutual Fund Companies in India

The concept of mutual funds in India dates back to the year


1963. The era between 1963 and 1987 marked the existence
of only one mutual fund company in India with Rs. 67bn
assets under management (AUM), by the end of its monopoly
era, the Unit Trust of India (UTI). By the end of the 80s
decade, few other mutual fund companies in India took their
position in mutual fund market. The new entries of mutual
fund companies in India were SBI Mutual Fund, Canra bank
Mutual Fund, Punjab National Bank Mutual Fund, Indian
Bank Mutual Fund, Bank of India Mutual Fund. The
succeeding decade showed a new horizon in Indian mutual
fund industry. By the end of 1993, the total AUM of the
industry was Rs. 470.04 bn. The private sector funds started
penetrating the fund families. In the same year the first

38
Mutual Fund Regulations came into existence with re-
registering all mutual funds except UTI. The regulations were
further given a revised shape in 1996.

COMPITITORS OF RELIANCE MUTUAL


FUND

ABN AMRO Mutual Fund

39
ABN AMRO Mutual Fund was setup on April 15, 2004 with
ABN AMRO Trustee (India) Pvt. Ltd. As the Trustee
Company. The AMC, ABN AMRO Asset Management
(India) Ltd. was incorporated on November 4, 2003.
Deutsche Bank A G is the custodian of ABN AMRO Mutual
Fund.

Birla Sun Life Mutual Fund

Birla Sun Life Mutual Fund is the joint venture of Aditya


Birla Group and Sun Life Financial. Sun Life Financial is a
global organization evolved in 1871 and is being represented
in Canada, the US, the Philippines, Japan, Indonesia and
Bermuda apart from India. Birla Sun Life Mutual Fund
follows a conservative long-term approach to investment.
Recently it crossed AUM of Rs. 10,000 crores.

Bank of Baroda Mutual Fund (BOB Mutual Fund)

Bank of Baroda Mutual Fund or BOB Mutual Fund was setup


on October 30, 1992 under the sponsorship of Bank of
Baroda. BOB Asset Management Company Limited is the
AMC of BOB Mutual Fund and was incorporated on
November 5, 1992. Deutsche Bank AG is the custodian.

HDFC Mutual Fund

40
HDFC Mutual Fund was setup on June 30, 2000 with two
sponsorers namely Housing Development Finance
Corporation Limited and Standard Life Investments Limited.
HSBC Mutual Fund HSBC Mutual Fund was setup on May
27, 2002 with HSBC Securities and Capital Markets (India)
Private Limited as the sponsor. Board of Trustees, HSBC
Mutual Fund acts as the Trustee Company of HSBC Mutual
Fund.

ING Vysya Mutual Fund

ING Vysya Mutual Fund was setup on February 11, 1999


with the same named Trustee Company. It is a joint venture
of Vysya and ING. The AMC, ING Investment Management
(India) Pvt. Ltd. Was incorporated on April 6, 1998.

Prudential ICICI Mutual Fund

The mutual fund of ICICI is a joint venture with Prudential


Plc. of America, one of the largest life insurance companies
in the US of A. Prudential ICICI Mutual Fund was setup on
13th of October,1993 with two sponsorers, Prudential Plc.
and ICICI Ltd. The Trustee Company formed is Prudential
ICICI Trust Ltd. and the AMC is Prudential ICICI Asset

41
Management Company Limited Incorporated on 22nd of
June, 1993.

Sahara Mutual Fund

Sahara Mutual Fund was set up on July 18, 1996 with Sahara
India Financial Corporation Ltd. As the sponsor. Sahara
Asset Management Company Private Limited incorporated
on August 31, 1995 works as the AMC of Sahara Mutual
Fund. The paid-up capital of the AMC stands at Rs 25.8
crore.

State Bank of India Mutual Fund

State Bank of India Mutual Fund is the first Bank sponsored


Mutual Fund to launch offshor fund, the India Magnum Fund
with a corpus of Rs. 225 cr. approximately. Today it is the
largest Bank sponsored Mutual Fund in India. They have
already launched 35 Schemes out of which 15 have already
yielded handsome returns to investors. State Bank of India
Mutual Fund has more than Rs. 5,500 Crores as AUM. Now
it has an investor base of over 8 Lakhs spread over 18
schemes.

42
Tata Mutual Fund

Tata Mutual Fund (TMF) is a Trust under the Indian Trust


Act, 1882. The sponsorers for Tata Mutual Fund are Tata
Sons Ltd., and Tata Investment Corporation Ltd. The
investment manager is Tata Asset Management Limited and
its Tata Trustee Company Pvt. Limited. Tata Asset
Management Limited's is one of the fastest in the country
with more than Rs. 7,703 crores (as on April 30, 2005) of
AUM.

Kotak Mahindra Mutual Fund

Kotak Mahindra Asset Management Company (KMAMC) is


a subsidiary of KMBL. It is presently having more than 1,
99,818 investors in its various schemes. KMAMC started its
operations in December 1998. Kotak Mahindra Mutual Fund
offers schemes catering to investors with varying risk - return
profiles. It was the first company to launch dedicated gilt
scheme investing only in government securities.

Unit Trust of India Mutual Fund


UTI Asset Management Company Private Limited,
established in Jan 14, 2003, manages the UTI Mutual Fund

43
with the support of UTI Trustee Company Private Limited.
UTI Asset Management.

Standard Chartered Mutual Fund

Standard Chartered Mutual Fund was set up on March 13,


2000 sponsored by Standard Chartered Bank. The Trustee is
Standard Chartered Trustee Company Pvt. Ltd. Standard
Chartered Asset Management Company Pvt. Ltd. is the AMC
which was incorporated with SEBI on December 20,1999.

Franklin Templeton India Mutual Fund

The group, Franklin Templeton Investments is a California


(USA) based company with a global AUM of US$ 409.2 bn.
(as of April 30, 2005). It is one of the largest financial
services groups in the world. Investors can buy or sell the
Mutual Fund through their financial advisor or through mail
or through their website. They have Open end Diversified
Equity schemes, Open end Sector Equity schemes, Open end
Hybrid schemes, Open end Tax Saving schemes, Open end
Income and Liquid schemes, Closed end Income schemes and
Open end Fund of Funds schemes to offer.

Morgan Stanley Mutual Fund India

44
Morgan Stanley is a worldwide financial services company
and it’s leading in the market in securities, investment
management and credit services. Morgan Stanley Investment
Management (MISM) was established in the year 1975. It
provides customized asset management services and products
to governments, corporations, pension funds and non-profit
organizations. Its services are also extended to high net worth
individuals and retail investors. In India it is known as
Morgan Stanley Investment Management Private Limited
(MSIM India) and its AMC is Morgan Stanley Mutual Fund
(MSMF). This is the first close end diversified equity scheme
serving the needs of Indian retail investors focusing on a
long-term capital appreciation.

Escorts Mutual Fund

Escorts Mutual Fund was setup on April 15, 1996 with


Escorts Finance Limited as its sponsor. The Trustee
Company is Escorts Investment Trust Limited. It’s AMC was
incorporated on December 1, 1995 with the name Escorts
Asset Management Limited.

Alliance Capital Mutual Fund

45
Alliance Capital Mutual Fund was setup on December 30,
1994 with Alliance Capital Management Corp. of Delaware
(USA) as sponsored. The Trustee is ACAM Trust Company
Pvt. Ltd. and AMC, the Alliance Capital Asset Management
India (Pvt) Ltd. with the corporate office in Mumbai.
Benchmark Mutual Fund
Benchmark Mutual Fund was setup on June 12, 2001 with
Niche Financial Services Pvt. Ltd. as the sponsored and
Benchmark Trustee Company Pvt. Ltd. as the Trustee
Company. Incorporated on October 16, 2000 and
headquartered in Mumbai, Benchmark Asset Management
Company Pvt. Ltd. is the AMC.

Canbank Mutual Fund

Canbank Mutual Fund was setup on December 19, 1987 with


Canara Bank acting as the sponsor. Canbank Investment
Management Services Ltd. incorporated on March 2, 1993 is
the AMC. The Corporate Office of the AMC is in Mumbai.

Chola Mutual Fund

Chola Mutual Fund under the sponsorship of Cholamandalam


Investment & Finance Company Ltd. was setup on January 3,
1997. Cholamandalam Trustee Co. Ltd. is the Trustee
Company and AMC is Cholamandalam AMC Limited.

46
LIC Mutual Fund

Life Insurance Corporation of India set up LIC Mutual Fund


on 19th June 1989. It contributed Rs. 2 Crores towards the
corpus of the Fund. LIC Mutual Fund was constituted as a
Trust in accordance with the provisions of the Indian Trust
Act, 1882. . The Company started its business on 29th April
1994. The Trustees of LIC Mutual Fund have appointed
Jeevan Bima Sahayog Asset Management Company Ltd as
the Investment Managers for LIC Mutual Fund.

GIC Mutual Fund

GIC Mutual Fund, sponsored by General Insurance


Corporation of India (GIC), a Government of India
undertaking and the four Public Sector General Insurance
Companies , viz. National Insurance Co. Ltd (NIC), The
New India Assurance Co. Ltd. (NIA), The Oriental
Insurance Co. Ltd (OIC) and United India Insurance Co.
Ltd. (UII) and is constituted as a Trust in accordance with
the provisions of the Indian Trusts Act, 1882. Future of
Mutual Funds in India By December 2004, Indian mutual
fund industry reached Rs 1, 50,537 crore. It is estimated that

47
by 2010 March-end, the total assets of all scheduled
commercial banks should be Rs 40, 90,000 crore. The annual
composite rate of growth is expected 13.4% during the rest of
the decade. In the last 5
years we have seen annual growth rate of 9%. According to
the current growth rate, by year 2010, mutual fund assets will
be double.

