A STUDY ON

Portfolio management in Equity funds

In

kotak mahindra asset management company limited

A project report Submitted in partial fulfillment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

ACKNOWLEDGEMENT
It gives me immense pleasure to express my deep sense of gratitude to Mr.PRASANNA UDARAGUDI branch manager KMAMC branch and Mr. SURISH , sales executive KMAMC , for their valuable guidance and consistent supervision through out the course of my project

CONTENTS
CHAPTER-I INTRODUCTION

CHAPTER-II

OBJECTIVES AND METHODOLOGY

CHAPTER-III

COMPANY PROFILE

CHAPTER-IV

THEORETICAL FRAME WORK OF WORKING CAPITAL MANAGEMENT

CHAPTER-V

DATA ANALYSIS AND INTERPRETATIONS

CHAPTER-VI

SUMMARY AND SUGGESTIONS

CHAPTER I INTERODUCTION

INTRODUCTION
Financial management is that managerial activity which is concerned with planning and controlling of firms financial resources. Financial management is concerned with rising of funds and their effective utilization keeping in view the overall objective of the firm financial management is one of the four important functional areas of the management. The major objective of any business field of a firm is to make a profit for its owners by producing goods or services for sale in the market. To reach the goal, the firm purchases the various factors of production and produces the output in cell. The all process requires fund. Finance may be said in the circulatory system of economic body of the firm. Financial management is that administrative area or set of administrative functions, while related the arrangement of each and credit so that the organization have

the means to carryout is objectives as satisfactorily as possible. The central features is financial managements is its formulation of firms strategy in determining the most effective use of the funds, currently it the disposal the firm and is selected the most favorable sources of additional funds that the firm will need in the near future. To define financial management as an application of general management principles to the area of financial decision making in the word of Weston and Brigham. Financial management is an area of financial decision making harmonizing individual motives and enter prizes goal. Financial management in the modern sense of the term can be broken down into three major decisions as functions of finance. There are A. The investment decision B. The financing decision. C. The dividend policy decision Investment decision is broadly consigned with investment project of assets. The main idea is maximization of owners wealth. Decision is taken to maximize the benefits of equity share holders. Financial decision major second decision of the firm is the financial manager is concerned with determining the best management will decide how much funds should be provided from outside public and financial institutions. Divided decision every company after making profits it may distribute to its shareholders and it may retain therefore the top management decides how much is retained and distributed to equity shareholders. These earnings are called earning avail to equity shareholders. It can meet future expenses and programs it can construct new project without getting investment funds. These earnings can be retained or distributed t equity shareholders.

MEANING Financial management is an organizational activity that is concerned with the financial resources. In common parlance is derived as providing monitory resource at the time they are required. But financial management covers the mobilization and effective utilization of funds. DEFINITION OF FINANCIAL MANAGEMENT Financial management is defined as the business activity which is concerned with the acquisition and conservation of capital funds in meeting the financial needs and over all objectives of business enterprise. -------------- WHEELER --------------------------

Financing consists in the raising, providing & managing all the money, capital (or) funds of any kind to be used in connection with the business. ------------------ BONNEVILLE & PEWEY -----NATURE OF FINANCIAL MANAGEMENT Financial management is that managerial activity which is concerned with the planning and controlling of firms financial resources. As a separate activity or discipline it is of recent origin it was a branch of economics till 1980. Still today it has no unique body of knowledge of its own, and it draws heavily on economics for its theoretical concepts The subjects of financial management are of immerse interest to both academicians and practicing managers. It is of great interest to academicians because the subject is still developing, and there are still certain areas where controversies exist for which no unanimous solutions have been reaching as yet. Practicing managers are interested in this subject because among the most crucial decisions of the firms are those which relate to finance and an understanding of the financial management provides them with conceptual and an understanding of the theory of financial management provides them with conceptual and analytical insights to make those decisions skillfully. SCOPE OF FINANCIAL MANAGEMENT Sound financial management is essential in all types of organizations whether it be profit or non-profit. Financial management is essential in a planned economy as well as in a capitalist set-up as it involves efficient use of the resources. From time to time it is observed that many firms have been liquidated not because their technology was obsolete or because their products were not in demand or their labour was not skilled and motivated, but that there is a Mis-management of financial affairs. Even in a boom period, when a company make high profits there is also a fear of liquidation because of bad financial management Financial management the out put from the given input of funds. In a country like India where resources are scarce and the demand for the funds are many, the need of proper financial management is required in case of newly started companies with a high growth rate. So, it is more important to have sound financial management. FINANCIAL GOAL: PROFIT VS. WEALTH The firms investment and financing decision are unavoidable and continuous. In order to make them rationally, the firm must have a goal. It is generally

agreed in theory that the financial goal of the firm should be the maximization of owners economic welfare could be maximized by maximizing the shareholders wealth as reflected in the market value of the shares. In this selection, we show that the Shareholders wealth maximization (SWM) is theoretically logical and operationally feasible normative goal for guiding the financial decision making. PROFIT MAXIMIZATION The objective of financial management is the same as the objective of the company which is to earn profit. But profit maximization alone cannot be the sole objective of the company. It is a limited. The term profit is vague and it involves much more contradiction. WEALTH MAXIMIZATION It is commonly understood that the objective of a firm is to maximize value and wealth. The value of a firm is represented by the market price of the companies of the stock. The market prices of a firms stock represent the assessment of all market participants as to what the value of the particular firm is. It takes in to account present and prospective future earnings per the timing and risk of these earning, the dividend policy of the firm and many other factors that bear upon the market price of the stock.

NEED OF FINANCIAL MANAGEMENT

It assists in the assessment of financial needs internal and external resources for meeting them. It assesses the efficiency and effectiveness of financial institutions in mobilizing individual corporate savings. It also prescribes various means for such mobilizations of savings into desirable investment channels. It assists the management while investing the funds in profitable projects by analyzing the viability of that project through capital budget techniques. It permits the management to safe guards the interests of shareholders by utilizing the funds procured from different sources and it also regulates and controls the funds to get maximum use.

NEED OF THE STUDY Financial statements are the instruments to watch out the performance of the business enterprise. They highlight a managerial performance attesting managerial success or failure and the flashing signals of impending difficulties. Calculations of compound annualized returns are a technique of analyzing the financial information contained in the annualized fact sheet INTRODUCTION TO MUTUAL FUNDS

An open fund operated by investment company/trust which raises money from shareholders /unit holders and invests in a group of assets, in accordance with a stated set of objectives. Mutual funds raise money by selling shares/units of the fund to the public, much like any other type of company can sell stock in itself to the public. Mutual funds then take the money they receive from the sale of their shares/units (along with any money made from previous investments) and use it to purchase various investment vehicles, such as stocks, bonds and money market instruments. In return for the money they give to the fund when purchasing shares/units, share holders/unit holders receive an position in the fund and, in effect, in each of its underlying securities. For most mutual funds, shareholders /unit holders are free to sell their shares/units at any time, although the price of a share /unit in a mutual fund will fluctuate daily, depending upon the performance of the securities held by the fund. Share holders/unit holders who invest in a fund each own a representative portion of those investments, less any expenses charged by the fund. Mutual fund investors make money either by receiving dividends and interest from their investments, or by the rise in value of the securities. Dividends, interest and profits from the sale of any securities /units (capital gains) are passed on to the shareholders in the form of distributions. And shareholders/ unit holders generally are allowed to sell (redeem) their shares/units at any time for the closing market price of the fund on that day

MUTUAL FUND SCHEME TYPES

Equity Diversified Schemes These schemes mainly invest in equity. They seek to achieve long-term capital appreciation by responding to the dynamically changing Indian economy by moving across sectors such as lifestyle, Pharma, cyclical, technology etc..

Sector Schemes These Schemes focus on particular sector such as IT, Banking, Reality, Natural Resources etc. They seek to generate long-term capital appreciation by investing in equity and related securities of companies in that particular sector. Index Schemes These Schemes aims to provide returns that closely correspond to the return of a particular stock market index such as BSE Sensex , NSE Nifty, etc. Such Schemes invest in all the stocks comprising the index in approximately the same weight age as they are given in that index. Exchange Traded Funds (ETFs) ETFs invest in stocks underlying a particular stock index like NSE Nifty or BSE Sensex. They are similar to an index fund with one crucial difference. ETFs are listed and traded

on a stock exchange. In contrast, an index fund is bought and sold by the fund and its distributors. Equity Linked Saving Schemes (ELSS) These work on similar lines as diversified equity funds and seek to achieve long-term capital appreciation by investing in the entire universe of stocks. The only difference between these funds and equity-diversified funds is that they demand a lock-in of 3 years to gain tax benefits under section 80c. Dynamic funds These Schemes alter their exposure to different asset classes based on the market scenario. Such funds typically try to book profits when the markets are overvalued and remain fully invested in equities when the markets are undervalued. This is suitable for investors who find it difficult to decide when to quit from equity. Balanced Schemes These Schemes seek to achieve long-term capital appreciation with stability of investment and current income from a balanced portfolio of high quality equity and fixed income securities. These schemes are risk profile is medium. Medium-Term Debt Schemes These Schemes have a portfolio of debt and money market instruments where the average maturity of the underlying portfolio is in the range of one to two years. Short-Term Debt Schemes These schemes have a portfolio of debt and money market instruments. Where the average maturity of the underlying portfolio is in the range of one to two years. Money Market Debt Schemes These Schemes invest in debt securities of a short-term nature, which generally means securities of less than one-year maturity. The typical short-term interest-bearing instruments these funds invest in Treasury Bills, Certificate of Deposit, Commercial Paper and inter-bank call money market. Short-Term Gilt Schemes These Schemes invest in government securities. The Securities invested in are of short to medium term maturities. Floating Rate Funds They invest in debt securities with floating interest rates, which are generally linked to some benchmark rate like MIBOR (Mumbai Inter Bank Offer Rate). Floating rate funds have a high relevance when interest rates are on the rise helping investors to ride the interest rate rise. INTRODUCTION TO PORTFOLIO MANAGEMENT

Investing in securities such as shares, debentures and bonds are profitable as well as exciting. It in deeds it involves a great deal of risk. It is rare to find investors investing their entire saving in a single security. Instead, they tend to invest in a group of securities. Such, group of securities is called as portfolio creation of a portfolio helps to reduce risk without sacrificing returns. WHAT IS PORTFOLIO MANAGEMENT An investor considering investment in securities is faced with the problem of choosing from among a large number of securities. His choice depends upon the risk-return characteristics of individual securities. He would attempt to choose the most desirable securities and like to allocate his funds over the group of securities. Again he is faced with the problem of deciding which securities to hold and how much to invest in each. The investors face an infinite number of possible portfolio or group of securities. The risk and return characteristics of portfolios defer from those of individual securities combining to form a portfolio. The investors try to choose the optimal portfolio taking into consideration the risk-return characteristics of all possible portfolios. As the economic and financial involvement keeps changing the risk-return characteristics of individual securities as well as portfolios also change. An investor invests his funds in a portfolio expecting to get a good return with less risk to bear. Portfolio management comprises all the processes involved in the creation and maintance of an investment portfolio. It deals specifically with security analysis, portfolio analysis, portfolio selection, portfolio revision and portfolio evaluation

SCOPE The Scope of the project is confined to the Mutual Fund Industry. Moreover it is confined to study of portfolio management of equity diversified funds. Which includes the observation of variability in sector allocation and asset mix parameters of the equity funds? And try to reveal how the equity funds able to sustain its return in various market conditions. OBJECTIVES OF THE PROJECT To study and understand the concept of MUTUAL FUNDS.

To study and understand the process of investing in Mutual Fund.

To study the fund performance of KOTAK MAHINDRA MUTUAL FUND LTD.

To analyze the returns of Mutual Fund schemes and the stock market Speculation.

To understand the role of an Asset Management Company in managing the different equity diversified funds.

To study the relative asset mix and sector allocation of equity funds in monthly portfolios which ultimately drive the fund to wards achieving investment objective.

LIMITATIONS OF THE PROJECT Considerable information has been extracted from the Reliable sources and documents provided by the company. If any incorrect information is furnished in these documents, the same will be carried forward in this project work.

This analysis is made on the basis of primary and secondary data.

Although there are number of schemes available in the market more emphasizes given to equity diversified funds.

This study has been limited to the information which is willingly shared by the authorities of Kotak Mahindra Asset Management limited.

The findings of this study cannot be generalized for all the equity diversified funds as every fund has its own fund

METHODOLOGY Methodology is an intensive and purposeful search for knowledge and for the understanding social and physical phenomenon. It is the method for the discovery of true values in a scientific way. There are two sources of data.

1. 2.

Primary sources and Secondary sources

PRIMARY DATA The primary data is collected from the discussion with the functional managers, officers, staff and other members of the organization. Primary data is the data, which has been collected directly from the people of the organization. It is also called as first hand data. SECONDARY DATA The secondary data is obtained from Annual report financial statements i.e. balance sheet and profit and loss accounts reports, journals and other informational journals of the organization and from the text books of financial management. The secondary data are those which have been already collected by some agency arid which have been processed. However in the study all the theoretical informations obtained from primary data and all information is obtained from KOTAK MAHINDRA MUTUAL LTD.

PLAN OF THE STUDY

Chapter 1:

Deals with introduction, nature of financial management, scope of

financial management, need of financial management, objectives, need of the study, methodology, limitations, plan of the study & period of the study.

Chapter 2:

Deals with industry profile & company profile.

Chapter 3:

Deals with Theoretical frame work of mutual funds.

Chapter 4:

Deals with Data analysis consisting of mutual funds.

Chapter 5:

Deals with findings & suggestions.