COMPANY PROFILE OF RELIANCE

48
About Reliance Capital Asset Management Ltd.

Reliance Capital Asset Management Limited ( RCAM),


a company registered under the Companies Act, 1956 was
appointed to act as the Investment Manager of Reliance
Mutual fund. .

Reliance Capital Asset Management Limited (RCAM)


was approved as the Asset Management Company for the
Mutual Fund by SEBI vide their letter no IIMARP/1264/95

49
dated June 30, 1995. The Mutual Fund has entered into an
Investment Management Agreement (IMA) with RCAM
dated May 12, 1995 and was amended on August 12, 1997 in
line with SEBI (Mutual Funds) Regulations, 1996. Pursuant
to this IMA, RCAM is authorized to act as Investment
Manager of Reliance Mutual Fund. The net worth of the
Asset Management Company including preference shares as
on September 30, 2007 is Rs.152.02 crores. Reliance Mutual
Fund has launched thirty-five Schemes till date, namely:

"Reliance Mutual Fund schemes are managed by


Reliance Capital Asset Management Limited. A subsidiary of
Reliance Capital Limited, which holds 93.37% of the paid-up
capital of RCAM, the balance paid up capital being held by
minority shareholders."

Reliance Capital Asset Management Limited (RCAM)


was approved as the Asset Management Company for the
Mutual Fund by SEBI vide their letter no IIMARP/1264/95
dated June 30, 1995. The Mutual Fund has entered into an
Investment Management Agreement (IMA) with RCAM
dated May 12, 1995 and was amended on August 12, 1997 in
line with SEBI (Mutual Funds) Regulations, 1996. Pursuant
to this IMA, RCAM is authorized to act as Investment
Manager of Reliance Mutual Fund. The networth of the Asset
Management Company as on March 31, 2008 is Rs 709.39

50
crores. Reliance Mutual Fund has launched Forty Three
Schemes till date, namely:

This group dominates this key area in the financial sector.


This mega business houses show that it has assets under
management of Rs. 90,938 crore(US$ 22.73 billion) and an
investor base of over6.6 million
(Source:www.amfiindia.com).Reliance’s mutual fund
schemes are managed by Reliance Capital Asset Management
Limited(RCAM), a subsidiary of Reliance Capital Limited,
which holds 93.37% of the paid-up capital of RCAM.
The company notched up a healthy growth
of Rs. 16,354 crore(US$ 4.09 billion)in assets under
management in February2008 and helped propel the total
industry-wide AUM to Rs. 565,459 crore (US$ 141.36
billion)(Source: indiainvestments.com). A sharp rise infixed
maturity plans (FMPs) and collection ofRs. 7000 crore (US$
1.75 billion) through newfound offers (NFOs) created this
surge. In AU rankings, Reliance continues to be in the
number one spot.

RELIANCE MUTUAL FUND

51
Reliance mutual fund, promoted by the Anil Dhirubhai
Ambani (ADAG) group, is one of the fastest growing mutual
funds in India having doubled its assets over the last one year.
In March, 2006, the Reliance mutual fund emerged as the
largest private sector fund house in the country, overtaking
Prudential ICICI which has been holding that position for
many years.

The sponsor of the fund is Reliance Capital Limited, the


financial services arm of ADAG. Reliance Capital Asset
Management Limited, a wholly owned subsidiary of Reliance
Capital Limited, acts as the AMC to the fund. Directors of the
company include Amitabh Jhunjhunwala, a senior executive
of ADAG. Amitabh Chaturvedi is the managing director of
the AMC.

As of end August 2006, Reliance mutual fund has Rs 28,753


crore of assets under management. Reliance Equity Fund,
launched by Reliance MF in early 2006, is the largest mutual
find scheme in the country with a fund size of over Rs 5,500
crore.

Here is a list of mutual funds of Reliance which includes


Debt/Income Funds , Equity Funds and Sector Specific
Funds.

52
India's Best Offering: Reliance Mutual Fund

Investing has become global. Today, a lot of countries


are waking up to the reality that in order to gain financial
growth, they must encourage their citizens to not only save
but also invest. Mutual funds are fast becoming the mode of
investment in the world.

In India, a mutual fund company called the Reliance Mutual


Fund is making waves. Reliance is considered India's best
when it comes to mutual funds. Its investors number to 4.6
billion people. Reliance Capital Asset Management Limited
ranks in the top 3 of India's banking companies and financial
sector in terms of net value.

The Anil Dhirubhai Ambani Group owns Reliance; they are


the fastest growing investment company in India so far. To
meet the erratic demand of the financial market, Reliance

53
Mutual Fund designed a distinct portfolio that is sure to
please potential investors. Reliance Capital Asset
Management Limited manages RMF.

Vision And
Mission

Reliance Mutual Fund is so popular because it is investor


focused. They show their dedication by continually dishing
out innovative offerings and unparalleled service initiatives.
It is their goal to become respected globally for helping
people achieve their financial dreams through excellent
organization governance and customer care. Reliance Mutual
fund wants a high performance environment that is geared at
making investors happy.

RMF aims to do business lawfully and without stepping on


other people. They want to be able to create portfolios that
will ensure the liquidity of the investment of people in India
as well as abroad. Reliance Mutual Fund also wants to make
sure that their shareholders realize reasonable profit, by
deploying funds wisely. Taking appropriate risks to reach the
company's potential is also one of Reliance Mutual Fund's
objectives.

54
VISION STATEMENT

To be a globally respected wealth creator with an


emphasis on customer care and a culture of good corporate
governance

MISSION STATEMENT

To create and nurture a world-class, high performance


environment aimed at delighting our customers.

55
Types of Reliance Mutual Funds

1. Reliance Growth Fund


2. Reliance Vision Fund
3. Reliance Banking Fund
4. Reliance Di versified Power Sector Fund
5. Reliance Pharma Fund
6. Reliance Media & Entertainment Fund
7. Reliance NRI Equity Fund
8. Reliance Equity opportunities Fund
9. Reliance Index Fund
10.Reliance Tax Saver (ELSS) Fund
11.Reliance Equity Fund
12.Reliance Long Term Equity Fund
13.Reliance Regular Saving Fund

There are two types of investment in Mutual Funds.

1) Lump Sum
2) Systematic Investment Plan(SIP)

56
Lump Sum : In Lump sum the investment is only one times
that
is of Rs. 5,000. and if the investment is monthly then the
investment will be 6,000/-.

Systematic Investment Plan(SIP): We have already


mentioned about SIPs in brief in the previous pages but
now going into details, we will see how the power of
compounding could benefit us. In such case, every small
amountsinvested regularly can grow substantially.

SIP gives a clear picture of how an early and regular


investment can help the investor in wealth creation. Due to its
unlimited advantages SIP could be Redefined as “a
methodology of fund investing regularly to benefit regularly
from the stock market volatility. In the later sections we
will see how returns generated from some of the SIPs
have outperformed their benchmark. But before moving on
to that lets have a look at some of the top performing SIPs
and their return for 1 year:
Scheme Amount NAV NAV Date Total Amount
Reliance diversified power sector retail 1000 62.74
30/5/2008 14524.07
Reliance regular savings equity 1000 22.208 30/5/2008
13584.944

57
principal global opportunities fund 1000 18.86 30/5/2008
14247.728
DWS investment opportunities fund 1000 35.31 30/5/2008
13791.157
BOB growth fund 1000 42.14 30/5/2008 13769.152
In the above chart we can see how if we start investing Rs
1000 per month then what return we’ll get for the total
investment of Rs. 12000. There is reliance diversified power
sector retail giving the maximum returns of Rs. 2524.07 per
year which comes to 21% roughly. Next we can see if
anybody would have undertaken the SIP in Principal
would have got returns of app. 18%. We can see
reliance regular savings equity, DWS investment
opportunities and BOB growth fund giving returns of
13.20%, 14.92%, and 14.74% respectively which is
greater than any other monthly
investment options. Thus we can easily make out how SIP is
beneficial for us. Its hassle free, it forces the investors to
save and get them into the habit of saving. Also paying a
small amount of Rs. 1000 is easy and convenient for them,
thus putting no pressure on their pockets. Now we will
analyze some of the equity fund SIP s of Birla Sunlife
with BSE 200 and bank fixed deposits In a tabular format
as well as graphical.

58
RELIANCE MUTUAL FUND SCHEMES

Equity/Growth Schemes
The aim of growth funds is to provide capital
appreciation over the medium to long- term. Such schemes
normally invest a major part of their corpus in equities. Such
funds have comparatively high risks. These schemes provide
different options to the investors like dividend option, capital
appreciation, etc. and the investors may choose an option
depending on their preferences. The investors must indicate
the option in the application form. The mutual funds also
allow the investors to change the options at a later date.
Growth schemes are good for investors having a long-term
outlook seeking appreciation over a period of time.

Debt/IncomeSchemes
The aim of income funds is to provide
regular and steady income to investors. Such schemes
generally invest in fixed income securities such as bonds,
corporate debentures, Government securities and money
market instruments. Such funds are less risky compared to

59
equity schemes. These funds are not affected because of
fluctuations in equity markets. However, opportunities of
capital appreciation are also limited in such funds. The NAVs
of such funds are affected because of change in interest rates
in the country. If the interest rates fall, NAVs of such funds
are likely to increase in the short run and vice versa.
However, long term investors may not bother about these
fluctuations.

Sector Specific Schemes


These are the funds/schemes which invest in the
securities of only those sectors or industries as specified in
the offer documents. e.g. Pharmaceuticals, Software, Fast
Moving Consumer Goods (FMCG), Petroleum stocks, etc.
The returns in these funds are dependent on the performance
of the respective sectors/industries. While these funds may
give higher returns, they are more risky compared to
diversified funds. Investors need to keep a watch on the
performance of those sectors/industries and must exit at an
appropriate time. They may also seek advice of an expert.

EQUITY/GROWTH SCHEMES
Reliance Natural Resources Fund :
(An Open Ended Equity Scheme) The primary
investment objective of the scheme is to seek to generate
capital appreciation & provide long-term growth

60
opportunities by investing in companies principally engaged
in the discovery, development, production, or distribution of
natural resources and the secondary objective is to generate
consistent returns by investing in debt and money market
securities.

Reliance Equity Fund :


(An open-ended diversified Equity Scheme.) The
primary investment objective of the scheme is to seek to
generate capital appreciation & provide long-term growth
opportunities by investing in a portfolio constituted of equity
& equity related securities of top 100 companies by market
capitalization & of companies which are available in the
derivatives segment from time to time and the secondary
objective is to generate consistent returns by investing in debt
and money market securities.

Reliance Tax Saver (ELSS) Fund :


(An Open-ended Equity Linked Savings Scheme.) The
primary objective of the scheme is to generate long-term
capital appreciation from a portfolio that is invested
predominantly in equity and equity related instruments.

Reliance Equity Opportunities Fund :


(An Open-Ended Diversified Equity Scheme.) The
primary investment objective of the scheme is to seek to
generate capital appreciation & provide long-term growth

61
opportunities by investing in a portfolio constituted of equity
securities & equity related securities and the secondary
objective is to generate consistent returns by investing in debt
and money market securities.
Reliance Vision Fund :
(An Open-ended Equity Growth Scheme.) The primary
investment objective of the Scheme is to achieve long term
growth of capital by investment in equity and equity related
securities through a research based investment approach.

Reliance Growth Fund :


(An Open-ended Equity Growth Scheme.) The
primary investment objective of the Scheme is to achieve
long term growth of capital by investment in equity and
equity related securities through a research based investment
approach.

Reliance Quant Plus Fund (Formerly known as Reliance


Index Fund) :
(An Open Ended Equity Scheme.) The investment
objective of the Scheme is to generate capital appreciation
through investment in equity and equity related instruments.
The Scheme will seek to generate capital appreciation by
investing in an active portfolio of stocks selected from S & P
CNX Nifty on the basis of a mathematical model.

Reliance NRI Equity Fund :

62
(An open-ended Diversified Equity Scheme.) The
Primary investment objective of the scheme is to generate
optimal returns by investing in equity or equity related
instruments primarily drawn from the Companies in the BSE
200 Index.

Reliance Regular Savings Fund

(An Open-ended Scheme.) Equity Option: The primary


investment objective of this option is to seek capital
appreciation and/or to generate consistent returns by actively
investing in Equity &Equity-related Securities.

Balanced Option: The primary investment objective


of this option is to generate consistent returns and
appreciation of capital by investing in mix of securities
comprising of equity, equity related instruments & fixed
income instruments.

Reliance Long Term Equity Fund:


(An close-ended Diversified Equity Scheme.) The
primary investment objective of the scheme is to seek to
generate long term capital appreciation & provide long-term
growth opportunities by investing in a portfolio constituted of
equity & equity related securities and Derivatives and the

63
secondary objective is to generate consistent returns by
investing in debt and money market securities.

Reliance Equity Advantage Fund:


(An open-ended Diversified Equity Scheme.) The
primary investment objective of the scheme is to seek to
generate capital appreciation & provide long-term growth
opportunities by investing in a portfolio predominantly of
equity & equity related instruments with investments
generally in S & P CNX Nifty stocks and the secondary
objective is to generate consistent returns by investing in debt
and money market securities.

DEBT/LIQUID SCHEMES

Reliance Monthly Income Plan :


(An Open Ended Fund. Monthly Income is not assured
& is subject to the availability of distributable surplus ) The
Primary investment objective of the Scheme is to generate
regular income in order to make regular dividend payments to
unitholders and the secondary objective is growth of capital.

Reliance Gilt Securities Fund - Short Term Gilt Plan &


Long Term Gilt Plan :
Open-ended Government Securities Scheme) The
primary objective of the Scheme is to generate Optimal credit
risk-free returns by investing in a portfolio of securities

64
issued and guaranteed by the central Government and State
Government

Reliance Income Fund :


(An Open-ended Income Scheme) The primary objective
of the scheme is to generate optimal returns consistent with
moderate levels of risk. This income may be complemented
by capital appreciation of the portfolio. Accordingly,
investments shall predominantly be made in Debt & Money
market Instruments.

Reliance Medium Term Fund :


(An Open End Income Scheme with no assured
returns.) The primary investment objective of the Scheme is
to generate regular income in order to make regular dividend
payments to unitholders and the secondary objective is
growth of capital

Reliance Short Term Fund :


(An Open End Income Scheme) The primary
investment objective of the scheme is to generate stable
returns for investors with a short investment horizon by
investing in Fixed Income Securities of short term maturity.

65
Reliance Liquid Fund :
(Open-ended Liquid Scheme). The primary investment
objective of the Scheme is to generate optimal returns
consistent with moderate levels of risk and high liquidity.
Accordingly, investments shall predominantly be made in
Debt and Money Market Instruments.

Reliance Floating Rate Fund :


(An Open End Liquid Scheme) The primary objective
of the scheme is to generate regular income through
investment in a portfolio comprising substantially of Floating
Rate Debt Securities (including floating rate securitised debt
and Money Market Instruments and Fixed Rate Debt
Instruments swapped for floating rate returns). The scheme
shall also invest in Fixed rate debt Securities (including fixed
rate securitised debt, Money Market Instruments and Floating
Rate Debt Instruments swapped for fixed returns

Reliance NRI Income Fund :


(An Open-ended Income scheme) The primary
investment objective of the Scheme is to generate optimal
returns consistent with moderate levels of risks. This income
may be complimented by capital appreciation of the portfolio.
Accordingly, investments shall predominantly be made in
debt Instruments.

66
Reliance Liquidity Fund :
(An Open - ended Liquid Scheme) The investment
objective of the Scheme is to generate optimal returns
consistent with moderate levels of risk and high liquidity.
Accordingly, investments shall predominantly be made in
Debt and Money Market Instruments.

Reliance Interval Fund:


(A Debt Oriented Interval Scheme) The primary
investment objective of the scheme is to seek to generate
regular returns and growth of capital by investing in a
diversified portfolio

Reliance Liquid Plus Fund


(An Open-ended Income Scheme.) The investment
objective of the Scheme is to generate optimal returns
consistent with moderate levels of risk and liquidity by
investing in debt securities and money market securities.

Reliance Fixed Horizon Fund –I


(A closed ended Scheme) The primary investment
objective of the scheme is to seek to generate regular returns
and growth of capital by investing in a diversified portfolio.

Reliance Fixed Horizon Fund -II


(An closed ended Scheme.) The primary investment

67
objective of the scheme is to seek to generate regular returns
and growth of capital by investing in a diversified portfolio.

Reliance Fixed Horizon Fund -III


(An Close-ended Income Scheme.) The primary
investment objective of the scheme is to seek to generate
regular returns and growth of capital by investing in a
diversified portfolio

Reliance Fixed Tenor Fund


(An Close-ended Scheme.) The primary investment
objective of the Plan is to seek to generate regular returns and
growth of capital by investing in a diversified portfolio.

Reliance Fixed Horizon Fund -Plan C


(An closed ended Scheme.) The primary investment
objective of the scheme is to seek to generate regular returns
and growth of capital by investing in a diversified portfolio.

Reliance Fixed Horizon Fund - IV:


(An Close-ended Income Scheme.) The primary
investment objective of the scheme is to seek to generate
regular returns and growth of capital by investing in a
diversified portfolio

Reliance Fixed Horizon Fund - V:


(An Close-ended Income Scheme.) The primary
investment objective of the scheme is to seek to generate

68
regular returns and growth of capital by investing in a
diversified portfolio of: -
Central and State Government securities and
Other fixed income/ debt securities normally maturing in
line with the time profile of the scheme with the objective
of limiting interest rate volatility

Reliance Fixed Horizon Fund - VI:


(An Close-ended Income Scheme.) The primary
investment objective of the scheme is to seek to generate
regular returns and growth of capital by investing in a
diversified portfolio of: -
Central and State Government securities and
Other fixed income/ debt securities normally maturing in line
with the time profile of the series with the objective of
limiting interest rate volatility

Reliance Fixed Horizon Fund - VII:


(An Close-ended Income Scheme.) The primary
investment objective of the scheme is to seek to generate
regular returns and growth of capital by investing in a
diversified portfolio of: -
Central and State Government securities and
Other fixed income/ debt securities normally maturing in line
with the time profile of the series with the objective of
limiting interest rate volatility.

69
SECTOR SPECIFIC SCHEMES

Sector Funds are specialty funds that invest in stocks


falling into a certain sector of the economy. Here the
portfolio is dispersed or spread across the stocks in that
particular sector. This type of scheme is ideal for investors
who have already made up their mind to confine risk and
return to a particular sector.

Reliance Banking Fund


Reliance Mutual Fund has an Open-Ended Banking
Sector Scheme which has the primary investment objective to
generate continuous returns by actively investing in equity /
equity related or fixed income securities of banks.

Reliance Diversified Power Sector Fund


Reliance Diversified Power Sector Scheme is an Open-
ended Power Sector Scheme. The primary investment
objective of the Scheme is to seek to generate consistent
returns by actively investing in equity / equity related or fixed
income securities of Power and other associated companies.