PERIOD OF THE STUDY The data taken from since inception of the company are taken into consideration as the period of the study in this project. My study in the company was between 25-05-2010 to 24-07-2010

CHAPTER II INDUSTRY PROFILE

INDUSTRY PROFILE
Mutual Fund Industry in India

The Evolution
The formation of Unit Trust of India marked the evolution of the Indian mutual fund industry in the year 1963. The primary objective at that time was to attract the small investors and it was made possible through the collective efforts of the Government of India and the Reserve Bank of India. The history of mutual fund industry in India can be better understood divided into following phases: Phase 1. Establishment of Unit Trust of India - 1964-87: Unit Trust of India enjoyed complete monopoly when it was established in the year 1963 by an act of Parliament. UTI was set up by the Reserve Bank of India and it continued to operate under the regulatory control of the RBI until the two were de-linked in 1978 and the entire control was transferred in the hands of Industrial Development Bank of India (IDBI). UTI launched its first scheme in 1964, named as Unit Scheme 1964 (US-64), which attracted the largest number of investors in any single investment scheme over the years. UTI launched more innovative schemes in 1970s and 80s to suit the needs of different investors. It launched ULIP in 1971, six more schemes between 1981-84, Children's Gift Growth Fund and India Fund (India's first offshore fund) in 1986, Master share (Indias first equity diversified scheme) in 1987 and Monthly Income

Schemes (offering assured returns) during 1990s. By the end of 1987, UTI's assets under management grew ten times to Rs 6700 cores. Phase II. Entry of Public Sector Funds - 1987-1993: The Indian mutual fund industry witnessed a number of public sector players entering the market in the year 1987. In November 1987, SBI Mutual Fund from the State Bank of India became the first non-UTI mutual fund in India. SBI Mutual Fund was later followed by Canara bank Mutual Fund, LIC Mutual Fund, Indian Bank Mutual Fund, Bank of India Mutual Fund, GIC Mutual Fund and PNB Mutual Fund. By 1993, the assets under management of the industry increased seven times to Rs. 47,004 cores. However, UTI remained to be the leader with about 80% market share. Amount Mobilized 11,057 1,964 13,021 Assets Under Mobilization as % of gross Domestic Savings 5.2% 0.9% 6.1%

1992-93

Management 38,247 8,757 47,004

UTI Public Sector Total

Phase III. Emergence of Private Sector Funds - 1993-96: The permission given to private sector funds including foreign fund management companies (most of them entering through joint ventures with Indian promoters) to enter the mutual fund industry in 1993, provided a wide range of choice to investors and more competition in the industry. Private funds introduced innovative products, investment techniques and investor-servicing technology. By 1994-95, about 11 private sector funds had launched their schemes. Phase IV. Growth and SEBI Regulation - 1996-2004: The mutual fund industry witnessed robust growth and stricter regulation from the SEBI after the year 1996. The mobilization of funds and the number of players operating in the industry reached new heights as investors started showing more interest in mutual funds. Investors' interests were safeguarded by SEBI and the Government

offered tax benefits to the investors in order to encourage them. SEBI (Mutual Funds) Regulations, 1996 was introduced by SEBI that set uniform standards for all mutual funds in India. The Union Budget in 1999 exempted all dividend incomes in the hands of investors from income tax. Various Investor Awareness Programmes were launched during this phase, both by SEBI and AMFI, with an objective to educate investors and make them informed about the mutual fund industry. In February 2003, the UTI Act was repealed and UTI was stripped of its Special legal status as a trust formed by an Act of Parliament. The primary objective behind this was to bring all mutual fund players on the same level. UTI was re-organized into two parts: 1. The Specified Under Taking; 2.TheUTIMutualFund Presently Unit Trust of India operates under the name of UTI Mutual Fund and its past schemes (like US-64, Assured Return Schemes) are being gradually wound up. However, UTI Mutual Fund is still the largest player in the industry. In 1999, there was a significant growth in mobilization of funds from investors and assets under management which is supported by the following data:

GROSS FUND MOBILISATION (RS. CRORES) PUB FROM T O U TI LIC SECT OR 31 01-April-98 M arc h99 31 01-April-99 M arc h00 31 01-April-00 M arc h01 31 01-April-01 M arc h02 31 01-April-02 Ja n03 31 M 7,259 5, 50 5 22,92 3 2,20,5 51 2,48,979 4, 64 3 13,61 3 1,46,2 67 12 ,4 13 6,192 74,352 92,957 13 ,5 36 4,039 42,173 59,748 11 ,6 79 1,732 7,966 21,377 PRIV ATE SECT OR TOTAL

1,64,523

ASSETS UNDER MANAGEMENT (RS. CRORES) U AS ON T I 53,32 0 PUBLI C SECTO R 8,292 PRIVAT E SECTO R 6,860 68,472 TOTAL

31-March-99

Phase V. Growth and Consolidation - 2004 Onwards: The industry has also witnessed several mergers and acquisitions recently, examples of which are acquisition of schemes of Alliance Mutual Fund by Birla Sun Life, Sun F&C Mutual Fund and PNB Mutual Fund by Principal Mutual Fund. Simultaneously, more international mutual fund players have entered India like Fidelity, Franklin Templeton Mutual Fund etc. There were 29 funds as at the end of March 2006. This is a continuing phase of growth of the industry through consolidation and entry of new international and private sector players.

PERFORMANCE OF MUTUAL FUNDS IN INDIA The performance of mutual funds in India in the initial phase was not even closer to satisfactory level. People rarely understood and of course investing was out of question. But some 24 million shareholders were accustomed with guaranteed high returns by the beginning of liberalization of the industry in 1992. This good record of UTI became marketing tool for new entrants. The expectations of investors touched the

sky in profitability factor. However, people were miles away from the preparedness of risks after the liberalization. The Net Asset Value of mutual funds in India declined when stock prices started falling in the year 1992. Those days, the market regulations did not allow portfolio shifts into alternative investments. There were rather no choices apart from holding the cash or to further continue investing in shares. One more thing to be noted, since only closed-end funds were floated in the market, the investors disinvested by selling at a loss in the secondary market. The performance of mutual funds in India suffered qualitatively. Partly owing to a relatively weak stock market performance, mutual funds have not yet recovered, with funds trading at an average discount of 1020 percent of their net asset value. The supervisory authority adopted a set of measures to create a transparent and competitive environment in mutual funds. Some of them were like relaxing investment restrictions into the market, introduction of open-ended funds, and paving the gateway for mutual funds to launch pension schemes. The measure was taken to make mutual funds the key instrument for long-term saving. The more the variety offered, the quantitative will be investors.

ORGANISATION OF A MUTUAL FUND: There are many entities involved and the diagram below illustrates the organizational set up of a mutual fund:

Mutual Funds diversify their risk by holding a portfolio of instead of only one asset. This is because by holding all your money in just one asset, the entire fortunes of your portfolio depend on this one asset. By creating a portfolio of a variety of assets, this risk is substantially reduced. Mutual fund investments are not totally risk free. In fact, investing in mutual funds contains the same risk as investing in the markets, the only difference being that due to professional management of funds the controllable risks are substantially reduced. A very important risk involved in mutual fund investments is the market risk. When the market is in doldrums, most of the equity funds will also experience a downturn. However, the company specific risks are largely eliminated due to professional fund management. All mutual funds comprise four constituents, Sponsor, Trustees, Assets Management Company (AMC) and Custodians.

Sponsors
The sponsors initiate the idea to set up a mutual fund. It could be a registered company, scheduled bank or financial institution. A sponsor has to satisfy certain conditions, such as capital, record (at least five years operation in financial services), default free dealings and general reputation of fairness. The sponsors appoint the Trustee, AMC and Custodian. Once the AMC is formed, the sponsor is just a stakeholder.

Trust/ Board of Trustees

Trustees hold a fiduciary responsibility towards unit holders by protecting their interests. Trustees float and market schemes, and secure necessary approvals. They check if the AMCs investments are within well-defined limits, whether the funds assets are protected, and also ensure that unit holders get their due returns. They also review any due diligence by the AMC. For major decisions concerning the fund, they have to take the unit holders consent. They submit reports every six months to SEBI; investors get an annual report. Trustees are paid annually out of the funds assets - 0.5 percent of the weekly net asset value.

Fund Managers/ AMC

They are the ones who manage money of the investors. An AMC takes decisions, compensates investors through dividends, maintains proper accounting and information for pricing of units, calculates the NAV, and provides information on listed schemes. It also exercises due diligence on investments, and submits quarterly reports to the trustees. A funds AMC can neither act for any other fund nor undertake any business other than asset management. Its net worth should not fall below RS.10 crore. And, its fee should not exceed 1.25 percent if collections are below Rs. 100 crore and 1 percent if collections are above Rs. 100 crore. SEBI can pull up an AMC if it deviates from its prescribed role.

Custodian
Often an independent organization, it takes custody of securities and other assets of mutual fund. Its responsibilities include receipt and delivery of securities, collecting income-distributing dividends, safekeeping of the units and segregating assets and settlements between schemes. Their charges range between 0.15-0.2 percent of the net value of the holding. Custodians can service more than one fund.

LIST OF MUTUAL FUND COMPANIES

01.AIG Global Investment Group Mutual Fund 02. Axis Mutual Fund 03. AEGON mutual Fund 04. Alliance Mutual fund 05. Baroda Pioneer Mutual Fund 06. Benchmark Mutual Fund 07. Bharti AXA Mutual Fund 08. Birla Sun Life Mutual Fund 09. Canara Robeco Mutual Fund 10.. L & T Mutual Fund 11. Deutsche Mutual Fund 12. DSP Blackrock Mutual Fund 13. Edelweiss Mutual Fund 14. Escorts Mutual Fund 15. Fidelity Mutual Fund 16. Fortis Mutual Fund 17. Franklin Templeton Mutual Fund 18. GIC Mutual fund

19. Goldman Sachs Mutual Fund 20. HDFC Mutual Fund 21. HSBC Mutual Fund 22. ICICI Prudential Mutual Fund 23. IDBI Mutual Fund 24. IDFC Mutual Fund 25. IL&F S Mutual Fund 26. ING Mutual Fund 27. JM Financial Mutual Fund 28. JPMorgan Mutual Fund 29. Kotak Mahindra Mutual Fund 30.. LIC Mutual Fund 31. Mirae Asset Mutual Fund 32. Morgan Stanley Mutual Fund 33. Motilal oswal Mutual Fund 34.. Principal Mutual Fund 35. Peerless Mutual Fund 36. Pramerica Mutual Fund

37. Quantum Mutual Fund 38. Reliance Mutual Fund 39. Religare Mutual Fund 40. Sahara Mutual Fund 41. SBI Mutual Fund 42. Shinsei Mutual Fund 43.Standard Chartered Mutual Fund 44.Sun F&C Mutual Fund 45. Sundaram BNP Paribas Mutual Fund 46. Tata Mutual Fund 47. Taurus Mutual Fund 48.UTI Mutual Fund

CHAPTER III COMPANY PROFILE

COMPANY PROFILE:

Established in 1985, The Kotak Mahindra group has long been one of Indias most reputed financial organizations. In February 2003,Kotak Mahindra Finance Ltd, the groups flagship company was given the license to carry on banking business by the Reserve Bank of India(RBI).This approval creates banking history since Kotak Mahindra Finance Ltd is the first company in India to convert to a bank. CORPORATE IDENTITY KOTAK SYMBOL

Kotak Mahindra is one of Indias leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporate The group has a net worth of around RS.5,997 crore and employs around 20,000 employees across its various business servicing around 5 million customer accounts through a distribution network of branches, franchisees, representative offices and satellite offices across 370 cities and towns in India and offices in New York, London, Dubai, Mauritius and, Singapore.

Group Companies

The Kotak Mahindra group provides individuals and investors a diverse range of financial services through its various group companies.

Kotak Mahindra Bank Limited

Established in 1985, The Kotak Mahindra group has long been one of Indias most reputed financial organizations. In February 2003, Kotak Mahindra Finance Ltd, the groups flagship company was given the license to carry on banking business by the Reserve Bank of India(RBI).This approval creates banking history since Kotak Mahindra Finance Ltd is the first company in India to convert to a bank.

Kotak Mahindra Asset Management Company Limited

Kotak Mahindra Asset Management Company Limited (KMAMC), a wholly owned subsidiary of KMBL, is the Asset Manager for Kotak Mahindra Mutual Fund (KMMF).KMAMC started operations in December 1998 and has over 10 lack investors in various schemes. KMMF offers schemes catering to investors with varying risk-return profiles and was the first fund houses in the country to launch a dedicated gilt scheme invest in only in government securities.

Kotak Mahindra old Mutual Life Insurance Ltd

Kotak Mahindra Old Mutual Life Insurance Ltd is a joint venture between Kotak Mahindra Bank Ltd (KMBL), and old mutual plc. At Kotak Life Insurance, we aim to help customers take important financial decisions at every stage in life by offering them a wide range of innovative life insurance products, to make them financially independent.

Kotak Mahindra prime limited

Kotak Mahindra prime limited (KMPL) is a subsidiary of Kotak Mahindra Bank Limited formed to finance all passenger vehicles. KMPL is Indias one of the largest nation wide dedicated car finance company. The company is dedicated to financing and supporting automotive manufacturers, dealers and retail customers. The company offers financing in the form of loans for the entire range of passenger cars, multi utility vehicles and pre-

owned cars. The Company also offers Inventory funding and infrastructure funding to car dealers and has strategic arrangement with various car manufactures in India for being their preferred financier.

Kotak securities Ltd

Kotak Securities Ltd. is Indias leading stock broking house with a market share of close to 5.9% as on 30th September 2008.Kotak Securities Ltd. Has been the largest in IPO distribution.