Reliance Pharma Fund


Reliance Pharma Fund is an Open-ended Pharma
Sector Scheme.

70
The primary investment objective of the Scheme is to
generate consistent returns by investing in equity / equity
related or fixed income securities of Pharma and other
associated companies.

Reliance Media & Entertainment Fund


Reliance Media & Entertainment Fund is an Open-
ended Media & Entertainment sector scheme.The primary
investment objective of the Scheme is to generate consistent
returns by investing in equity / equity related or fixed income
securities of media & entertainment and other associated
companies

EXCHANGE TRADED FUND

Reliance Gold Exchange Traded Fund:


(An open-ended Gold Exchange Traded Fund) the
investment objective is to seek to provide returns that closely
correspond to returns provided by price of gold through
investment in physical Gold (and Gold related securities as
permitted by Regulators from time to time). However, the
performance of the scheme may differ from that of the
domestic prices of Gold due to expenses and or other related
factors.

71
GROWTH OF RELIANCE MUTUAL
FUND THROUGH RECOGNITION

Growth through Recognition

72
Reliance has merited a series of awards and recognitions for
excellence for businesses and operations.

Corporate Ranking and Ratings:

Reliance featured in the Fortune Global 500 list of ‘World’s


Largest Corporations’ for the fourth consecutive year.

• Ranked 269th in 2007 having moved up 73 places


from the previous year.

• Featured as one of the world’s Top 200 companies in


terms of Profits.

• Among the top 25 climbers for two years in a row.

• Featured among top 50 companies with the biggest


increase in Revenues.

• Ranked 26th within the refining industry.

Reliance is ranked 182nd in the FT Global 500 (up from


previous year’s 284th rank).

• PetroFed, an apex hydrocarbon industry association,


conferred the PetroFed 2007 awards in the categories
of “Refinery of the Year” and “Exploration &
Production - Company of the Year”.

73
• Brand Reliance was conferred the “Bronze Award” at
The Buzziest Brands Awards 2008, organized by
agencyfaqs!

• Institute of Economic Studies conferred the “Udyog


Ratna” award in October 2007 for contributions to the
industry.

• Chemtech Foundation conferred the “Hall of Fame”


in February 2008 for sterling contributions to the
industry.

• Chemtech Foundation conferred the “Outstanding


Achievement - Oil Refining” for work at the
Jamnagar Manufacturing Division.

Petroleum Federation of India conferred the “Refinery of the


Year Award - 2007” to Jamnagar Manufacturing Division

• “The Plastics Export Promotion Council -


PLEXCOUNCIL Export Award” in the category of
Plastic Polymers for the year 2006-2007 was awarded
to Reliance being the largest exporter in this category.

74
AWARDS OF THE COMPANY-

1. Reliance Capital Asset Management Ltd. won the Asia


Asset Management Award 2007

2. Reliance Capital Asset Management Ltd. won the Social &


Corporate Governance Award 2007

3. Reliance Mutual Fund has been awarded the "NDTV


Business Leadership Award 2007" in the Mutual Fund
category.

4. CNBC TV18 - CRISIL Mutual Fund of the Year Award for


2007

Achievements

75
In two successive joint surveys by The Economic Times’
Brand Equity and AC Nielsen, Reliance was recognized as
India’s Most Trusted Mutual Fund. The company also walked
away with seven other scheme prizes – five of them being
outright winners – in the Gulf 2007 Lipper Awards. These
included the Fund House of the Year by Lipper GCC as well
as ICRA Online and the Most Improved Fund House by Asia
Asset Management. It also received the NDTV Business
Leadership Award 2007 in the mutual fund category and
runners’ up recognition as the Best Fund House in the
Outlook Money-NDTV Profit Awards. In addition, the
company received the coveted CNBC Web18 Genius of the
Web distinction for the Best Mutual Fund Website in the
country. RCAM was awarded the India Onshore Fund House
2008 instituted by the Asian Investor magazine. The
company also won the India Equities award in the 5-
yearPerformance category.

OBJECTIVES OF THE STUDY

• To create the awareness of Mutual Fund among


people and getting the opinion of people regarding
Mutual Funds.
• To study Mutual Fund Industry in India.
• To give an idea about the regulations of mutual funds.

76
• To give a brief idea about the benefits available from
mutual Fund investment.
• To give an idea of different Schemes provided by
Reliance Mutual Fund.
• To study the performance of different schemes of the
Company.
• To study the Monthly Returns with respect to their
Benchmark.
• To analyze reliance mutual fund strategy against its
competitor.

SCOPE OF THE STUDY:


• The study was limited to just finding the risk
and returns associated with the schemes.
• The study covers the six different schemes
provided by Reliance Mutual Fund. Are as : 1)
Reliance Growth Fund-BSE100
2)Reliance Equity Fund-S&P CNX NIFTY
3)Reliance Liquid Fund-Crisil Liquid Fund
Index

• The study covers the period of past two month


from June to July.
• The study covers only the open-ended funds.

77
RESEARCH METHODOLOGY

Research in common parlance refers to a search for


knowledge. One can also define research as a
scientific and systematic search for pertinent
information on a specific topic.

METHOD OF RESEARCH DESIGN TO BE USED


UNDER STUDY IS:

 DESCRIPTIVE RESEARCH:
In this research an attempt has been made to analyze
the past performance of the Reliance Mutual schemes and to
know the benefits to the investors. The study is to be done on
different schemes provided by the company to know the
company’s performance for the past few months and to know
the risk and returns of the funds.

METHODOLOGY OF DATA COLLECTION:

78
In this project work primary and secondary data has been
used:-

Primary data - The primary data to be selected is based


upon the response of the respondents to the
questionnaire designed. Primary data collection helps in
the specific purpose of addressing the problem at hand.
The primary data is collected in 2 ways:
 Questionnaire:
Structured Questionnaire has been filled by the
respondents to analyze its effectiveness.

 Personal Interviews:
Data has been collected from the personal interviews of
the corporate.

Secondary data - Secondary data are collected from


the following methods:-
1) Journals
2) Books
3) Magazines
4) News paper
5) Websites
6) Fact sheets of various mutual funds

TOOLS & TECHNIQUES USED FOR THE STUDY

79
• Beta:
• Standard deviation
• Alpha
• Sharpe Ratio
• Treynor Ratio
• Bar chart
• Average& Percentage method

CONCEPTUAL DESIGN:

Sample unit: Schemes of Reliance Mutual Fund.


Sample size: Five years monthly Navs & 50persons.

LIMITATIONS OF THE STUDY:

80
• The study was limited only to Reliance Mutual
Fund schemes.
• Only six schemes have been taken for
analysis.
• The study was limited to the extent of just
finding the risks and returns of each schemes of the
fund.
• The time constraint was one of the major
problems.

• The study is limited to the different schemes available


under the mutual funds selected.
• The study is limited to selected mutual fund schemes.
• The lack of information sources for the analysis part.

81
RISK RETURN ANALYSIS OF
THE SCHEMES
A rational investor before investing his/her money in
stock analysis the risk associated with the particular stock.
The actual returns he receives from the stock may vary from
the expected one and thus an investor is always caution about
the rate of risk associated with particular stock. hence it
becomes very essential on the part of investors to know the
risk as the hard earned money is being invested with the view
to good return on investment.
Risk mainly consists of two components.
• Systematic risk
• unsystematic risk

Systematic risk
The systematic risk affects the entire market. The
economic conditional, political situation, sociological change
affects the entire market in turn affecting the company and
even the stock market. These situations are uncontrollable by
corporate and investeors.

82
Unsystematic risk
The Unsystematic risk is unique to industries. It differs
from industries to industries. Unsystematic risk stems from
managerial inefficiency, technological change in production
process, availability of raw materials, change in the customer
preference and labour problem. The nature and magnitude of
above mentioned factors differ from industry to industry and
company to company.

In general view, the risk for any investor would be the


probably loss from investing money in any mutual fund.but
when look at the technical side of its, we cant just say these
schemes/ fund carry risk without any proof. They are certain
set formulas to say the percentage risk associated with it.

There are certain tools or formulas used to calculate the


risk associated with schemes. These tools helps us to
understand the associated wit the schemes. These schemes
are compared with the benchmark BSE 100
THE TOOLS USED FOR CALCULATION
 Standard deviation
 Beta
 Alpha
 Sharpe ratio
 Treynor ratio

83
Arithmetic mean
AM=Σy/N
Where y= returns of NAV values
N= number of observation

Average returns that can be expected from investment. The


Arithmetic returns is appropriate as a measure of a central
tendency of a number of returns calculated from particular
time i.e. for 5 years.

RETURNS
Investor wants to maximize expected retunes subject to
their tolerance for risk. Returns are the motivating force and
principal reward in investment process and it is the key
method available to investors in comparing alternative the
investments. Measuring the historical returns allows investor
to access the how well the stocks have performed. Investor
get returns either in form of interest, dividend or capital
appreciation. There are two terms, realized term and expected
return. Realized return earned in past.

RETURN=( Closing price-opening price) /opening price*100

STANDARD DIVEATION

84
The Standard deviation is measure of the variables around
its mean or it is square root of the sum of the squared root
deviations from the mean divided the number of observation.

S.D is used to measure the variability of return i.e the a


measure of dispersion. S.D is calculated as the square root of
variation. In finance investments volatility.S.D is also know
as historical volatility and its used by investors as a gauge
from the amounted of volatility.

S.D=√(y-Y)²
N
Where y= return of portfolio
Y=average return of portfolio
N= number of months

BETA: Beta describes the relationship between the securities


return and the index returns.
1 Beta = + 1.0

One percent change in market index returns causes exactly


one percent change in the security return. It indicates that the
security moves in tandem with the market.

1 Beta = + 0.5

One percent change in the market index return causes 0.5


percent change in the security return. The security is less

85
volatile compared to the market.

1 Beta = + 2.0

One percent change in the market index return causes 2


percent change in the security return. The security return is
more volatile. When there is a decline of 10% in the market
return, the security with beta of 2 would give a negative
return of 20%. The security with more than 1 beta value is
considered to be risky.

1 Negative Beta

Negative beta value indicates that the security return moves


in the opposite direction to the market return. A security with
a negative beta of -1 would provide a return of 10%, if the
market return declines by 10% and vice-versa.

Beta= N*Σxy-(Σx)(Σy)
N*Σ(x)²-(Σx)²
Where
N=No of observation
X=Total of market index value
Y=Total of return to Nav

86
ALPHA:
Alpha represent the forecast of residual return, which
we consider the future return of any portfolio. Alpha
measures the unsystematic risk of a portfolio property
because the portfolio property also consists of both residual
return and future expectation.

It is important to remember that the risk-free


portfolio will always show a zero residual return hence, any
risk less security like cash will have always alpha equal to
zero. A positive alpha of 1.0 means the fund has
outperformed its benchmark index by 1% correspondingly, a
similar negative alpha would indicate an underperformance
of 1%. Alpha indicates that the stock return is independent of
the market return .A positive value of alpha is a healthy sign.
Positive alpha values would yield profitable return.

The Formula is used to calculate:-


Alpha=Y-beta(x)

Where

Y-average return to nav return X-average return to


market index
SHARPE RATIO

87
The performance measure developed by William sharpe
is referred to as the sharpe ratio or the reward to variability
ration. It is the ratio of the reward or risk to the variability of
return or risk measured by the standard deviation of return the
formula for calculating sharpe ratio may be stated as:
Sharpe ratio= Rp-Rf
S.D
Where,
Rp=Realised return on the portfolio.
Rf=Risk free rate of return.
S.D=standard deviation of portfolio return
Sharpe performance index gives a single value to be used for
the performance ranking of various fund or portfolio. sharpe
index measures the risk premium of the portfolio relative to
the total amount of risk in the portfolio. The risk premium is
the difference between the portfolio’s average rate of return
and the risk less rate of return. The standard
Deviation of the portfolio indicates the risk.
Higher the value of sharpe ratio better the fund has
performed. Sharpe ratio can be used to rank the desirability of
fund or portfolio. The fund that has performed well compared
to other will be rank first than others.

Treynor ratio
The performance measure by jack. Treynor is
referred to as Treynor ratio or reward to volatility ratio. It is
the ratio of the reward or risk premium to the volatility of

88
return as measuring by the portfolio beta. The formula for
calculating Treynor ratio may be stated as:
Treynor ratio= Rp-Rf
Beta
Where:
Rp= realized return on the portfolio
Rf= risk free rate of return
Beta=portfolio beta.

ANALYSIS AND INTERPRETATION

1) RELIANCE GROWTH FUND:


Benchmark -100
RETURN 0F PORTFOLIO MARKET RETURN
DATE NAV Rp(y) (y-Y) (y-Y)² INDEX Rm(x) (x*X) x*y
Jan 05 34.95 2946.14
Feb 05 35.5 1.5737 0.36844 0.136 2923.99 -0.7518 0.5653 -1.1831
Mar 05 27.99 -21.155 -22.36 500 2966.31 1.44734 2.0948 -30.618
Apr 05 29.83 6.5738 5.36854 28.82 3025.14 1.98327 3.9334 13.038
May 05 25.59 -14.214 -15.419 237.7 2658.23 -12.129 147.11 172.4
Jun 05 25.88 1.1333 -0.072 0.005 2561.16 -3.6517 13.335 -4.1383
Jul 05 28.31 9.3895 8.18426 66.98 2755.22 7.57704 57.411 71.144
Aug 05 31.23 10.314 9.10914 82.98 2789.07 1.22858 1.5094 12.672
Sep 05 32.93 5.4435 4.23825 17.96 2997.07 7.45768 55.617 40.596
Oct 05 30.48 -7.44 -8.6453 74.74 3027.96 1.03067 1.0623 -7.6682
Nov 05 33.52 9.9738 8.76852 76.89 3339.75 10.297 106.03 102.7
Dec 05 35.41 5.6384 4.43319 19.65 3580.34 7.20383 51.895 40.618
TOTAL 7.2314 1106 TOTAL 21.693 440.56
Y=Σy/12 1.2052 X=Σx/12 1.9721

89
4000 40

3500 35

3000 30

2500 25
index
2000 20
Navs
1500 15

1000 10

500 5

0 0
1 2 3 4 5 6 7 8 9 10 11 12

Analysis:
The above graph shows the movement of NAV of
reliance growth fund and Benchmark index for the period
from Jan 2005 to Dec 2005. From the above graph we can see
there is some correlation between the movement of both

Dec 05 35.41 3580.34


Jan 06 35.35 -0.1694 -3.1427 9.877 3521.71 -1.6376 2.6816 0.2775
Feb 06 37.91 7.2419 4.26861 18.22 3611.9 2.56097 6.5586 18.546
Mar 06 32.61 -13.98 -16.954 287.4 3481.86 -3.6003 12.962 50.334
Apr 06 33.66 3.2199 0.24661 0.061 3313.45 -4.8368 23.394 -15.574
May 06 36.16 7.4272 4.45396 19.84 3601.73 8.7003 75.695 64.619
Jun 06 36.75 1.6316 -1.3416 1.8 3800.24 5.51152 30.377 8.9928
Jul 06 41.13 11.918 8.94511 80.01 4072.15 7.15507 51.195 85.277
Aug 06 45.72 11.16 8.18648 67.02 4184.83 2.76709 7.6568 30.88
Sep 06 47.57 4.0464 1.07311 1.152 4566.63 9.12343 83.237 36.917

90
Oct 06 42.94 -9.733 -12.706 161.4 4159.59 -8.9134 79.448 86.754
Nov 06 47.74 11.178 8.20513 67.32 4649.87 11.7867 138.93 131.76
Dec 06 48.57 1.7386 -1.2347 1.524 4953.28 6.52513 42.577 11.344
TOTAL 35.679 715.7 TOTAL 35.1422 554.71 509.85
Y=Σy/12 2.9733 X=Σx/12 2.92852

6000 60

5000 50

4000 40

index
3000 30
Navs

2000 20

1000 10

0 0
1 2 3 4 5 6 7 8 9 10 11 12

Analysis:
The above graph shows the movement of NAV of
reliance growth fund and Benchmark index for the period
from Jan 2005 to Dec 2005. From the above graph we can see
there is some correlation between the movement of both

91
Dec 06 48.57 4953.28
Jan 07 52.1 7.2679 5.69572 32.44 5224.97 5.48505 30.086 39.865
Feb 07 52.82 1.382 -0.1902 0.036 5422.67 3.78375 14.317 5.229
Mar 07 51.42 -2.6505 -4.2227 17.83 5904.17 8.87939 78.844 -23.535
Apr 07 55.34 7.6235 6.05135 36.62 6251.39 5.88093 34.585 44.833
May 07 49.36 -10.806 -12.378 153.2 5385.21 -13.856 191.98 149.72
Jun 07 44.66 -9.5219 -11.094 123.1 5382.11 -0.0576 0.0033 0.5481
Jul 07 43.34 -2.9557 -4.5278 20.5 5422.39 0.74841 0.5601 -2.212
Aug 07 48.34 11.537 9.96454 99.29 5933.77 9.4309 88.942 108.8
Sep 07 52.55 8.7091 7.137 50.94 6328.33 6.6494 44.214 57.911
Oct 07 53.08 1.0086 -0.5636 0.318 6603.6 4.3498 18.921 4.3871
Nov 07 55.1 3.8056 2.23343 4.988 6931.05 4.95866 24.588 18.871
Dec 07 57.01 3.4664 1.89428 3.588 6982.58 0.74347 0.5527 2.5772
TOTAL 18.866 542.8 TOTAL 36.9964 527.6 407
Y=Σy/12 1.5721 X=Σx/12 3.08303

6000 60

5000 50

4000 40
index

3000 30 Nav

2000 20

1000 10

0 0
1 2 3 4 5 6 7 8 9 10 11 12

Analysis:
The above graph shows the movement of NAV of
reliance growth fund and Benchmark index for the period

92
from Jan 2005 to Dec 2005. From the above graph we can see
there is some correlation between the movement of both

Dec 07 57.01 6982.58


Jan 08 59.12 3.7011 0.30373 0.092 7145.91 2.33911 5.4714 8.6573
Feb 08 55.73 -5.7341 -9.1315 83.38 6527.12 -8.6594 74.984 49.654
Mar 08 47.86 -14.122 -17.519 306.9 6587.21 0.92062 0.8475 -13.001
Apr 08 50.8 6.1429 2.74554 7.538 7032.93 6.76645 45.785 41.566
May 08 54.29 6.8701 3.4727 12.06 7468.7 6.19614 38.392 42.568
Jun 08 56.7 4.4391 1.04175 1.085 7605.37 1.8299 3.3485 8.1232
Jul 08 59.77 5.4145 2.01709 4.069 8004.05 5.24209 27.479 28.383
Aug 08 53.86 -9.8879 -13.285 176.5 7857.61 -1.8296 3.3473 18.091
Sep 08 60.06 11.511 8.11395 65.84 8967.41 14.1239 199.48 162.58
Oct 08 69.89 16.367 12.9696 168.2 10391.19 15.8773 252.09 259.86
Nov 08 72.38 3.5627 0.16537 0.027 10384.4 -0.0653 0.0043 -0.2328
Dec 08 81.43 12.503 9.10608 82.92 11154.28 7.41381 54.965 92.698
TOTAL 40.769 908.6 TOTAL 50.155 706.2 698.95
Y=Σy/12 3.3974 X=Σx/12 4.17958