Kotak Securities Ltd-Institutional Equities

Kotak Securities Limited, a subsidiary of kotak Mahindra Bank, is the stock broking and distribution arm of the kotak Mahindra Group. The company was set up in 1994.Kotak Securities is a corporate member of both The Bombay Stock Exchange and the National Stock Exchange of India Limited. Its operations include stock broking and distribution of various financial products including private and secondary placement of debt and equity and mutual funds. Currently, kotak Securities is one of the largest broking houses in India with wide geographical reach.

Kotak Mahindra Capital Company (KMCC)

Kotak Mahindra Capital Company (KMCC) is a full-service premier investment bank in India offering a wide suite of capital market and advisory solutions to clients covering leading domestic and multinational corporations, banks, financial institutions and government companies across major industry sectors. Kotak Investment Banking offers the complete breadth and depth of advisory services-Equity and Debit Capital Markets, M&A Advisory, Structured Finance services, Financial Sponsors and Infrastructure Financing Advisory. KMCC has consistently ranked high on M&A and Equity league tables. In data ranked kotak #1 and Bloomberg placed kotak#3 in value of announced M&A transactions in India in 2007, while kotak was ranked the #1 Book Running Lead managers in Initial Public Offerings in FY08.

Kotak Private Equity Group (KPEG)

Kotak Private Equity Group (KPEG) is a specialist Private Equity arm of Kotak Mahindra Bank. We are a leading Private Equity Fund Manager Focused on helping emerging corporate and mid-size enterprises evolve into tomorrows industry leaders. KPEG provides these companies a combination of equity capital, strategic support and other value added services, playing a pro-active role with the entrepreneur in building the business.

Kotak Realty Fund

Kotak Realty Fund, established in May 2005, is one of Indias first private equity funds with a focus on real estate and real estate investment business. Kotak Realty Fund Operates as a venture Capital fund, under the SEBI Venture Capital Fund Regulations, 1996 in India. The Funds Corpus has been contributed by leading banks, domestic corporate, family offices and high net worth individuals. The fund is closed ended and has a life of seven years.

Kotak Achievements
The accolades that kotak Securities has been graced with include:

Best Brokerage Firm in India-Asiamoney,2008

Best Performing Equity Broker in India CNBC TV 18

Optima Financial Advisory Awards,2008

Best Brokerage Firm in India-Asiamoney,2007

The Leading Equity House In India-Thomson Extel

Surveys Awards,2007

Best provider of portfolio Management :Equities

Euro money Awards,2007

Avaya Global connect Customers Responsiveness Awards in

Financial Services Sector,2007

Kotak Mahindra Asset Management Company Limited (KMAMC)

KMAMC, A wholly owned subsidiary of KMBL, is the Asset Manager for Kotak Mahindra Mutual Fund (KMMF) .KMAMC Started operations in December 1998 and has over 10Lac investors in various schemes. KMMF offers schemes catering to investors with varying risk return profiles and was the First fund house in the country to launch a dedicated gilt scheme investing only in government securities. INFORMATION ABOUT SPONSOR, AMC AND TRUSTEE COMPANIES

A. Constitution of the Mutual Fund

Kotak Mahindra Mutual Fund (the Mutual Fund) has been constituted as a trust on may 20,1996,as amended up to date in accordance with the provisions of the Indian Trust Act,1882(2 of 1882) with Kotak Mahindra Bank Limited ,as the Sponsor and Kotak Mahindra Trustee Company Limited as the Trustee. The Trust Deed has been registered under the Indian Registration Act, 1908, by, the office of Sub-register of Assurances at Mumbai. The Mutual Fund was registered with SEBI on June 23, 1998 under Registration Code MF/038/98/1.

B.Sponsor

Kotak Mahindra Mutual Fund is sponsored by Kotak Mahindra Bank Limited. The Sponsor is the settler of the Mutual Fund Trust. The Sponsor has Contributed Rupees One Lakh as the initial Contribution to the corpus for the setting up of the Trust. The Sponsor has also contributed Rupees One Lakh Fifty Thousand as additional corpus.

About kotak Mahindra Bank

The erstwhile Sponsor Company, Kotak Mahindra Finance Limited (KMFL) was converted into Kotak Mahindra Bank Limited (Kotak Bank) in March 2003 after being granted a banking license by the Reserve Bank of India. Thus, the Sponsor of the Fund is kotak Bank. KMFL promoted by Mr.uday Pinto and Kotak & Co., was incorporated on November 21, 1985 under the name kotak Capital Management Finance Limited. In early 1986,the promoters were joined by Late Mr. Harish Mahindra and Mr.Anand G.Mahindras and the companys name was changed to kotak Mahindra Finance Limited. KMFL started with a capital base of Rs.30.88 Lakh. From being a provider of a single financial Product, KMFL grew substantially during the seventeen years of its existence into a highly diversified Financial Services company and has now converted into Bank. As on March 31, 2008, the net worth of kotak Bank is RS.3, 535.49 crore and combined with its subsidiaries, the group net Worth (before minority interest) is RS.5824 crore. There are over 92,200 shareholders of Kotak Bank .The Sponsor and its subsidiaries/associates offer wide ranging financial services such as loans, lease and hire purchase, consumer finance ,home loans, commercial vehicles and car finance ,investment banking, stock broking ,mutual Funds, primary market distribution of equity and debt products and life insurance. The Group has offices (including representative offices and franchise offices) in 370 Indian cities and also present internationally in Mauritius, San Francisco, London, Dubai, New York and Singapore. Kotak Mahindra (UK) Limited, a subsidiary of kotak Bank, is the first company owned from India to be registered with the financial Services Authority in UK. Kotak Mahindra old mutual Life Insurance Limited is a joint venture between Kotak Bank and old Mutual plc based in the UK and with large presence in South African insurance market. Some of the other subsidiaries of kotak Bank are Kotak

Investment Advisors Ltd formerly Known as (Kotak Mahindra Securities Limited) , kotak Mahindra prime Limited , Kotak Mahindra Limited ,kotak Mahindra trusteeship services limited (formerly known as kotak Mahindra private-Equity Trustee limited), Kotak Mahindra Investments Limited, Kotak Mahindra Inc., kotak fore Brokerage limited. The Sponsor has been consistently profitable and dividend paying company since inception. The Sponsor has vested the trustee functions in the Trustee. The Sponsor is represented by directors on the boards of the Trustee and the AMC in accordance with the Regulations. The Sponsor is neither responsible nor liable for any loss resulting from the operations of the Schemes.

C. The Trustee
Kotak Mahindra Trustee Company Limited (the Trustee), through its Board of Directors, Shall discharge its obligations as trustee of kotak Mahindra Mutual Fund. The Trustee ensures that the transactions entered into by the AMC are in Accordance with the SEBI Regulations and will also review the activities carried on by the AMC.

Directors on the Board of Trustee Company:

Mr. Amit Desai is a graduate in Commerce and Law from the Bombay University. He is an advocate and has about 20 years of experience in criminal, economic and revenue laws. Mr. Desai is associated with the Sponsor. Mr. Girish Sharedalal is a graduate in Commerce and Arts and also a Fellow of the Institute of Chartered Accountants of India. Formerly a Senior Partner of Messrs Dalal, Desai and Kumana, a firm of Chartered Accountants, he has about 44 years of experience in the field of audit, taxation and management consultancy action and management consultancy Mr. Anirudha Barwe is a postgraduate in Mathematics and also a Certified Associate of Indian Institute of Bankers, Mumbai. Mr. Barwe has about 43 years of experience in the field of banking and financial services. Mr. Barwe was actively associated with and

responsible to a great extent for the success of the Resurgent India Bond issue of SBI. Mr. Barwe retired as the Managing Director of SBI Capital Markets Limited in October 1998. After retirement, Mr. Barwe worked with IDFC as Chief Financial Officer for 3 years. Mr. Chandrashekhar Sathe is a graduate with B. Tech. (Chemical Engineering) from IIT, Mumbai. He has over 27 years' experience in Banking and Finance. He has been a part of the Senior Management team of the Kotak Mahindra Group since 1992 and was responsible for setting up the Fixed Income Securities capability of Kotak Mahindra Capital Company. Prior to Kotak Mahindra, he was with the Bank of Nova Scotia and Bank of Maharashtra and has wide ranging experience in Banking, Finance, Administration, Credit, Foreign Exchange and Money Markets. Mr. Sathe is a widely consulted expert on Foreign Exchange and Money Markets in India and is a frequent contributor to financial newspapers, magazines and TV News channels. Mr. Sathe was the Chief Executive Officer of the AMC for the period, 1st April, 1998 to 30th November, 2001 and currently heads the Risk Management function at Kotak Mahindra Bank Limited. Mr. Sathe is associated with the Sponsor. Mr. Balan Wasudeo has over 36 years experience in the areas of Treasury, Finance, Projects, Strategic Planning, Risk Management and General Management. His significant achievements include financing large organic and inorganic growth through various debt and capital market instruments in India and abroad. Mr. Balan's career spans a unique combination of Multinational Companies, Public Sector Company and Family Owned Companies. Mr. Balan Wasudeo is the Founder of Neo CFO, an organization offering services of an Independent Director to Companies. Prior to that, Mr. Balan Wasudeo was Chief Financial Officer of Great Eastern Shipping Company Ltd. Mr. Balan Wasudeo has also received the Best Performing CFO Award in Logistics Sector from CNBC TV18 in 2006 management consultancy

2. Rights, Obligations, Responsibilities and Duties of the Trustee:

Pursuant to the Trust Deed constituting the Fund and in terms of the Regulations, the rights and obligations of the Trustee (Kotak Mahindra Trustee Company Limited) are as under: The Trustee has the legal ownership of the Trust Fund. The Superintendence and management of the Trust and all powers incidental to the purpose of the trust vest absolutely in the Trustee subject to the Trust Deed. The Trustee Shall take into its custody or under its control all the capital and property of every scheme of the Mutual Fund and hold it in trust for the Unit holders of the Scheme The Trustee is Entitled to delegate any power and/or responsibility vested in it to the kotak Mahindra Asset Management Company (AMC) ,which is accountable to the Trustee and bound to carry out the functions assigned to it from time to time .Not with Standing any such delegation, the Trustee Company is at all times responsible for the acts of negligence or acts of omission and commission of the AMC The Trustee shall ensure that the AMC and the Custodian duly fulfill the functions respectively assigned to them under the Securities and Exchange Board of India Regulations. The Trustee shall ensure before the launch of any Scheme that the Asset Management Company has :1. Systems in place for its back office, dealing room and Accounting; 2. Appointed all key personnel including fund manager(s) for the Scheme and submitted to the Trustee their resume Containing Particulars of their educational qualifications and past experience in the Securities market within fifteen Containing particulars of their educational qualifications and Past experience in the Securities market with in fifteen

Days of their appointment; Appointed auditors to audit the accounts of the Scheme Appointed a compliance of the SEBI Act, rules and Regulations, notifications, guidelines, instructions, etc. issued by SEBI or the Central Government and for redressal of investors grievances;

D. Asset Management Company

Kotak Mahindra Asset Management Company Limited (AMC) is a limited company incorporated under the companies Act,1956 on August 2,1994, having its Registered office at 5A, 5th floor, Bakhtawar, Nariman Point,Mumbai-400021.AMC has been appointed as the Asset Management Company of the Mutual Fund by the Trustee vide Investment Management Agreement (IMA) dated May 20,1996,as amented up to date, and executed between the Trustee and the AMC. The AMC is a wholly owned subsidiary of the Sponsor, Kotak Bank. An Approval by the Division of Funds, Investment Management Department under the SEBI (portfolio manager) Regulations,1993 and Mutual Funds Division of SEBI under the SEBI(Mutual Funds) Regulations,1996,has been granted to the AMC for undertaking portfolio Management Service (PMS).There is no conflict of interest between the Mutual Fund and the PMS activity.

Directors on the Board of AMC

Mr. Uday S. Kotak, 46, is a graduate in Commerce and a post-graduate in Business Administration from Jamnalal Bajaj Institute of Management Studies of Mumbai University. Mr. Kotak has over 18 years of experience in the financial services industry. Mr. Kotak is the Vice Chairman and Managing Director of the Promoter, and the chairman of various other companies. Mr. R. C. Khanna, 79, is a graduate in Commerce from London University, Fellow of the Institute of Chartered Accountants of England & Wales, Fellow of the Institute of Chartered Accountants of India, Associate of the Chartered Institute of Management

Accountants, London and Associate of the Institute of Cost and Works Accountants of India. He was a partner till 31st March 1998 in A. F. Ferguson & Co., a firm of Chartered Accountants. Mr. Khanna has over 54 years of experience in Audit, Taxation, Finance and other related areas. Mr. Sukant S. Kelkar, 66, is a post-graduate in commerce. He has about 40 years of experience in finance, capital markets, and related areas. Mr. Kelkar has over 10 years experience in the Bank of India, and has even been a foreign exchange dealer in London for 3 years during this tenure. Following this, Mr. Kelkar worked with Bombay Dyeing Manufacturing Company Limited for 31 years, finally retiringas Executive Director in July 2001 Mr. Chengalath Jayaram, 48, holds a postgraduate diploma in Management from IIM, Calcutta, and has over 25 years' experience in the field of Finance. Mr. C. Jayaram began his career nearly two decades ago in the Financial Services industry. He joined the Kotak Mahindra Group in 1990, before which he had worked with several renowned organizations such as ICICI Limited and A. F. Fergusons. At Kotak Mahindra, besides being instrumental in setting up the car finance business, he was also responsible for the distribution business, which was then called FICOM. During the period 1990 to 1995, he was responsible for the businesses of financing against shares and proprietary investments. From 1995 to 1999, he was the Managing Director of Kotak Securities Limited and currently he is the Executive Director of Kotak Bank.

Mr. Gaurang Shah, 48 years / Member of The Institute of Chartered Accountants of India, Member of The Institute of Cost and Work Accountants of India, Member of The Institute of Company Secretaries of India. M. Com. from Gujarat University.