12000 90

80
10000
70

8000 60

50 index
6000
40 Navs

4000 30

20
2000
10

0 0
1 2 3 4 5 6 7 8 9 10 11 12

93
Analysis:
The above graph shows the movement of NAV of
reliance growth fund and Benchmark index for the period
from Jan 2005 to Dec 2005. From the above graph we can see
there is some correlation between the movement of both

Dec 08 81.43 11154.28


Jan 09 67.48 -17.1313 -10.291 105.9 9440.94 -15.36 235.94 263.14
Feb 09 65.61 -2.77119 4.06905 16.56 9404.98 -0.3809 0.1451 1.0555
Mar 09 65.61 0 6.84025 46.79 8232.82 -12.463 155.33 0
Apr 09 56.16 -14.4033 -7.563 57.2 9199.46 11.7413 137.86 -169.11
May 09 53.7 -4.38034 2.4599 6.051 8683.27 -5.6111 31.484 24.578
Jun 09 45.81 -14.6927 -7.8525 61.66 7029.27 -19.048 362.83 279.87
Jul 09 48.2036 5.22506 12.0653 145.6 7488.48 6.53283 42.678 34.134
Aug 09 48.4178 0.44437 7.28461 53.07 7621.4 1.77499 3.1506 0.7887
Sep 09 42.6755 -11.8599 -5.0196 25.2 6621.57 -13.119 172.1 155.59
Oct 09 33.1429 -22.3374 -15.497 240.2 4953.98 -25.184 634.24 562.55
Nov 09 30.471 -8.06176 -1.2215 1.492 4600.45 -7.1363 50.927 57.531
Dec 09 32.8738 7.88553 14.7258 216.8 4988.04 8.42505 70.981 66.436
TOTAL -82.0829 976.5 TOTAL -69.829 1897.7 1276.6
Y=Σy/12 -6.84025 X=Σx/12 10.5004

94
10000 80
9000
70
8000
60
7000
6000 50
index
5000 40
Navs
4000 30
3000
20
2000
1000 10

0 0
1 2 3 4 5 6 7 8 9 10 11 12

Analysis:
The above graph shows the movement of NAV of
reliance growth fund and Benchmark index for the period
from Jan 2005 to Dec 2005. From the above graph we can see
there is some correlation between the movement of both

1) STANDARD DEVIATION

S.D= √ (y-Y)
N

STANDARD
DEVIATION
YEAR (y-Y)² y-Y)²/N Square root (S.D)
2005 1102.589 91.88242 9.5855

2006 715.7085 59.64238 7.7228

95
2007 542.8451 45.23709 6.7258

2008 908.6373 75.71978 8.7017

2009 76.5005 81.37504 9.0208

2) BETA
β = N *ΣXY-(ΣX)(ΣY)

NΣX²-(ΣX)²
BETA
YEAR N* Σ XY (ΣX) ( ΣY) NΣx² (ΣX)² β
2005 5286.72 21.69324 7.231404 5286.692 470.5966 0.9878
2006 6118.165 35.14223 35.67909 6656.522 1234.977 0.8972

2007 4883.992 36.99639 18.86572 6331.154 1368.733 0.8435

2008 8387.444 50.15499 40.76851 8474.359 2515.523 1.0644

2009 15318.71 -69.8287 -82.0829 22772.07 4876.05 0.5357

3) ALPHA

α =Y-β(X)

ALPHA
YEAR Y β X α =Y-β(X)
2005 1.205234 0.9878 1.972113 -0.742819

2006 2.973257 0.8972 2.928519 0.34579

2007 1.572144 0.8435 3.083033 -1.02839

96
2008 3.397376 1.0644 4.179583 -`1.0513

2009 -6.84025 0.5357 -5.81906 -3.7229

4)SHARPE RATIO

SR=Rp-Rf/SD

Where;
Rp= (Closing Nav/opening Nav-1)

SHARPE
RATIO
YEAR Rp Rf SD SR
2005 5 9.5855
1.316166 -0.38431

2006 37.39745 5.1 7.7228


4.182091

2007 9.424184 5.7 6.7258


0.553716

2008 37.73681 7 8.7017 3.532276

2009 -51.2836 7.5 9.0208 -6.51645

5)TREYNOR RATIO

TR=Rp-Rf/β

97
TREY
NOR RATIO
YEAR Rp Rf β TR
2005 5 0.9878 -3.72933
1.316166

2006 37.39745 5.1 0.8972 35.9905

2007 9.424184 5.7 0.8435 4.415156

2008 37.73681 7 1.0644 28.87712

2009 -51.2836 7.5 0.5357 -109.732

INTERPRETATION

In the year 2005 standard deviation was high at the rate of


9.5855 and in the year 2007 standard deviation was low at
the rate of 6.7258. in the year 2008 β is 1.0644 which is high
risk because β greater than 1 in the year 2009 β value is
0.5357it is less risky because it is less than 1 . In the year
2006 sharpe index was higher at the rate of 4.182091 and in
the year 2009 sharpe index was less at the rate of -6.51645. in
the year 2006 treynor index was higher at the rate of 35.9905
and in the year 2009 treynor index was less at the rate of
-109.732 .

98
2)RELIANCE EQUITY FUND:

Benchmark- S&P CNX NIFTY


RETURN OF PORTFOLIO MARKET RETURN
DATE NAV Rp(y) (y-Y) (y-Y)2 INDEX Rm(x) (x*x) x*y
Jan 08 11.77 4899.39
Feb 08 10.94 -7.05183 -11.005 121.1029 4504.73 -8.0553 64.8877 56.8045
Mar 08 11.04 0.91408 -3.0388 9.234154 4605.89 2.24564 5.0429 2.05269
Apr 08 11.67 5.70652 1.75367 3.075358 4934.46 7.13369 50.8896 40.7086
May 08 12.35 5.82691 1.87405 3.512081 5185.95 5.09661 25.9754 29.6974
Jun 08 12.75 3.23887 -0.714 0.509775 5223.82 0.73024 0.53325 2.36516
Jul 08 13.33 4.54902 0.59617 0.355416 5483.25 4.96629 24.664 22.5917
Aug 08 13.12 -1.57539 -5.5282 30.5615 5411.29 -1.3124 1.72229 2.06748
Sep 08 14.47 10.2896 6.33678 40.15481 6094.11 12.6184 159.225 129.839
Oct 08 16.35 12.9924 9.03955 81.7134 7163.3 17.5446 307.815 227.947
Nov 08 16.56 1.2844 -2.6684 7.120615 6997.6 -2.3132 5.3508 -2.97106
Dec 08 17.77 7.30676 3.35391 11.24872 7461.48 6.62913 43.9454 48.4375
TOTAL 43.4814 308.5888 TOTAL 45.2838 690.051 559.54
Y=Σy/12 3.95285 X=Σx/12 4.11671

99
8000 20

7000 18
16
6000
14
5000
12
index
4000 10
Navs
3000 8

6
2000
4
1000 2
0 0
1 2 3 4 5 6 7 8 9 10 11 12

Analysis:
The above graph shows the movement of NAV of
reliance equity fund and Benchmark index for the period
from Jan 2005 to Dec 2005. From the above graph we can see
there is some correlation between the movement of both

Dec 08 17.77 7461.48


Jan 09 15.47 -12.9432 -8.4373 71.1878 6245.45 -16.297 265.606 210.94
Feb 09 14.63 -5.42986 -0.924 0.85376 6356.92 1.78482 3.18558 -9.69133
Mar 09 13.28 -9.22761 -4.7217 22.2948 5762.88 -9.3448 87.3249 86.23
Apr 09 14.16 6.62651 11.1324 123.93 6289.07 9.13068 83.3693 60.5045
May 09 13.47 -4.87288 -0.367 0.13469 5937.81 -5.5852 31.195 27.2162
Jun 09 11.7 -13.1403 -8.6344 74.5535 4929.98 -16.973 288.086 223.032
Jul 09 12.32 5.33932 9.84519 96.9278 5297.47 7.45419 55.5649 39.8003
Aug 09 12.63 2.45118 6.95705 48.4006 5337.28 0.75149 0.56474 1.84204
Sep 09 11.74 -7.05167 -2.5458 6.48106 4807.2 -9.9317 98.6377 70.0347
Oct 09 9.567 -18.4852 -13.979 195.422 3539.57 -26.369 695.345 487.444

100
Nov 09 9.231 -3.51629 0.98959 0.97928 3379.53 -4.5215 20.4435 15.8987
Dec 09 9.801 6.17951 10.6854 114.178 3635.87 7.58508 57.5334 46.8721
TOTAL -54.0705 755.343 TOTAL -62.317 1686.86 1260.12
Y=Σy/12 -4.50588 X=Σx/12 -5.1931 140.571

7000 18

16
6000
14
5000
12

4000 10 index

8 Navs
3000

6
2000
4
1000
2

0 0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
09 09 09 09 09 09 09 09 09 09 09 09

Analysis:
The above graph shows the movement of NAV of
reliance equity fund and Benchmark index for the period
from Jan 2005 to Dec 2005. From the above graph we can see
there is some correlation between the movement of both

1)STANDARD DEVIATION:

101
S.D= √ (y-Y)
N

YEAR (y-Y)² y-Y)²/N Square root (S.D)


2008 308.5888 25.7157 5.0710

2009 755.3429 62.9445 7.93380

2)BETA

β = N *ΣXY-(ΣX)(ΣY)

NΣX²-(ΣX)²

BETA
YEAR N* Σ XY (ΣX) ( ΣY) NΣx² (ΣX)² β
2008 6714.48 45.28385 43.48137 8280.6 2050.62 0.7617

2009 15121.48 -62.3168 -54.0705 20242.28 3883.38 0.7183

3) ALPHA

α =Y-β(X)

YEAR Y β X α =Y-β(X)
2008 3.952852 0.7617 4.116714 0.81715

102
2009 -4.50588 0.7183 -5.19307 -0.77569

4)SHARPE RATIO

SR=Rp-Rf/SD

Where;

Rp= (Closing Nav/opening Nav-1)*100

SHARPE
RATIO
YEAR Rp Rf SD SR
2008 50.97706 7 5.0710 8.672265

2009 -36.6458 7.5 7.93380 -5.56427

5)TREYNOR RATIO

TR=Rp-Rf/β
TREY
NOR RATIO
YEAR Rp Rf β TR
2008 50.97706 7 0.7617 57.7354

2009 -36.6458 7.5 0.7183 -61.4587

INTERPRETATION

103
In the year 2009 standard deviation was high at the rate of
7.93380 and in the year 2008 standard deviation was low at
the rate of 5.0710. in the year 2008 β is 0.7617 which is high
risk because β greater than 1 in the year 2009 β value is
0.7183 it is less risky compared to year 2008 . In the year
2008 sharpe index was higher at the rate of 8.672265 and in
the year 2009 sharpe index was lesser at the rate of –
5.56427. In the year 2008 treynor index was higher at the rate
of 57.7354 and treynor index was lesser at the rate of
-61.4587

3)RELIANCE LIQUID FUND

RETURN OF PORTFOLIO
DATE NAV Rp(y) (y-Y) (y-Y)2
Jan 05 11.1677
Feb 05 11.202 0.307136 -0.02615 0.000684
Jun 05 11.3348 0.303526 -0.02976 0.000886
Jul 05 11.3711 0.320253 -0.01303 0.00017
Aug 05 11.4086 0.329783 -0.0035 1.23E-05
Sep 05 11.4462 0.329576 -0.00371 1.38E-05
Oct 05 11.4878 0.363439 0.030155 0.000909
Nov 05 11.537 0.42828 0.094996 0.009024
Dec 05 11.584 0.407385 0.074101 0.005491
TOTAL 3.666125 0.022968
Y=Σy/12 0.333284

104
Dec 05 11.584
Jan 06 11.6257 0.359979 -0.01823 0.000332
Feb 06 11.6643 0.332023 -0.04618 0.002133
Mar 06 11.7086 0.379791 0.001584 2.51E-06
Apr 06 11.7494 0.348462 -0.02975 0.000885
May 06 11.7964 0.40002 0.021813 0.000476
Jun 06 11.8397 0.367061 -0.01115 0.000124
Jul 06 11.8838 0.372476 -0.00573 3.29E-05
Aug 06 11.924 0.338276 -0.03993 0.001595
Sep 06 11.9632 0.328749 -0.04946 0.002446
Oct 06 12.0086 0.379497 0.001289 1.66E-06
Nov 06 12.0639 0.460503 0.082296 0.006773
Dec 06 12.1208 0.471655 0.093447 0.008732
TOTAL 4.538493 0.023533
Y=Σy/12 0.378208

Dec 06 12.1208
Jan 07 12.1862 0.539568 10.12145 102.4438
Feb 07 12.243 0.466101 10.04798 100.962
Mar 07 12.3054 0.509679 10.09156 101.8396
Apr 07 12.3561 0.412014 9.993898 99.87799
May 07 12.4067 0.409514 9.991398 99.82803
Jun 07 12.459 0.421546 10.00343 100.0686
Jul 07 12.5136 0.438237 10.02012 100.4028
Aug 07 12.5759 0.497858 10.07974 101.6012
Sep 07 12.6371 0.486645 10.06853 101.3753
Oct 07 0 -100
Nov 07 0 0
Dec 07 -- 0
TOTAL -95.8188 908.3993
Y=Σy/12 -9.58188

105
Dec 07 0
Jan 08 12.9355 0
Feb 08 13.0013 0.508678 0.045501 0.00207
Mar 08 13.0952 0.722235 0.259059 0.067112
Apr 08 13.2044 0.833893 0.370717 0.137431
May 08 13.2676 0.478628 0.015452 0.000239
Jun 08 13.2842 0.125117 -0.33806 0.114284
Jul 08 13.2926 0.063233 -0.39994 0.159955
Aug 08 13.3493 0.426553 -0.03662 0.001341
Sep 08 13.4105 0.458451 -0.00473 2.23E-05
Oct 08 13.4662 0.415346 -0.04783 0.002288
Nov 08 13.5369 0.525018 0.061842 0.003824
Dec 08 13.6097 0.537789 0.074613 0.005567
TOTAL 5.094942 0.494134
Y=Σy/12 Y 0.463177

Dec 08 13.6097
Jan 09 13.6668 0.419554 -0.13968 0.01951
Feb 09 13.7314 0.472678 -0.08656 0.007492
Mar 09 13.8034 0.524346 -0.03489 0.001217
Apr 09 13.8604 0.412942 -0.14629 0.021401
May 09 13.9262 0.474734 -0.0845 0.00714
Jun 09 14.0024 0.54717 -0.01206 0.000146
Jul 09 14.0846 0.587042 0.027809 0.000773
Aug 09 14.176 0.648936 0.089702 0.008047
Sep 09 14.2857 0.773843 0.21461 0.046057

106
Oct 09 14.4055 0.838601 0.279367 0.078046
Nov 09 14.4827 0.535906 -0.02333 0.000544
Dec 09 14.5515 0.47505 -0.08418 0.007087
TOTAL 6.710801 0.197461
Y=Σy/12 0.559233

STANDARD DEVIATION

S.D= √ (y-Y)
N

STANDA
RAD
DEVIATION
YEAR (y-Y)2 y-Y)2/N Square root (S.D)
2005 0.022968 1.914 1.1761

2006 0.023533 1.961 1.4003

2007 908.3993 75.69 8.7005

2008 0.494134 0.0411 0.2029

2009 0.541306 0.0451 0.212

INTERPRETATION

In the year 2007 standard deviation was high at the rate of


8.7005 and in the year 2009 standard deviation was low at
the rate of 0.212

107
INTERPRETATION
1)Standard Deviation:

• When we see Reliance growth fund it has high


standard deviation in the year 2005 as compared to
other 4 years i.e 2006,2007,2008 &2009
• When we see Reliance equity fund it has high
standard deviation in the year 2009 as compared to
another one year i.e 2008
• When we see Reliance liquid fund has high standard
deviation in 2007 compared other years
• Here standard deviation is referred to volatility of
Nav of the scheme hence the one with high standard
deviation means it has high volatility hence the
standard deviation is directly related to the returns
hence higher the standard deviation higher the returns

2)Beta:
• βBeta is referred to how much the portfolio is dependent
on the market return so higher the β higher the dependent
hence high risk i.e systematic risk

• When we see Reliance growth fund in 2008 it has high β


i.e if 10% decrease in Rm result in 10%cRp which very
dangerous to invest ors but at the when observe in 2009

108
i.e o.5357 which mean 10%decrease in Rm results in 5.3
Rp which is healty sigh i.e the 2006 the scheme has
lowest systematic risk .

• In 2005 1.048 which has higher β value which means the


schemes has involved highest risk
• But it is scheme is all the 5 years the βvalue is less
than or which
means decrease in Rm is greater tham decrease in Rp
• So it has less systematic risk compared to reliance growth fnd
• When we observe Reliance equity fund the β valu
0.7677 which is highest in the 2008.
• Where as in the other one year 2009 is 0.7183

3 Alpha

By observing the all the 3 schemes we can see that


all schemes over the all
3 year s have negative are on . The reason behind
alpha in the 3 in due to
change in investment pattern of the as in 2007

4) Sharpe ratio :

109
Since sharpe ratio is one of the most popular method of
knowing the risk associated with the particulars scheme the
higher the ratio better is the performance

• In case of Reliance growth fund the sharpe ratio is


high in the year 2006 i.e 4.182091 compared to other
four year 2005 i.e -0.38431,2007 i.e 0.553716 2008
i.e 3.532276 & 2009 i.e -6.51645. so we can say that
scheme has performed very well in the year 2006 or
compared to other four yea

• In case of Reliance equity fund the sharpe ratio is


high in the year 2008 i.e 8.672265 compared to other
one year 2009 i.e -61.4587 this very good sigh as
compared to all other scheme ,this scheme has
recorded higher sharpe ratio with the value of
8.672265 in 2008.

5) Treynor’s Ratio:

Now coming to another ratio which is derived as treynor’s


ratio which is different from sharp ratio since this ratio
observe & consider only systematic risk. which is
uncontrollable but where as sharp ratio considers both

110
controllable & uncontrollable risk i.e systematic as well as
unsystematic.
• In case of Reliance growth fund the ratio is high in
the year 2006 i.e 3.25708 compared to other four
years 2005.e 1.16950,2007 i.e 1.79626, 2008
i.e3.12612 and 2009 i.e – 12.9086.so we say the
scheme performed very well in year 2006 compared
to other four years but in 2009 it has lower
performance.
• In case of Reliance equity fund the ratio is high in the
year 2008 i.e 5.09761 compared to last year 2009 i.e
-6.37737. so we can say the scheme performed very
well in year 2008 compared to last year.

111
COMPARATIVE STUDY OF
MUTUAL FUND
Major competitor of Reliance Mutual Fund

Company Profile of HDFC

HDFC BANK is one of the leading Depository Participant


(DP) in the country with over 8 Lac demat accounts.