Mr. Gaurang Shah is the Group Head - Asset Management and Life Insurance at Kotak Mahindra Group and is responsible for Domestic and International Asset Management and Life Insurance businesses of the Group. In his immediate prior

assignment, he was the Managing Director of Kotak Mahindra Old Mutual Life Insurance Limited, (a 74:26 joint venture between Kotak Mahindra Bank Ltd., its affiliates and Old Mutual plc) among Indias leading Life Insurance

AWARDS
OUT LOOK MONEY NDTV PROFIT AWARDS

ICRA AWARDS,2009

NDTV AWARDS,2006

LIPPER FUND AWARDS,2006

ICRA AWARDS,2006

ICRA MFR1

OUTLOOK MONEY BEST WEALTH CREATOR DEBT 2003

CRISIL BEST FUND AWARD 2003

KOTAK MUTUAL FUND WINS ACCOLADES

CHAPTER IV THEORITICAL FRAME WORK

INRODUCTION
A mutual fund is a trust that pools the savings of a number of Investors who share a common financial goal. The money thus Collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.

A Mutual Fund is body corporate registered with the Securities and Exchange Board of India (SEBI) that pools up the Money from individual/corporate investors and invests the same on behalf of the investors/unit holders, in equity shares, Government securities, bonds, call money markets etc, and distributes the profits. In the other words, a Mutual Fund allows investors to indirectly take a Position in a basket of assets. 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. Investments in securities are spread among a wide cross-section of Industries and sectors thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at same time. Investors of mutual funds are known as unit holders. The investors in proportion to their investments share the profits of losses. The mutual funds normally come out with a number of schemes with different investment objectives which are launched from time to time. A Mutual Fund is required to be

registered with Securities Exchange Board of India (SEBI) which regulates securities markets before it can collect funds from the public.

Types of Mutual fund schemes BY STRUCTURE 1. Open - Ended Schemes

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.

2. Close - Ended Schemes

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

3. Interval Schemes
Interval Schemes are that scheme, which combines the features of openended and close-ended schemes. The units may be traded on the stock exchange or may be open for sale or redemption during pre-determined intervals at NAV related prices.

BY INVESTMENT OBJECTIVE 1. Growth Schemes

Growth Schemes are also known as equity schemes. The aim of these schemes is to provide capital appreciation over medium to long term. These schemes normally invest a major part of their fund in equities and are willing to bear short-term decline in value for possible future appreciation.

2. Income Schemes
Income Schemes are also known as debt schemes. The aim of these schemes is to provide regular and steady income to investors. These schemes generally invest in fixed income securities such as bonds and corporate debentures. Capital appreciation in such schemes may be limited.

3. Balanced Schemes
Balanced Schemes aim to provide both growth and income by periodically distributing a part of the income and capital gains they earn. These schemes invest in both shares and fixed income securities.

4. Money Market Schemes

Money Market Schemes aim to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer, short-term instruments, such as treasury bills, certificates of deposit, commercial paper and inter-bank call money.

OTHER SCHEMES 1. Tax Saving Schemes

Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from time to time. Under Sec.88 of the Income Tax Act, contributions made to any Equity Linked Savings Scheme (ELSS) are eligible for rebate.

2. Special Schemes a. Index Schemes

Index schemes attempt to replicate the performance of a particular index such as the BSE Sense or the NSE 50. The portfolio of these schemes will consist of only those stocks that constitute the index.

b. 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.

NET ASSET VALUE (NAV)

When a Mutual Fund Scheme is first offered to the public, the offer price is usually Rs.10 per unit. After the amount raised is invested, the total funds under the control of the Mutual Fund increases or decreases depending upon the fluctuation in the market value of the investments. As a result, this Rs.10 per unit becomes higher or lower. This is the NAV or the market value of each unit of the scheme. This is explained with an example:

Initial amount collected by the Mutual fund Number of initial units issued, taking Rs.10 per unit as the initial value per unit

Rs.100 Crores Rs.10 Crores

This initial amount is now invested and the market value Rs.110 Crores goes up to Taking the initial number of units (i.e. 10 Crores divided Rs.11 by 10 core units.) (rs.110

Crores divided by 10 crore units.)

Rs.11 is the NAV of each unit.

FREQUENTLY USED TERMS Net Asset Value (NAV)

Net Asset value is the market value of the assets of the scheme minus its liability unit NAV is the net asset value of the scheme divided by the number of units outs the valuation date.

Sale Price
It is the price to pay when invests in a scheme. Also called Offer Price. It may sales load.

Repurchase Price
It is the price at which units under open-ended schemes are repurchased by the Mutual Funds such prices are NAV related.

Redemption Price
It is the price at which close-ended schemes redeem their units on maturity. Such are NAV related.

Sales Load
It is a charge collected by a scheme when it sells the units. Also called, Front-end Schemes that do not charge a load are called No Load schemes.

Repurchase or Back-end Load

It is a charge collected by a scheme when it buys back the units from the unit holders.

Benefits of Mutual Funds

There are numerous benefits of investing in mutual funds and one of the key reasons for its phenomenal success in the developed markets like US and UK is the range of benefits they offer, which are unmatched by most other investment avenues. We have explained the key benefits in this section. The benefits have been broadly split into universal benefits, applicable to all schemes and benefits applicable specifically to open-ended schemes

Universal Benefits Affordability

A mutual fund invests in a portfolio of assets, i.e. bonds, shares, etc. depending upon the investment objective of the scheme. An investor can buy in to a portfolio of equities, which would otherwise be extremely expensive. Each unit holder thus gets an exposure to such portfolios with an investment as modest as Rs.500/-. This amount today would get you less than quarter of an Infosys share! Thus it would be affordable for an investor to build a portfolio of investments through a mutual fund rather than investing directly in the stock market.

Diversification
The nuclear weapon in your arsenal for your fight against Risk. It simply means that you must spread your investment across different securities (stocks, bonds, money market instruments, real estate, fixed deposits etc.) and different sectors (auto, textile, information technology etc.). This kind of a diversification may add to the stability of your returns, for example during one period of time equities might underperform but bonds and money market instruments might do well enough to offset the effect of a slump in the equity markets. Similarly the information technology sector might be faring poorly but the auto and textile sectors might do well and may protect your principal investment as well as help you meet your return objectives.

Variety
Mutual funds offer a tremendous variety of schemes. This variety is beneficial in two ways: first, it offers different types of schemes to investors with different needs and risk appetites; secondly, it offers an opportunity to an investor to invest sums across a variety of schemes, both debt and equity. For example, an investor can invest his money in a Growth Fund (equity scheme) and Income Fund (debt scheme) depending on his risk appetite and thus create a balanced portfolio easily or simply just buy a Balanced Scheme.

Professional Management
Qualified investment professionals who seek to maximize returns and minimize

risk monitor investor's money. When you buy in to a mutual fund, you are handing your money to an investment professional that has experience in making investment decisions. It is the Fund Manager's job to (a) find the best securities for the fund, given the fund's stated investment objectives; and (b) keep track of investments and changes in market conditions and adjust the mix of the portfolio, as and when required.

Tax Benefits
Any income distributed after March 31, 2002 will be subject to tax in the assessment of all Unit holders. However, as a measure of concession to Unit holders of open-ended equity-oriented funds, income distributions for the year ending March 31, 2003, will be taxed at a concessional rate of 10.5% In case of Individuals and Hindu Undivided Families a deduction upto Rs. 9,000 from the Total Income will be admissible in respect of income from investments specified in Section 80L, including income from Units of the Mutual Fund. Units of the schemes are not subject to Wealth-Tax and Gift-Tax.

Regulations
Securities Exchange Board of India (SEBI), the mutual funds regulator has clearly defined rules, which govern mutual funds. These rules relate to the formation, administration and management of mutual funds and also prescribe disclosure and accounting requirements. Such a high level of regulation seeks to protect the interest of investors

Benefits of Open-ended Schemes Liquidity

In open-ended mutual funds, you can redeem all or part of your units any time you wish. Some schemes do have a lock-in period where an investor cannot return the units until the completion of such a lock-in period.

Convenience
An investor can purchase or sell fund units directly from a fund, through a broker or a financial planner. The investor may opt for a Systematic Investment Plan (SIP) or a Systematic Withdrawal Advantage Plan (SWAP). In addition to this an investor receives account statements and portfolios of the schemes.

Flexibility
Mutual Funds offering multiple schemes allow investors to switch easily between various schemes. This flexibility gives the investor a convenient way to change the mix of his portfolio over time.

Transparency
Open-ended mutual funds disclose their Net Asset Value (NAV) daily and the entire portfolio monthly. This level of transparency, where the investor himself sees the underlying assets bought with his money, is unmatched by any other financial instrument. Thus the investor is in the know of the quality of the portfolio and can invest further or redeem depending on the kind of the portfolio that has been constructed by the investment manager. DISADVANTAGES While the benefits of investing through mutual funds far outweigh the disadvantages, an investor and his advisor will do well to be aware of a few shortcomings of using the mutual fund as an investment vehicle. 1. NO CONTROL OVER COSTS An investor in a mutual fund has no control over the over all cost of investing. He pays investment management fees as long as he remains with the fund, albeit, in return for the professional management and research. Fees are usually payable as a percentage of the value of his investments, whether the fund value rising or decline. 2. NO TAILOR-MADE PORTFOLIOS Investors who invest on their own can build their own portfolios of shares, bonds and other securities. Investing through funds means he delegates this decision to the fund managers. High-net-worth individuals or large corporate investors may find this to be a constraint in achieve their objectives. 3. MANAGING A PORTFOLIO OF FUNDS Availability of a large number of options from mutual funds can actually mean too much choice of the investors. He may again need advice on how to select a fund to achieves his objectives.

RISKS ASSOCIATED WITH MUTUAL FUNDS MARKET RISK

Market risk relates to the market value of a security in the future. Market prices fluctuate and are susceptible to economic and financial trends, supply and demand, and many other factors that cannot be precisely predicted or controlled.

POLITICAL RISK
Changes in the tax laws, trade regulations, administered prices etc, are some of the many political factors that create market risk. Although collectively, as citizens, we have indirect control through the power of our vote individually, as investors, we have virtually no control.

INFLATION RISK
Interest rate risk relates to future changes in interest rates. For instance, if an investor invests in a long-term debt Mutual Fund scheme and interest rates increase, the NAV of the scheme will fall because the scheme will be end up holding debt offering lower interest rates.

INVESTMENT PHILOSOPHY Equity

The overall investment philosophy stems from our objective of delivering superior risk adjusted returns to investors over an extended time frame. The investment philosophy is rooted in a set of well established but flexible principles that relies extensively on fundamental research. It is driven by the belief that over time stock prices reflect a business underlying intrinsic values and its long-term prospects. As a result, the research process aims to arrive at a comprehensive understanding of a companys business including the nature of its interactions with customers, suppliers, competitors and regulators. The idea is to identify superior businesses with growing and predictable cash flows run by competent management and then allows the exponential power of compounding to work in our favor.

When valuing businesses, we take the perspective of a co-owner of the business and thus lean heavily on the concept of cash flows and economic earning power. In addition, we rely on various earnings multiples besides analyzing private market value and appropriate regional and global comparisons.

The basic principles that serve as the foundation for the above investment approach are:

Focus on the long term

There is substantive empirical evidence to suggest that equities as an asset class have provided superior risk adjusted returns over the long term. However, over short periods of time equity returns can be quite volatile influenced by fluctuating investor emotions and temporary fads. Additionally, different investment styles, sectors and approaches come in an out of favor distorting short-term performance. Longer-term returns are driven by economic fundamentals. As a result prices and fundamentals do decouple over shorter periods but tend to converge over time. At HDFC Mutual Fund, we focus on the long-term and aim to deliver superior returns across product offerings that in turn would help investors better plan to meet their long-term financial goals.

Managingrisk
Our aim is to purchase stocks at a price that represents a material discount to their long-term intrinsic value or at a price that is attractive from a relative value standpoint. Doing so explicitly recognizes the importance of capital preservation and provides a supportable underlying value that provides some insulation if actual outcomes are milder than initially forecast. This is consistent with a long-term, business-like approach to investing and allows for the challenges that companies will possibly face in a competitive and fast-changing market. Besides looking at risk of an individual investment decision, we also thoroughly analyze and aim to manage overall portfolio risk.

Maintain a balanced outlook on the market

We do not believe in taking a call on the near term direction of the market indices. We avoid market timing and as a result, except for extenuating circumstances, our funds do not make substantial cash allocations. The same market mechanism that creates the opportunity for successful long-term returns also presents volatility and accompanying anxieties in the short term. As long-term investors, we feel it is appropriate to maintain the patience and discipline that is demanded at such times and to the extent possible take advantage of such uncertainty. Through the above active management process, we aim to achieve higher risk-adjusted returns over time across all our products. Following the above investment philosophy in a disciplined manner has worked well for us as is attested by the steady out performance of our range of equity products over three, five and ten year periods.

Debt
Our investment philosophy for fixed income investments follows from the objective to deliver optimal risk-adjusted returns across our products. A combination of top down and bottom up approaches are used to construct portfolios. Global and local macro economic variables such as growth indicators, inflation outlook, currency changes, liquidity, etc are analyzed to determine the long-term and short-term trends. Short-term, cyclical economic considerations are used to fine-tune the duration of the portfolios. Our investment universe includes government securities, corporate bonds, mortgages backed securities, and asset backed securities and money market instruments. We make asset allocation changes within this universe depending upon changes in relative valuations / spreads and the forward outlook for them.

We maintain high credit quality portfolios across the board. Normally, portfolios have more than 85% in AA or higher rated assets. Credit risks are assumed after internal due diligence. The investment strategy of individual funds follows from the investment philosophy enunciated above and is fine tuned to suit the respective investment objectives of the funds.

WORKING OF MUTUAL FUNDS

DIFFERENT

MODES

OF

RECEIVING

THE

INCOME

EARNED FROM MUTUAL FUND INVESTMENTS

Mutual Funds offer three methods of receiving income:

Growth Plan

In this plan, dividend is neither declared nor paid out to the investor but is built into the value of the NAV. In other words, the NAV increases over time due to such incomes and the investor realizes only the capital appreciation on redemption of their investment.

Income Plan
In this plan, dividends are paid-out to the investor. In other words, the NAV only reflects the capital appreciation or depreciation in market price of the underlying portfolio.

Dividend Re-investment Plan

In this case, dividend is declared but not paid out to the investor, instead, it is reinvested back into the scheme at the then prevailing NAV. In other words, the investor is given additional units and not cash as dividend.

PORTFOLIO MANAGEMENT &DIVERSIFICATION

A combinations of securities that have risk& return feature make up a portfolio may or may not take on the aggregate directive scrips on the individual particulars portfolio analysis takes the various components of risk and return for each industry considers mixed effect of combined securities. Portfolio selection involves choosing the best portfolio to suit the risk return preferences of the portfolio investors; management of portfolio is a dynamic activity of evaluating and revising the portfolio in terms of its objectives. It is widely accepted that individual scrips carry a certain degree of risk Portfolio helps in spreading the risk over many securities This risk is reduced the basic principle is that is a portfolio holds several assets or securities, which may include cash also if even one goes back the other, will provide protection from the loss the diversification can be either vertical of horizontal. In vertical diversification a portfolio a portfolio can have Scrips of different companys with in the same industry in horizontal diversification one and have different scrips chosen from different industries.

OBJECTIVES OF PORTFOLIO MANAGEMENT The objectives of investment portfolio management can be classified in to two categories. 1. BASIC OBJECTIVES a. To maximize yield/return and b. To minimize risk

2. SECONDARY OBJECTIVE
a) Regular return b) Stable income c) Appreciation of capital d) More liquidity e) Safety of investment f) Tax Benefit

NEED FOR PORTFOLIO MANAGEMENT

Portfolio management is a process encompassing many activities of investments in assets and securities. It is a dynamic and flexible concept and involves regular and systematic analysis, judgment and action. The objective of this service is to help the unknown and investors with the expertise of professionals in investment portfolio management. It involves construction of portfolio based up on the investors objectives, constraints, objectives, constraints, preferences for a risk and returns and tax liability. The portfolio reviewed and adjusted from time to time in tune with the market conditions. The

evolution of portfolio is done in term of targets set for risk and return. The changes in the portfolio are to be effected to meet the changing condition. ELEMENTS OF PORTFOLIO MANAGEMENT Portfolio management is ongoing process involving the following basic tasks i. ii. iii. Specification of investors objectives, constraints and preferences. Selection of Asset Mix Strategies are to be developed and implemented in tune with investment policy formulated iv. v. vi. vii. Selection of Securities Portfolio Execution Portfolio revision Finally the evaluation of portfolio

SEBI GUIDELINES TO THE PORTFOLIO MANAGERS On 7th January 1993, the Security Exchange Board of India issued regulations to the portfolio managers for the regulation of portfolio management services by merchant bankers. They are as follows Portfolio management Services Shall be in the nature of investment or consultancy management for an agreed fee at clients risk. The portfolio manager Shall not guarantee return directly or indirectly the fee should not be depended upon or it should not be returned sharing basis Various term of agreements, fees, disclosures of risk and repayment should be mentioned Clients funds should be kept separately in client wise account which should be subject to audit?

Manager should report clients at intervals not exceeding six months Portfolio manager should maintain high standards of integrity and not desire any benefit directly or indirectly from clients funds

The client shall be entitled to inspect the documents. Portfolio managers shall not invest funds belonging to clients in badly financing, bill discounting and lending operations.

Clients money can be invested in money and capital market instruments settlement on termination of contract as agreed in the contract

PHASES OF PORTFOLIO MANAGEMENT: Each phase is an integral part of the whole process and the success of portfolio management depends upon the efficiency in carrying out each of the phases 1. Specification of investors objectives, constraints and preferences The first step in the portfolio management process is to specify the investment policy which summarizes the objectives, constraints and preferences of the investors. Objective can be expressed in the lines of their return requirements and risk tolerance levels where as constraints and preferences can be expressed in terms of liquidity, investment horizon, axes, regulations and unique circumstances.

I.

Selection of Asset mix Based on the investment objectives, constraints and preferences one will

create the proper Asset mix or asset allocation i.e. how much amount must be invested in each of the following asset categories:

 Cash Bonds Stocks Real estate Precious metals Other II. Formulation of Portfolio Strategy After the decision regarding is taken next important step is to formulate portfolio strategies. Two broad choices are available in this respect, an active portfolio strategy or a passive portfolio strategy.

Active portfolio strategy An active portfolio strategy is followed by most investment professionals and aggressive investors who strived to earn superior returns, after adjustment for risk. The four principal vectors by which the active portfolio strategy works are Market timing Sector rotation Security selection Used of specialized concept Passive Strategy The active strategy is based on the premise that capital market is characterized by inefficiencies which can be exploited by resorting to market timing, sector rotation, security selection, and use of specialized concept or some combination of these vectors.

The passive strategy, on the other hand, rests on the tenet that the capital market is fairly efficient with respect to the available information. Hence the search for superior returns through the active strategies is considered to be futile. Types of passive portfolios Passive portfolios can be classified into three types. They are Index funds Customized funds Factor / style funds Index funds

i.

Selection Of Securities
a.) Selection of fixed income avenues The following points should be taken into consideration while selecting fixed income avenues

Yield to maturity: yield to maturity for the fixed income avenue represents the rate of return earned by the investor if he invests in that fixed income avenue and stays till maturity.

Risk of default: To assess the risk of default take the help of credit rating.

Liquidity: If the fixed income security can be converted wholly or substantially into cash at a fairly short notice, it possesses liquidity of high order.

b.) Selection Of Equity Instruments Selection of equity instruments is can be carried on three alternative approaches namely fundamental analysis and technical analysis and random selection.

1. FUNDAMENTAL ANALYSIS:
The primary motive of buying a share is to sell it subsequently at a higher rate An investor would be interested to know the dividend to be paid on the share in the future as also the future price of the share. These values can only be estimated and predicted with certainty. Company specific factors such as the age of its plant, the quality of management, brand image of its labor management relations act etc. a) Industry wide factors such as demand supply gap in the industry, the emergence of substitute products, change in government policy relating to industry etc. b) Economy wide factors such as growth rate of the economy, inflation rate, and foreign exchange rates etc, which affects all companies. 2. TECHNICAL ANALYSIS The analysts believe that share prices are determined by the demand and supply forces operating in the market. These demand and supply forces in turn are influenced by a number of factors these factors cannot be qualified. BASIC PRINCIPLES OF TECHNICAL ANALYSIS The market value of security is related to demand and supply factors operating in the market There are both rational and irrational factors which surround the supply and demand factors of a security Security prices behave in a manner that their moment in continuous in a particular direction for same length of time Trends in stock prices have been seen to changes when there is a shift in demand and supply factors.

3. RANDOM SELECTION Before getting into discussion on management styles, it is helpful to review the Efficient Market Hypothesis (EMH) or random walk theory, and its implications for portfolio management. As we are aware, there are three versions of the theory: weak, Semi-strong and strong. And selection approach is based on the premise or belief in the EMH strong form, semi-strong or weak form. v.) Portfolio Execution Portfolio execution is the phase where the plan for buying /selling securities in given amounts according to our investment policies. This is the step which is often glossed over in portfolio management literature. However, it is an important practical step that has an considerable bearing on the investment results. For effective portfolio execution one has to know more about trading game, players in the trading game and the consequences of trading game. a.)Trading game: Security transaction tends to differ from normal business transactions in two fundamental ways. 1. The motive and the identity of the other party is not known in a security transaction which is very well known in a normal business transaction. 2. Trading is a zero sum game where one looses which will be a gain for others. b.)Key Players Security market appears to be thronged by four types of players or transactors. 1. Value based transactors 2. Information based transactors 3. Liquidity based transactors 4. Pseudo based information transactors Vi. PORTFOLIO REVISIONS Having constructed the optimal Portfolio the investor has to constantly monitor the Portfolio to ensure that it continues to he optimal As the economy and financial markets are dynamic, the changes take place almost daily The investor now has to revise his Portfolio The revision leads to purchase of new securities and sale of some of the existing securities from the Portfolio. Portfolio mainly consists of two activities a.)Portfolio rebalancing: Portfolio rebalancing involves reviewing and revising the portfolio composition. There are three basic policies exist I portfolio rebalancing. 1. Buy and hold policy

2. Constant mix policy 3. Portfolio insurance policy

vi.)Portfolio up gradation Portfolio up gradation calls for re assessing the return characteristics of various securities, selling over priced securities and buying under priced securities. It may entail other changes the investor may consider necessary to enhance the performance of portfolio. vii.) Portfolio Evaluation The objective of constructing a Portfolio and revising it periodically is to earn maximum returns with minimum risk Portfolio evaluation is the process Which is concerned with assessing the performance of a Portfolio over a selected period of time in terms of return and risk Portfolio evaluation is useful in yet another way It provides a mechanism for identifying weakens in the investment process and for improving these deficient areas.

PORTFOLIO RETURNS

Formula for two securities portfolio

Rp=WaRa+WbRb

Formula for three securities portfolio

Rp=WaRa+WbRb+WcRC Where WA=weight of security a Wb=weight of security b WC=weight of security c Ra=return on security a a. Rate of return: Rb=return on security b RC =return on security c. Rp=return on portfolio.

The rate of return from a portfolio for a given period is measured as follows Dividend income + Terminal Value Initial value To calculate average rate of return, over a period of several tears, the following measure are employed. 1. Arithmetic average return

2. Geometric average return There is another significant measure is there for calculating rate of return i.e. Internal rate of return which is defined as the discount rate which brings about an equality between the initial investment and the present value of the future benefits associated with the investment and the present value of the future benefits associated with the investment. Suppose the initial investment is of amount M and the respective cash flows are a1, a2, a3, a4 for four terms then internal rate of return r can be as follows M = A1 B risk Every investment is characterized by return and risk A person making an investment expects to get some return from the investment in the future It as future is uncertain, so is the future expected return It is this uncertainty associated with the returns from an investment that introduced risk into an investment Risk distinguishes between the expected return and the realize return from an investment The expected return is the uncertain future that an investor expects to get from his investment The realized return is the certain return that an investor has actually obtained from his investments are the end of the holding period

TYPES OF RISK SYSTEMATIC RISK: i. Market risk ii. Interest market risk iii. Purchasing power risk

UNSYSTEMATIC RISK: 1. Business risk 2. Financial risk

PERFORMANCE EVALUATION For evaluating the performance of portfolio following four methods re employed Sharpe method Trey nor method Jenson method Fama method

VARIANCE The variance is one of several indices of variability that statisticians use to characterize the dispersion among the measures in a given data set. To calculate the variance of a given data set, it is necessary to first calculate the mean of the scores, then measure the amount that each score deviates from the mean and then square that deviation. Numerically, the variance equals the average of the several squared deviations from the mean STANDARD DEVIATION The standard deviation is one of several indices of variability that statisticians use to characterize the dispersion among the measures in a given data set. To calculate the standard deviation of a data set it is first necessary to calculate that data sets variance. Numerically, the standard deviation is the square root of the variance. Unlike the variance, which is a somewhat abstract measure of variability, the standard deviation can be readily conceptualized as a distance along the scale of measurement. LIST OF EQUITY SCHEMES 1. KOTAK 30 2. KOTAK MID CAP 3. KOTAK OPPORTUNITIES 4. KOTAK LIFE STYLE 5. KOTAK CONTRA 6. KOTAK TAX SAVER 7. KOTAK EQUITY ARBITRAGE FUND 8. KOTAK EMERGING EQUITY SCHEME 9. KOTAK GLOBAL EMERGING MARKET 10. KOTAK INDO WORLD INFRA STRUCTURE 11. KOTAK SELECT FOCUS FUND 12. KOTAK STAR KID FACILITY LIST OF DEBT SCHEMES 1. KOTAK INCOME PLUS 2. KOTAK BOND 3. KOTAK BOND SHORT TERM 4. KOTAK LIQUID 5. KOTAK GILT SAVINGS 6. KOTAK KOTAK 30 To generate capital appreciation from a portfolio of predominantly equity and equity related securities with investment in generally not more than 30 stocks.

KOTAK LIFE STYLE To generate long-term capital appreciation from a portfolio of equity and equity related securities, generally diversified across companies, which are likely to benefit by the rising household spending in India. KOTAK OPPORTUNITIES To generate capital appreciation from a diversified portfolio of equity and equity related securities. KOTAK MID CAP To generate capital appreciation from a diversified portfolio of equity and equity related securities. KOTAK TAX SAVER To generate long-term capital appreciation from a diversified portfolio of equity and equity related securities and enable investors to avail the income tax rebate, as permitted from time to time. KOTAK CONTRA To generate capital appreciation from a diversified portfolio of equity and equity related instrument. KOTAK GILT To generate risk-free returns through investments in sovereign securities issued by the Central Government and/or a State Government and/or reverse repos in such securities. KOTAK BOND To create a portfolio of debt of different maturities so as to spread the risk across a wide maturity horizon and different kinds of issuers in the debt market. KOTAK BOND SHORT TERM PLAN To provide reasonable returns and high level of liquidity by investing in debt and money market instruments of different maturities, so as to spread the risk across different kinds of issuers in the debt market. KOTAK BALANCE To achieve growth by investing in equity and equity related instruments, balanced with income generation by investing in debt and money market instruments. KOTAK TECH To generate capital appreciation from a portfolio of predominantly equity and equity related securities in the information technology sector.