HDFC Bank Demat services offers you a secure and


convenient way to keep track of your securities and
investments, over a period of time, without the hassle of
handling physical documents that get mutilated or lost in
transit.

HDFC BANK is Depository particpant both with -National


Securities Depositories Limited (NSDL) and Central
Depository Services Limited (CDSL).

112
Features & Benefits

As opposed to the earlier form of dealing in physical


certificates with delays in transaction, holding and trading in
Demat form has the following benefits :

• Settlement of Securities traded on the exchanges as


well as off market transactions.
• Shorter settlements thereby enhancing liquidity.
• Pledging of Securities.
• Electronic credit in public issue.
• Auto Credit of Rights / Bonus / Public Issues /
Dividend credit through ECS.
• Auto Credit of Public Issue refunds to the bank
account.
• No stamp duty on transfer of securities held in demat
form.
No concept of Market Lots.
Change of address, Signature, Dividend Mandate,
registration of power of attorney, transmission etc. can be
effected across companies held in demat form by a single
instruction to the Depository Participant (DP).

Secured & easy transaction processing

113
HDFC Bank Ltd provides convenient facility called 'SPEED-
e' (Internet based transaction) whereby account holder can
submit delivery instructions electronically through SPEED-e
website (https://speed-e.nsdl.com). SPEED-e offers secured
means of transaction processing eliminating preparation of
instruction slips and submission of the same across the
counter to the depository participant. The 'IDEAS' facility
helps in viewing the current transactions and balances
(holdings) of Demat account on Internet on real time basis.

Company Profile of ICICI

ICICIDirect (or ICICIDirect.com) is stock trading company


of ICICI Bank. Along with stock trading and trading in
derivatives in BSE and NSE, it also provides facility to invest
in IPOs, Mutual Funds and Bonds. Trading is available in
BSE and NSE

ICICIDirect offers 3 different online trading platforms to its


customers

1. Investment Account

Along with stock trading and IPO investing in BSE


and NSE, Wise Investment account also provide
options to invest in Mutual Funds and Bonds online.

114
Online Mutual funds investment allows investor to
invest on-line in around 19 Mutual Fund companies.
ICICI Direct offers various options while investing in
Mutual Funds like Purchase Mutual Fund,
Redemption and switch between different schemes,
Systematic Investment plans, Systematic withdrawal
plan and transferring existing Mutual Funds in to
electronic mode. This account also provides facility to
invest in Government of India Bonds and ICICI
Bank Tax Saving Bonds.
ICICIDirect.com website is the primary tool to invest
in Mutual Funds, IPOs, Bonds and stock trading.

Reliance Mutual Fund


Tax Saving funds Reliance Money:

Tax-saving funds (due to their equity-oriented


nature) are capable of clocking far superior returns their
assured return counterparts like National Savings Certificate
(NSC) and Public Provident Fund (PPF). However investors
must appreciate that the risk profile of tax-saving funds tends
to be proportionately higher.

Reliance Tax Saver (ELSS) Fund (RTSF) is the latest


entrant in the tax-saving funds segment. Flagship diversified
equity funds (Reliance Growth Fund and Reliance Equity

115
Fund) from Reliance Mutual Fund have emerged as top
performers in their segment across time horizons. However
investors should note that these funds are managed
aggressively; also they have displayed an opportunistic streak
by moving fluidly across market segments (large caps, mid
caps) to clock superior growth. RTSF is likely to be a similar
(high risk - high return) investment proposition within the
tax-saving funds segment.

SYSTEMATIC INVESTMENT PLAN

SIP is a way of investing in Mutual Funds. It is


designed for those investors who are willing to invest
regularly rather than making a lump sum investment. It is just
like a recurring deposit with the post office or bank where we
deposit some amount every month. The difference here is that
the amount is invested in a mutual fund. Mutual Fund makes
investment according to their objective .They collect fund
from investor and invests it. Every fund has an objective and

116
pattern of investing. There are various kinds of mutual funds.
There are equity funds and debt funds. Further equity funds
can be divided into equity diversified mutual fund where
funds are invested in shares of different companies , sectoral
funds where investment is made in shares of some particular
sector like FMCG, IT, Auto, Oil & Gas, Banking etc. Every
fund has a NAV (net asset value) which is the value per unit.
It is calculated as the total asset is divided by the number of
outstanding units. As the value of asset changes, nav also
changes.

The best way to invest in stock market is mutual fund through


Systematic Investment Plan. But to get the benefit of an SIP,
a long term horizon is must.

117
DATA ANALYSIS AND
INTERPRETATION

Q.1 Which banking mutual fund do you


prefer for mutual
Fund ?

Co mpany Name Persentages of respondents


Reliance Money 25
HDFC 10
ICICI 15

25

20

15

10

0
Reliance HDFC ICICI

118
INTERPRETATION: 50% of
respondent have Reliance Money , 30%
of respondent says that other%.

Q.2 Which banking mutual fund offer


you good investment plan?

Company Name Percentage of respondent


Reliance 22
HDFC 21
ICICI 7

119
25

20

15

10

0
RELIANCE HDFC ICICI

INTERPRETATION:
44% respondent for Reliance,32
%forHdfc,14% for ICICI

Q.3 Which banking mutul fund offer a


lot of tax saving?
Company Name Percentage of respondent
Reliance 20
HDFC 15

120
ICICI 15

20

15

10

0
Reliance HDFC ICICI

INTERPRETATION:
40% respondent for Reliance,30
%forHdfc,30% for ICICI

121
Q.4 Which banking mutual fund offer
you a large number of product &
services?
Company Name Percentage of respondent
Reliance 18
HDFC 16
ICICI 16

18

17.5

17

16.5

16

15.5

15
Reliance HDFC ICICI

INTERPRETATION:
36% respondent for
Reliance,32%forHdfc,32% for ICICI

122
Q.5 Which banking mutual fund offer
you a good e-mail facility ?
Company Name Percentage of respondent
Reliance 22
HDFC 15
ICICI 13

25

20

15

10

0
Reliance HDFC ICICI

INTERPRETATION:
44% respondent for
Reliance,30%forHdfc,26% for ICICI

123
Represent by pie chart

ICICI
29%
Reliance
41%

HDFC
30%

OBSERVATION

 50% of respondent have Reliance


Money , 30% of
respondent says that other%.

124
 44% respondent for Reliance,32
%forHdfc,14% for ICICI.

 40% respondent for Reliance,30


%forHdfc,30% for ICICI.

 36% respondent for


Reliance,32%forHdfc,32% for
ICICI.

 44% respondent for


Reliance,30%forHdfc,26% for
ICICI.

FINDINGS AND SUGGESTION

In Equity Schemes we have taken Reliance Vison Fund and


Reliance growth Fund . Both schemes are open ended but
Reliance Growth fund is more valuable for Reliance Mutual
Fund than reliance vision Fund.

125
In Dedt scheme we have taken Reliance money Manager
Fund and Reliance Liquidty Fund .In it boths schemes are
open ended but reliance money manager is more beneficial
for reliance mutual fund .In sector specific scheme we have
taken Reliance media and entertainment fund and Reliance
Pharma fund scheme both is more efficient for Reliance
Mutual Fund.

Above all the schemes of Reliance Mutual Fund Debt


schemes are best schemes for Mutual Fund .

There is a Good investment plan and saving scheme in


reliance Mutual Fund.

126
SUGGESTION
• Reliance Money have to add some extra features in it
with aggressive marketing promotional strategy.
• Advertisement on television is the main source of
attraction so the company must advertise its products
heavily.
• Product must be improved .
• There should be provision of complain suggestion
boxes at each branch.

127
CONCLUSION
Mutual Fund investment is better than other raising fund .
Reliance Mutual Fund have good returns in investment .

A good brand is always welcomed over here people are more


aware and conscious for the brand so they go for they are
ready to spend some extra bucks for the quality .

At last all con be concluded by that Reliance Mutual Fund is


still growing industry in India and is still exploring its
potential and prospects in here.

128
BIBLIOGRAPHY

Books:

1. Security Analysis and Portfolio Management


(sixth Edition 1995) by Donald E. Fisher and
Ronald J. Jordan. Publication: Pearson
education.

2. The Indian Financial System (second edition)


by Bharati V. Pathak. Published by Dorling
Kindersley (India) Pvt. Ltd., licensees of
Pearson Education in South Asia.

129
3. Security Analysis and Portfolio Management
by Khan and Jain.

Magazines:
• Money Outlook (May &June 2009)

• Business world (May & June 2009)

Websites:

• www.Reliancemutualfund.com

• www.amfiindia.com

• www.moneycontrol.com

• www.sebi.gov.in

• www.bseindia.com

• www.nseindia.com

• www.mutualfundsindia.com

• www.indiainfoline.com

• www.in.finance.yahoo.com

• www.investing.businessweek.com

QUESTIONNAIR

130
Q.1 Which banking mutual fund do you
prefer for mutual
Fund ?
• Reliance Money
• HDFC
• ICICI

Q.2 Which banking mutual fund offer


you good investment plan?
• Reliance Money
• HDFC
• ICICI

Q.3 Which banking mutul fund offer a


lot of tax saving?
• Reliance Money
• HDFC
• ICICI

Q.4 Which banking mutual fund offer


you a large number of product &
services?
• Reliance Money
• HDFC
• ICICI

131
Q.5 Which banking mutual fund offer
you a good e-mail facility ?
• Reliance Money
• HDFC
• ICICI

“MUTUAL FUND INVESTMENT IS

SUBJECT TO MARKET RISKS.

PLEASE READ THE OFFER

DOCUMENT CAREFULLY

BEFORE INVESTING”

132