KOTAK MNC To generate capital appreciation from a portfolio of predominantly equity and equity related securities issued by Multinational Companies. KOTAK LIQUID To provide reasonable returns and high level of liquidity by investing in debt and money market instruments of different maturities, so as to spread the risk across different kinds of issuers in the debt market. KOTAK FLOATER SHORT TERM To reduce the interest rate risk associated with investments in fixed rate instruments by investing predominantly in floating rate securities, money market instruments and using appropriate derivatives. KOTAK INCOME PLUS SCHEME To enhance returns over a portfolio of debt instruments with a moderate exposure in equity and equity related instruments. KOTAK GLOBAL INDIA To generate capital appreciation from a diversified portfolio of predominantly equity and equity related securities issued by Globally Competitive Indian Companies. KOTAK EQUITY FOF To generate long-term capital appreciation from portfolio created by investing predominantly in open-ended diversified equity schemes of Mutual Funds registered with SEBI. KOTAK FLOATER LONG TERM: To reduce the interest rate risk associated with investments in fixed rate instruments by investing predominantly in floating rate securities, money market instruments and using appropriate derivatives. KOTAK FLEXI DEBT To maximize returns through an active management of a portfolio of debt and money market securities. KOTAK DYNAMIC FOF To provide long-term capital appreciation by investing in a portfolio of diversified large cap equity schemes and liquid schemes of mutual funds registered with SEBI. KOTAK FMP SERIES To generate returns through investments in debt and money market instruments with a view to significantly reduce the interest rate risk.

KOTAK CASH PLUS To generate income from investment in debt and money market securities and by availing arbitrage opportunities between prices of spot and derivatives markets. KOTAK FLEXI FOF, KOTAK FLEXI FOF - SERIES I AND KOTAK FLEXI FOF SERIES II To provide long-term capital appreciation by investing in a portfolio of Diversified equity schemes and Liquid / Short Term / Floating Rate Schemes / plans of mutual funds registered with SEBI. KOTAK TWIN ADVANTAGE - SERIES II AND KOTAK TWIN ADVANTAGE SERIES III To generate income by investing in the Debt & Money Market instrument and to generate capital appreciation by investing in equity index options.

CHAPTER V

THEORITICAL FRAME WORK

DATA ANALYSIS
Kotak-30 Investment Objective
To generate capital appreciation from a portfolio of predominantly equity related securities. The portfolio will generally comprise of equity and equity related instruments of around 30 companies which may go up to 39 companies.

Available Options
Dividend Payout, Dividend Reinvestment Growth

Fund Managers
Mr. Krishna Sanghavi & Mr. Emmanuel Elango.

Loads
Entry Load: Nil. Exit Load:
i. ii. For redemptions /switch outs with in 1 year from the date of allotment of units, irrespective of the amount of investment:1% For redemption in case of SIP/STP with in 2 years from the date of allotment of units, irrespective of the amount of investment:1%

iii.

Where units are allotted upon Reinvestment of Dividends: Nil

Minimum Investment Amount Initial Investment: Rs.5000 Additional Investment: Rs. 1000 & in multiples Re.1 Ideal investments horizon: 1-3 year Benchmark S&P CNX Nifty Inception Date- December 29, 1998
TABLE PERFORMANCE (%) OF KOTAK-30 KOTAK -30 S&P CNX NIFTY 4.98 29.89 9.52 24.01 24.25 2.14 23.8 7.14 19.05 19.55

COMPOUNDED ANNUALISED RETURNS Last 6 Months Last 1 year Last 3 years Last 5 years Since Inception(Dec 29,1998) BAR CHART

INTEREPATATION In KOTAK 30 last 6 months, one year, three years, five years, since inception returns are 4.98%,29.89%,9.52%,24.01%,24.25% and Bench Mark Returns S&P CNX NIFTY

are 2.14%,23.80%,7.14%,19.05%,19.55% respectively. Here last six months, one year, three years, returns are high when compare to Bench mark returns. Last five years, inception returns are also high when comparing to Bench Mark Returns. % of Net Assets Equity and Equity related(Listed Awaiting Listed on Stock Exchange) Reliance Industries Ltd petroleum Products 7.44% Infosys Technologies Ltd Software 6.14% State Bank Of India Banks 5.40% Oil & Natural Gas Corporation Ltd Oil 5.18% ITC Ltd Consumer-Non Durables 3.65% Larsen & Toubro Ltd Construction Project 3.64% Tata Consultancy Services Ltd Soft Ware 3.24% Lupin Ltd Pharmaceuticals 3.20% Hindustan Petroleum Corporation Ltd Petroleum Products 3.15% Axis Bank Ltd Banks 3.03% Others 51.30% Listed/Awaiting List on Stock Exchange -Total 95.37% Futures India bulls Real Estate Ltd 1.14% Futures(Market Value Represents Notional Value)1.14% Total Money Market Instruments Commercial Papers (CP)/Certificate of Deposits(CDS) Public Sector Under Takings Central Bank Of India P1+ 2.18% Oriental Bank Of Commerce P1+ 1.05% IDBI Bank Ltd A1+ 0.19% State Bank Of Patiala P1+ 0.10% Public Sector Under Takings-Total 3.52% Term Deposits Kotak Mahindra Bank Ltd 1.15% Term Deposits-Total 1.15% Net Current Assets/(Liabilities) -1.18% Grand Total 100% Portfolio of Kotak 30 Issuer/Instrument Industry/Rating

INTEREPATATION In the Kotak-30 diversified to equity & equity related stock exchanges are 95.37%, futures are 1.14% & public Sector under Takings are 3.52% & Term Deposits are 1.15%.

Asset Allocation

PIE CHART
Banks Soft ware Petroleum Pharmaceutics FMCG Oil Media Power Others 18.8% 11.2% 10.6% 8.9% 6.5% 5.2% 3.4% 3.4% 25.5%

INTEREPATATION In Kotak-30 major Investments are other Sectors 25.50%, Banks are 18.08%, software is 11.20%, petroleum products are 10.60%, Pharmaceuticals are 8.90%, FMCG are 6.50%, Oil Includes 5.20%, and Media & Power includes 3.40%

CONCLUSION
In the Kotak-30 diversified to equity & equity related stock exchanges are 95.37%, futures are 1.14% & public Sector under Takings are 3.52% & Term Deposits are 1.15% In Kotak-30 major Investments are other Sectors 25.50%, Banks are 18.08%, software is 11.20%, petroleum products are 10.60%, Pharmaceuticals are 8.90%, FMCG are 6.50%, Oil Includes 5.20%, and Media & Power includes 3.40%

Kotak Opportunities
Investment Objective
To generate capital appreciation from a portfolio of predominantly equity related securities.

Available Options
Dividend Payout, Dividend Reinvestment Growth

Fund Managers
Mr. Krishna Sanghavi & Mr. Pankaj Tibrewal

Loads
Entry Load: Nil. Exit Load:
iv. v. vi. For redemptions /switch outs with in 1 year from the date of allotment of units, irrespective of the amount of investment:1% For redemption in case of SIP/STP with in 2 years from the date of allotment of units, irrespective of the amount of investment:1% Where units are allotted upon Reinvestment of Dividends: Nil

Minimum Investment Amount Initial Investment: Rs.5000 Additional Investment: Rs. 1000 & in multiples Re.1 Ideal investments horizon: 1-3 years Benchmark S&P CNX 500 Inception Date-September 9, 2004

TABLE BAR CHART PERFORMANCE (%) OF KOTAK OPPORTUNITIES COMPOUNDED KOTAK S&P CNX 500 ANNUALISED OPPORTUNITIES RETURNS Last 6 Months 5.60 2.12 Last 1 year 32.63 27.41 Last 3 years 11.40 6.82 Last 5 years 24.84 18.31 Since Inception(Sep9, 29.33 21.92 2004))

INTEREPATATION In KOTAK OPPORTUNITIES last 6 months, one year, three years, five years, since inception returns are 5.6%,32.63%,11.4%,24.84%,29.33% and Bench Mark Returns S&P CNX 500 are 2.12%,27.41%,18.31%,21.92% respectively. Here last six months, one year, three years, returns are high when compare to Bench mark returns. Last five years, inception returns are also high when compare to Bench Mark Returns Portfolio of Kotak opportunities Issuer/Instrument Industry/Rating

% of Net Assets Equity and Equity related(Listed Awaiting Listed on Stock Exchange) Reliance Industries Ltd petroleum Products 3.90%

GlaxoSmithKline Consumer Health Care Ltd State Bank Of India Oil & Natural Gas Corporation Ltd Lupin Ltd Indian Oil Corporation Ltd Power Finance Corporation Ltd Oracle Financial Services Software Ltd Bharat Petroleum Corporation Ltd Infosys Technologies Ltd Others Listed/Awaiting List on Stock Exchange -Total Options Nifty-5200.00-put option Options-Total Money Market Instruments Commercial Papers (CP)/Certificate of Deposits(CDS) Public Sector Under Takings State Bank Of Mysore Andhra Bank IDBI Bank Ltd Corporation Bank Oriental Bank of Commerce Public Sector Under Takings-Total Term Deposits Kotak Mahindra Bank Ltd Term Deposits-Total Net Current Assets/(Liabilities) Grand Total

Consumer Non Durables Banks Oil Pharmaceuticals Petroleum products Finance Soft ware Petroleum Products Soft ware

3.56% 2.85% 3.27% 2.61% 2.52% 2.52% 2.50% 2.34% 2.24% 67.42% 95.37% 0.03% 0.03%

P1+ P1+ A1+ P1+ P1+

2.29% 0.17% 0.18% 0.09% 0.09% 2.82% 0.62% 0.62% 0.80% 100%

INTEREPATATION In the Kotak opportunities diversified to equity & equity related stock exchanges are 95.37%, options are 0.03% & public Sector under Takings are 2.82% & Term Deposits are 0.80%.

Asset Allocation

SECTOR ALLOCATION Banks Parma Consumer Non Durables Petroleum Media Construction Project Power Others Software Finance Auto

PERCENTAGE OF RATING 12.28% 10.38% 9.27% 8.76% 5.38% 4.62% 3.86% 27.56% 9.12% 4.91% 3.86%

PIE CHART

INTEREPATATION In Kotak opportunities major Investments are other Sectors 27.56%, Banks are 12.28%, Pharma is 10.38%, software is 9.27%, petroleum products are 8.76%, Media is

5.38%,Pharmaceuticals are 8.90%, Finance is 8.76% Media is 5.38%,Auto Mobiles are 3.86%,construction project are 4.26% CONCLUSION In the Kotak opportunities diversified to equity & equity related stock exchanges are 95.37%, options are 0.03% & public Sector under Takings are 2.82% & Term Deposits are 0.80%. In Kotak opportunities major Investments are other Sectors 27.56%, Banks are 12.28%, Pharma is 10.38%, software is 9.27%, petroleum products are 8.76%, Media is 5.38%,Pharmaceuticals are 8.90%, Finance is 8.76% Media is 5.38%,Auto Mobiles are 3.86%,construction project are 4.26%

Kotak Tax Saver

Investment Objective
To generate long-term capital appreciation from a diversified portfolio of equity and equity Related Securities and enable investors to avail the income tax rebate, as permitted from time to time

Available Options
Dividend Payout, Dividend Reinvestment Growth

Fund Managers
Mr. Krishna Sanghavi & Mr. Pankaj Tibrewal

Loads
Entry Load: Nil. Exit Load: Exit load not applicable for Tax Saver Scheme Minimum Investment Amount Initial Investment : Rs.500 Additional Investment : Rs. 500 & in multiples Rs.500

Ideal investments horizon : 1-3 years Benchmark : S&P CNX 500 Inception Date : November 23, 2005

TABLE
PERFORMANCE (%) OF KOTAK TAX SAVER COMPOUNDED KOTAK TAX S&P CNX Nifty ANNUALISED RETURNS SAVER Last 6 Months 6.31 2.12 Last 1 year 31.83 27.41 Last 3 years 2.47 6.82 Since Inception(November 13.23 15.74 23,2005)

BAR CHART

INTEREPATATION

In KOTAK TAX SAVER last 6 months, one year, three years, since inception returns are 6.31%,31.83%,2.47%,13.23% and Bench Mark Returns S&P CNX NIFTY are 2.12%,27.41%,6.82%,15.74% respectively. Here last six months, one year returns are high when comparing to Bench mark returns. Last three years, inception returns are low when comparing to Bench Mark Returns Portfolio of Kotak Tax Saver Issuer/Instrument Industry/Rating

% of Net Assets Equity and Equity related(Listed Awaiting Listed on Stock Exchange) Reliance Industries Ltd petroleum Products 5% GlaxoSmithKline Consumer Health Care Ltd Consumer Non Durables 2.71% State Bank Of India Banks 2.52% Oil & Natural Gas Corporation Ltd Oil 2.62% Punjab National Bank Banks 2.96% Bharat Heavy Electrical Ltd Industrial Capital Goods 2.82% Power Finance Corporation Ltd Finance 2.51% Larsen Toubro Ltd Soft ware 2.39% Bharat Petroleum Corporation Ltd Petroleum Products 2.80% Infosys Technologies Ltd Soft ware 3.99% Others Construction Project 67.06% Listed/Awaiting List on Stock Exchange -Total Money Market Instruments Commercial Papers (CP)/Certificate of Deposits(CDS) Public Sector Under Takings United Bank Of India P1+ Andhra Bank P1+ Central Bank Of India A1+ Public Sector Under Takings-Total Net Current Assets/(Liabilities) Grand Total 97.38%

0.87% 0.17% 0.53% 1.57% 1.05% 100%

INTEREPATATION In the Kotak opportunities diversified to equity & equity related stock exchanges are 97.38%, public Sector under Takings are 1.57% & Net Current Assets are 1.05%.

Asset Allocation

SECTOR ALLOCATION Banks Software Petroleum products Consumer Non Durables Pharma Finance Capital goods Ferrous metals Cement Media Others

PERCENTAGE OF RATING 15.10% 10.4% 7.8% 7.7% 7.0% 5.0% 4.4% 3.9% 3.7% 4.5% 30.5%

PIECHART

INTEREPATATION In Kotak Tax Saver major Investments are other Sectors 30.50%, Banks are 15.10%, Soft ware is 10.40 %, Petroleum Products are 7.08%, Consumer Non Durables are 7.70%,Pharma is 7.00%,Finance is 5.00%, capital goods are 4.40%, Ferrous Metals are 3.90%,cement is 3.70% media is 4.50%.

Conclusion:
In the Kotak opportunities diversified to equity & equity related stock exchanges are 95.37%, options are 0.03% & public Sector under Takings are 2.82% & Term Deposits are 0.80%. In Kotak Tax Saver major Investments are other Sectors 30.50%, Banks are 15.10%, Soft ware is 10.40 %, Petroleum Products are 7.08%, Consumer Non Durables are 7.70%,Pharma is 7.00%,Finance is 5.00%, capital goods are 4.40%, Ferrous Metals are 3.90%,cement is 3.70% media is 4.50%.

Kotak MID-CAP Investment Objective

To generate capital appreciation from a portfolio of predominantly equity related securities.

Available Options
Dividend Payout, Dividend Reinvestment Growth

Fund Managers
Mr. Pankaj Tibrewal & Mr. Emmanuel Elango.

Loads
Entry Load: Nil. Exit Load:

vii. viii. ix.

For redemptions /switch outs with in 1 year from the date of allotment of units, irrespective of the amount of investment:1% For redemption in case of SIP/STP with in 2 years from the date of allotment of units, irrespective of the amount of investment:1% Where units are allotted upon Reinvestment of Dividends: Nil

Minimum Investment Amount

Initial Investment: Rs.5000 Additional Investment: Rs. 1000 & in multiples Re.1 Ideal investments horizon: 1-3 years Benchmark CNX Midcap Inception Date- February 24, 2005
TABLE PERFORMANCE (%) OF KOTAK MIDCAP COMPOUNDED KOTAK MIDCAP CNX MIDCAP ANNUALISED RETURNS Last 6 Months 13.77 9.39 Last 1 year 53.95 49.82 Last 3 years 1.65 10.79 Last 5 years 17.38 21.57 Since Inception(Feb 24, 17.68 20.72 2005)

BARCHART

INTEREPATATION In KOTAK MIDCAP last 6 months, one year, three years, five years, since inception returns are 13.77%,53.95%,1.65%,17.38%,17.68% and Bench Mark Returns CNX MIDCAP are 9.39%,49.82%,10.79%,21.57%,20.72 respectively. Here last six months, one year, returns are high when compare to Bench mark returns. Last three years, five years, inception returns are low when comparing to Bench Mark Returns Portfolio of Kotak Mid Cap Issuer/Instrument Industry/Rating

% of Net Assets Equity and Equity related(Listed Awaiting Listed on Stock Exchange) GlaxoSmithKline Consumer Health Care Ltd Consumer Non Durables 3.02% Hath way Cable Ltd& Datacom Ltd Media & Entertainment 2.53% Sintex Industries Ltd Industrial Products 2.32% Yes Bank Ltd Banks 2.23% Indian Bank Banks 2.21% Dish TV India Ltd Media & Entertainment 2.11% Patni Computers System Ltd software 2.09% Jubilant Organosys Ltd pharmaceuticals 2.01% Indian Bulls Real Estate Ltd Construction 2% Lanco Infratech Ltd Construction Project 2% Others 75.65% Listed/Awaiting List on Stock Exchange -Total Money Market Instruments Commercial Papers (CP)/Certificate of Deposits(CDS) Public Sector Under Takings 98.17%

Central Bank Of India Public Sector Under Takings-Total Net Current Assets/(Liabilities) Grand Total INTERPRATATION

P1+

0.57% 0.57% 1.26% 100%

In the Kotak mid-cap diversified to equity & equity related stock exchanges are 98.17%, public Sector under Takings are 0.57% & Net Current Assets are 1.26%.

Sector Allocation
SECTOR ALLOCATION Banks Media& Entertainment Industrial Capital goods pharmacy Fertilizes Industrial products Software Cement Transport Others Consumer Non-Durables PERCENTAGE OF RATING 12% 9% 7% 7% 6% 6% 5% 4% 4% 26% 14%

PIE CHART

INTERPRATATION In Kotak Mid-cap major Investments are other Sectors 26%, Consumer Non Durables are are 14%, Banks are 12%,Media & Entertainment is 9%,Industrial Capital Goods are 6%, Soft ware is 5%, Cement is 4%,Transportation is 4%,Fertilizes are 6%, Pharma is 7%. CONCLUSION: In the Kotak mid-cap diversified to equity & equity related stock exchanges are 98.17%, public Sector under Takings are 0.57% & Net Current Assets are 1.26%. In Kotak Mid-cap major Investments are other Sectors 26%, Consumer Non Durables are 14%, Banks are 12%,Media & Entertainment is 9%,Industrial Capital Goods are 6%, Soft ware is 5%, Cement is 4%,Transportation is 4%,Fertilizes are 6%, Pharma is 7%.

Kotak Balance

Investment Objective
To achieve growth by investing in equity & equity related instruments, balanced with income generation by investing in debt & Money Market instruments.

Available Options
Dividend Payout, Dividend Reinvestment

Fund Managers
Mr. Krishna Sanghavi, Mr. Sajit Pisharodi & Mr.Abhishek Bisen

Loads
Entry Load: Nil. Exit Load:
x. xi. xii. For redemptions /switch outs with in 1 year from the date of allotment of units, irrespective of the amount of investment:1% For redemption in case of SIP/STP with in 2 years from the date of allotment of units, irrespective of the amount of investment:1% Where units are allotted upon Reinvestment of Dividends: Nil

Minimum Investment Amount

Initial Investment : Rs.5000 Additional Investment : Rs. 1000 & in multiples Re.1 Ideal investments horizon: 1-3 years Benchmark : Crisil Balanced Fund Index Inception Date : November 25, 1999
TABLE COMPOUNDED ANNULIASED RETURNS Last 6 Months Last 1 year Last 3 years Last 5 years Since Inception(Nov 25, 1999) Performance (%) of Kotak Balance KOTAK BALANCE CRISIL BALANCED FUND INDEX 3.40 23.97 8.90 17.97 18.09 2.63 17.34 5.33 13.32 NA

BAR CHART

INTEREPATATION In KOTAK BALANCE last 6 months, one year, three years, five years, since inception returns are 3.4%,23.97%,8.9%,17.97%,18.09% and Bench Mark Returns CRISIL BALANCED FUND INDEX are 2.63%,17.34%,5.33%,13.32%,0% respectively. Here last six months, one year, returns are high when compare to Bench mark returns. Last three years, five years, inception returns are also high when comparing to Bench Mark Returns. Portfolio of Kotak Balance Issuer/Instrument Industry/Rating

% of Net Assets Equity and Equity related(Listed Awaiting Listed on Stock Exchange) Reliance Industries Ltd petroleum Products 3.90% GlaxoSmithKline Consumer Health Care Ltd Consumer Non Durables 3.56% Bharat Heavy Electricals ltd Industrial Capital Goods 2.85% Oil & Natural Gas Corporation Ltd Oil 3.27% Voltas Ltd Construction Project 2.61% Indian Oil Corporation Ltd Petroleum products 2.52% Ipca Laboratories Pharmaceuticals 2.52% Gail Ltd Petroleum Products 2.50% Cipal Ltd pharmaceuticals 2.34% Balkrishna industries Ltd Auto Ancillaries 2.24% Others 67.42% Listed/Awaiting List on Stock Exchange -Total 95.37%

Total India bulls Real Estate Ltd Futures-total Debt Instruments Debentures and Bonds Corporate Debt/Financial Intuitions Shriram Transport Finance Co Ltd Corporate Debt/Financial Intuitions-Total Government Dated Securities 7.8% Central Government Government Dated Securities-Total Money Market Instruments Commercial Papers (CP)/Certificate of Deposits(CDS) Public Sector Under Takings IDBI Bank Ltd A1+ Oriental Bank of Commerce P1+ Public Sector Under Takings-Total Term Deposits Kotak Mahindra Bank Ltd Term Deposits-Total Net Current Assets/(Liabilities) Grand Total INTERPRATION: In the Kotak Balance diversified to equity & equity related stock exchanges are 95.37%, Futures Total 0.35% Corporate Debt /Financial Instutions are 9.32%, public Sector under Takings are 10.93% & Term Deposits are 7.81%.

0.35% 0.35%

9.32% 9.32% 7.99% 7.99%

1.56% 9.37% 10.93% 7.81% 7.81% -5.74% 100%

Sector Allocation
SECTOR ALLOCATION Commercial Paper/certificate of Deposits Debentures and Bonds pharmaceuticals Government Dated Securities Banks CBLO& Term Deposits & Reverse Repo Petroleum products Consumer Non Durables Software Oil Others PERCENTAGE OF RATING 10.93% 9.32% 8.31% 7.99% 7.88% 7.81% 6.89% 6.17% 6.07% 4.36% 24.27%

PIECHART

INTERPRTATION In Kotak Balance major Investments are Bank 18.28%, Commercial paper/Certificate of Deposits are 10.56%, Derivatives are 8.19%,Pharmacetuticals is 7.25%,Media & Entertainment is 10.30%, CBLO & Term Deposits & Reverse Repo are 4.16%, Auto is 8.01%, Consumer Non-Durables are 18.91%, Finance is 5.24%,Transportation is 3.09%,others are 5.56%

Conclusion
In the Kotak Balance diversified to equity & equity related stock exchanges are 95.37%, Futures Total 0.35% Corporate Debt /Financial Instutions are 9.32%, public Sector under Takings are 10.93% & Term Deposits are 7.81%. In Kotak Balance major Investments are Bank 18.28%, Commercial paper/Certificate of Deposits are 10.56%, Derivatives are 8.19%,Pharmacetuticals is 7.25%,Media & Entertainment is 10.30%, CBLO & Term Deposits & Reverse Repo are 4.16%, Auto is 8.01%, Consumer Non Durables are 18.91%, Finance is 5.24%,Transportation is 3.09%,others are 5.56%

Kotak Life Style

Investment Objective
To investment object of the fund is to generate long term capital appreciation from a portfolio of equity and equity related securities, generally diversified across companies, Which are likely to benefit by changing lifestyle and rising consumerism in India.

Available Options
Dividend Payout, Dividend Reinvestment Growth

Fund Managers
Mr. Krishna Sanghavi & Mr. Emmanuel Elango.

Loads
Entry Load: Nil. Exit Load:
xiii. xiv. xv. For redemptions /switch outs with in 1 year from the date of allotment of units, irrespective of the amount of investment:1% For redemption in case of SIP/STP with in 2 years from the date of allotment of units, irrespective of the amount of investment:1% Where units are allotted upon Reinvestment of Dividends: Nil

Minimum Investment Amount

Initial Investment: Rs.5000 Additional Investment: Rs. 1000 & in multiples Re.1 Ideal investments horizon: 1-3 years Benchmark S&P CNX 500 Inception Date- March 21, 2006
TABLE

BARCHART Performance (%) of Kotak Life Style COMPOUNDED KOTAK BALANCE S&P CNX 500 ANNULIASED RETURNS Last 6 Months Last 1 year Last 3 years Since Inception(Mar 21,2006) 13.08 34.50 -1.08 5.64 2.12 27.41 6.82 11.17

INTEREPATATION In KOTAK Life Style last 6 months, one year, three years, since inception returns are 13.08%, 34.5%,-1.08%, 5.64% and Bench Mark Returns S&P CNX 500 are 2.12%, 27.41%, 6.82%, 11.17% respectively. Here last six months, one year returns are high when comparing to Bench mark returns. Last three years, inception returns are low when compare to Bench Mark Returns. Portfolio of Kotak Life Style

% of Net Assets Equity and Equity related(Listed Awaiting Listed on Stock Exchange) ITC Ltd Consumer Non Durables 4.23% GlaxoSmithKline Consumer Healthcare Ltd Consumer Non Durables 3.50% Lupin Ltd Pharmaceuticals 3.27% TVS Motors Company Ltd Auto 2.93% HDFC Bank Ltd Banks 2.92% State Bank Of India Banks 2.89% Nestle India Ltd Consumer Non Durables 2.66% Amara Raja Batteries Ltd Auto Ancillaries 2.54% Hero Honda Motors Ltd Auto 2.36% Cipal Ltd Pharmaceuticals 2.34% Others 51.95% Listed/Awaiting List on Stock Exchange -Total 81.59% Futures Vijaya Bank 2.08% DLF Limited 1.07% India bulls Real Estate 1.03% Indian Bank 1% Andhra Bank 0.99% United Spirits 0.79% Housing Development and Infrastructure Ltd 0.67% Mahindra &Mahindra Ltd 0.56% Futures(Market Value Represents Notional Value)8.19% Total Money Market Instruments Commercial Papers (CP)/Certificate of Deposits(CDS) Public Sector Under Takings State Bank Of Mysore P1+ 9.18% Central bank Of India P1+ 0.92% ONGC VIDESH LTD P1+ 0.46% Public Sector Under Takings-Total 10.56% Term Deposits Kotak Mahindra Bank Ltd 4.61% Term Deposits-Total 4.61% Net Current Assets/(Liabilities) -4.95% Grand Total 100% INTERPRATATION In the Kotak Balance diversified to equity & equity related stock exchanges are 95.37%, Futures Total 0.35% Corporate Debt /Financial Instutions are 9.32%, public Sector under Takings are 10.93% & Term Deposits are 7.81%.

Issuer/Instrument

Industry/Rating

Sector Allocation
SECTOR ALLOCATION PERCENTAGE OF RATING

Commercial Paper/certificate of Deposits Derivatives Pharmaceuticals Media & Entertainment Banks CBLO& Term Deposits & Reverse Repo Auto Consumer Non Durables Finance Transportation Others PIECHART

10.56% 8.19% 7.25% 10.3% 18.28% 4.61% 8.01% 18.91% 5.24% 3.09% 5.56%

INTERPRATATION In Kotak Balance major Investments are Bank 18.28%, Commercial paper/Certificate of Deposits are 10.56%, Derivatives are 8.19%,Pharmacetuticals is 7.25%,Media & Entertainment is 10.30%, CBLO & Term Deposits & Reverse Repo are 4.16%, Auto is 8.01%, Consumer Non Durables are 18.91%, Finance is 5.24%,Transportation is 3.09%,others are 5.56% INTERPRATATION In the Kotak Balance diversified to equity & equity related stock exchanges are 95.37%, Futures Total 0.35% Corporate Debt /Financial Intuitions are 9.32%, public Sector under Takings are 10.93% & Term Deposits are 7.81%. In Kotak Balance major Investments are Bank 18.28%, Commercial paper/Certificate of Deposits are 10.56%, Derivatives are 8.19%,Pharmacetuticals is

7.25%,Media & Entertainment is 10.30%, CBLO & Term Deposits & Reverse Repo are 4.16%, Auto is 8.01%, Consumer Non Durables are 18.91%, Finance is 5.24%,Transportation is 3.09%, others are 5.56%

Kotak Select Focus Fund

Investment Objective
The investment objective of the schemes is to generate long-term capital appreciation from a portfolio of equity and equity related securities, generally focused on a few selected sectors.

Available Options
Dividend Payout, Dividend Reinvestment Growth

Fund Managers
Mr. Krishna Sanghavi, Mr. Emmanuel Elango & Mr. Abhishek Bisen.

Loads
Entry Load: Nil. Exit Load:
xvi. xvii. For redemptions /switch outs with in 1 year from the date of allotment of units, irrespective of the amount of investment:1% For redemption in case of SIP/STP with in 2 years from the date of allotment of units, irrespective of the amount of investment:1%

xviii.

Where units are allotted upon Reinvestment of Dividends: Nil

Performance (%) of kotak select Focus Fund

COMPOUNDED KOTAK SELECT ANNUALISED RETURNS FOCUS Last 6 months 5.59 Since inception 12.34 S&P CNX NIFTY 2.14 10.00

Minimum Investment Amount

Initial Investment: Rs.5000 and in multiple of Re.1 for purchase and for Re 0.01 for
switches

Additional Investment: Rs. 1000 & in multiples Re.1 Ideal investments horizon: 1-3 years Benchmark S&P CNX Nifty Inception Date- September 11, 2009 TABLE

BAR CHART

INTEREPATATION

In KOTAK Select focus fund last 6 months, since inception returns are 5.59%,12.34% and Bench Mark Returns S&P CNX Nifty are 2.14%,10%respectively. Here last six months, Since inception returns are high when comparing to Bench mark returns. Portfolio of Kotak Select Focus Issuer/Instrument Industry/Rating

% of Net Assets Equity and Equity related(Listed Awaiting Listed on Stock Exchange) Infosys Technologies Ltd Software 3.43% GlaxoSmithKline Consumer Healthcare Ltd Consumer Non Durables 3.11% Reliance Industries Ltd Petroleum Products 3.01% Larsen And Toubro Ltd Construction Project 2.78% HDFC Ltd Finance 2.71% Tata Consultancy Service Ltd Software 2.54% Hindustan petroleum Corporation Ltd Petroleum Products 2.45% Oracle Finance Services Software Ltd Software 2.43% ICICI Bank Ltd Banks ITC Ltd Consumer Non Durables Others Listed/Awaiting List on Stock Exchange -Total Money Market Instruments Commercial Papers (CP)/Certificate of Deposits(CDS) Public Sector Under Takings Central bank Of India P1+ Public Sector Under Takings-Total Term Deposits Kotak Mahindra Bank Ltd Term Deposits-Total Net Current Assets/(Liabilities) Grand Total 2.38% 2.34% 67.31% 94.49%

5.48% 5.48% 1.23% 1.23% -1.20% 100%

INTERPRATATION
In the Kotak Balance diversified to equity & equity related stock exchanges are 94.49%, public Sector under Takings are 5.48% & Term Deposits are 1.23%.

Sector Allocation
SECTOR ALLOCATION PERCENTAGE OF RATING

Commercial Paper/certificate of Deposits Software Pharmaceuticals Media & Entertainment Banks Petroleum products Finance Consumer Non Durables Construction project Construction Others

5.48% 10.69% 15.14% 5.55% 14.26 % 9.78% 5.56% 14.51% 4.51% 3.46% 11.06%

PIECHART

INTERPRATATION In Kotak Select Focus Fund major Investments are Construction project are 15.14%, Commercial paper/Certificate of Deposits are 5.48%,Soft Ware 10.69%, Pharmaceuticals is 7.25%, Media & Entertainment is 10.30%, Petroleum products are9.78%,Finance is 5.56% , Consumer Non Durables are 18.91%, construction project are 4.51%,construction is 3.46% ,others are11.06%.

Conclusion
In the Kotak Balance diversified to equity & equity related stock exchanges are 95.37%, Futures Total 0.35% Corporate Debt /Financial Intuitions are 9.32%, public Sector under Takings are 10.93% & Term Deposits are 7.81%. In Kotak Select Focus Fund major Investments are Construction project are 15.14%, Commercial paper/Certificate of Deposits are 5.48%,Soft Ware 10.69%,

Pharmaceuticals is 7.25%, Media & Entertainment is 10.30%, Petroleum products are9.78%,Finance is 5.56% , Consumer Non Durables are 18.91%, construction project are 4.51%,construction is 3.46% ,others are11.06%.

Kotak contra Investment Objective

To generate capital appreciation from a diversified portfolio of equity and equity related securities.

Available Options
Dividend Payout, Dividend Reinvestment Growth

Fund Managers
Mr. Krishna Sanghavi & Mr. Emmanuel Elango.

Loads
Entry Load: Nil. Exit Load:
xix. xx. xxi. For redemptions /switch outs with in 1 year from the date of allotment of units, irrespective of the amount of investment:1% For redemption in case of SIP/STP with in 2 years from the date of allotment of units, irrespective of the amount of investment:1% Where units are allotted upon Reinvestment of Dividends: Nil

Minimum Investment Amount

Initial Investment: Rs.5000 Additional Investment: Rs. 1000 & in multiples Re.1 Ideal investments horizon: 1-3 years Benchmark S&P CNX 500 Inception Date- July 27, 2005
TABLE Performance (%) of Kotak Contra COMPOUNDED KOTAK CONTRA ANNUALISED RETURNS Last 6 Months 6.72 Last 1 year 37.57 Last 3 years 10.24 Since Inception(Nov 25, 15.90 1999) S&P CNX 500 2.12 27.41 6.82 17.01

BARCHART

INTEREPATATION In KOTAK Contra last 6 months, one year, three years, since inception returns are 6.72%,37.57%,10.24%,15.9% and Bench Mark Returns S&P CNX 500 are 2.12%,27.41%,6.82%,17.01% respectively. Here last six months, one year, Three year returns are high when comparing to Bench mark returns. Since inception returns are low when compare to Bench Mark Returns

% of Net Assets Equity and Equity related(Listed Awaiting Listed on Stock Exchange) Reliance Industries Ltd petroleum Products 3.62% Oil & Natural Gas Corporation Ltd Oil 7.27% GlaxoSmithKline Consumer Helathcare Ltd Consumer Non Durables 3.15% Oil & Natural Gas Corporation Ltd Oil 5.18% ITC Ltd Consumer-Non Durables 3.39% Bharat Heavy Electricals Ltd Industrial Capital Goods 3.12% TVS Motors Company Ltd Auto 2.52% Tata Consultancy Services Ltd Soft Ware 2.84% Lupin Ltd Pharmaceuticals 1.98% Amara raja Batteries Auto Ancillaries 2.19% Spicejet Ltd Transportation 2.03% Others 55.31% Listed/Awaiting List on Stock Exchange Total 87.42% Futures United Spirits 2.09% Reliance Infrastructure India bulles Real Estate Ltd Futures(Market Value Represents Notional Value)Total Money Market Instruments Commercial Papers (CP)/Certificate of Deposits(CDS) Public Sector Under Takings Andhra Bank P1+ Oriental Bank Of Commerce P1+ Public Sector Under Takings-Total Term Deposits Kotak Mahindra Bank Ltd Term Deposits-Total Net Current Assets/(Liabilities) Grand Total INTERPRATATION In the Kotak Balance diversified to equity & equity related stock exchanges are 87.42%, Futures Total 5.01% Corporate Debt /Financial Intuitions are 9.32%, public Sector under Takings is 5.24% & Term Deposits are 3.16% 1.88% 1.04% 5.01%

Portfolio of Kotak Contra Issuer/Instrument

Industry/Rating

3.14% 2.10% 5.24% 3.16% 3.16% -0.83% 100%

Sector Allocation
SECTOR ALLOCATION PERCENTAGE OF RATING

Commercial Paper/certificate of Deposits Software Pharmaceuticals Media & Entertainment Banks Industrial Capital Goods Oil Derivatives Auto Consumer Non Durables Others

5.24% 10.24% 5.79% 5.48% 10.04% 5.2% 7.27% 5.01% 3.65% 9.89% 32.19%

PIECHART

INTERPRATATION In Kotak Contra major Investments are others are 32.19%, Commercial paper/Certificate of Deposits are 5.24 %, Soft Ware 10.28 %, Pharmaceuticals is 5.79%, Media & Entertainment is 5.48%,Banks are 10.04%,Industrial Capital goods are 5.20%, oil is 7.27%,Derivatives are 5.01%,Auto is 3.65%, Consumer Non Durables are 9.89%.

Conclusion
In the Kotak Balance diversified to equity & equity related stock exchanges are 95.37%, Futures Total 0.35% Corporate Debt /Financial Intuitions are 9.32%, public Sector under Takings are 10.93% & Term Deposits are 7.81%. In Kotak Contra major Investments are others are 32.19%, Commercial paper/Certificate of Deposits are 5.24 %, Soft Ware 10.28 %, Pharmaceuticals is 5.79%,

Media & Entertainment is 5.48%,Banks are 10.04%,Industrial Capital goods are 5.20%, oil is 7.27%,Derivatives are 5.01%,Auto is 3.65%, Consumer Non Durables are 9.89%.

FINDINGS
In Kotak Opportunities fund one year returns are 32.63%.where the One year returns is in kotak-30 fund are 29.89%.Here we find that Kotak Opportunities is better than Kotak-30

In Kotak Tax Saver fund one year returns are 31.83%.where the One year returns is in kotak Mid-Cap fund are 53.95%.Here we find that Kotak Mid-Cap is better than Kotak-Tax Saver

In Kotak Balance fund one year returns are 23.97%.where the One year returns is in kotak Life Style fund are 34.50%.Here we find that Kotak Life Style is better than Kotak Balance In Kotak Select Focus fund Six Months returns are 5.59%.where the six Months returns is in kotak Contra fund are 6.72%.Here we find that Kotak Contra is better than Kotak Select Focus Fund

The Kotak Equity funds are Managing risk levels at a Reasonable Levels in Comparison with the Debt Funds

Most Of the Customers prefer liquidity before they Choose Particular Fund Scheme

 The Fund Managers Implemented a good blend of Active as well as passive Portfolio Strategies depending upon the market Conditions

Almost all Customers are Satisfied with the Performance of KOTAK MUTUAL FUND SCHEMES.

Almost majority of the Customers Who Visit the KOTAK AMC Ltd VIJAYAWADA are Satisfied with the Customer Service.

SUGGESTIONS
In Kotak-30 Portfolio Turnover Ratio has to improve by the Fund managers using of Proper Utilization of Funds.

Kotak Mutual has to design the products with much flexibility in accordance with investors as well as market

Kotak Equity Schemes are invest in a considerable amount of its investments into defensive sectors so that when market was down its returns couldnt get affected.

Kotak Equity Schemes are find the ways to reduce its present Standard Deviation levels Which can be either changing the present Stock-picking up Approach or varying the investment timings to maintain the lower levels of Standard Devitation

Thus the Company has to make promotions in order to have more sales

 Conduct Training Classes to its Distributors and agents, Which are the major source of sale of mutual Funds with regard to in-debt knowledge of Monthly Income Plan of Kotak Mutual Fund so that, it would be easier for them to educate their Customers

BIBLIOGRAPHY TEXT BOOKS

1. Sharpe & Alexander 2. V.K.Bhalla 1997. 3. Punivarthy Pandian Pvt.Ltd2003. 4. Prasanna Chandra Investment Analysis & Portfolio management Published by Tata Mc-Graw-Hill in 1997. 5. KOTAK MONTHLY FACTSHEETS - Security Analysis & portfolio Management Published byVikas Publishing House Investments Published by Prentice Hall in 1990. Investment Management Published by S.Chand & Company Ltd in

WEBSITES: 1. www.amfiindia.com 2. www.mutualfundsindia.com 3. www.valuereeserchonline.com 4. www.kotakmutual.com 5. www.nseindia.com 6. www.bseindia.com 7. www.google.com