CHAPTER 1 INTRODUCTION

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INTRODUCTION ON MUTUAL FUNDS

Last two decades have witnessed a phenomenal growth in trade and industry the world over. The days are passed when capital used to remain within the boundaries of nations. In this era of globalization and liberalization, technology, capital and other resources are not only crossing the borders of nation but also increasing the volume of international trade. The rapidity with which the concept of corporate finance, bank finance and investment finance have changed in recent years have given birth to new financial products known as Mutual funds. s the name suggests, this is financial instrument that pools the savings of number of investors who share a common financial goal. The money thus collected is invested by the funds manager in different types of securities depending on the ob!ective of the scheme. Mutual funds have become increasingly importance in the world of finance. Mutual funds legally known as "open-ended companies# are sub!ect to regulations set forth by the Investment $ompany ct 1%&', when deciding how to invest. Mutual funds dditionally Mutual are attractive because they re(uire less of investors, as they offer diversification, e)perts talk and bond selection, low cost and preferential ta) treatment. fund as re(uired by the demand. 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 invested by the fund manager in different types of securities depending upon the ob!ective of the scheme. This could range from shares to debentures to money market instruments. The income earned through these investments and the capital appreciations realized by the scheme are shared by its unit holders in proportion to the number of units owned by them. Thus mutual fund is the most suitable investment for the common man as it offers the opportunity to invest in a diversified professionally managed portfolio at a relatively low cost. ny body with an investible surplus of as little as a few thousand rupees can invest in mutual funds. Page + funds do not have a predetermined number of stocks to sell* rather stocks are added to the

mutual fund is the ideal investment vehicle for today,s comple) and modern financial scenario. Markets for e(uity shares, bonds and other fi)ed income instruments, real estate derivatives and other assets have become mature and information driven. typical individual is unlikely to have the knowledge, skills, inclination and time to keep track of events, understand their implications and act speedily. Thus a mutual fund is the sum total of many parts, each of which is designated to perform a specific function. -./I, the market regulator has outlined clearly the role and responsibilities of each entity. 0ow well they function determines, in part, the (uality of your e)perience with the mutual fund. life makes many demands of us. There,s so much to indulge in and deal with. truth that money is a means to many an end. t work or at home. 1ith family, friends or self. 1oven into these threats is the inescapable house in the sub2urbs, good education for the kids, a set of four wheels to zip around and early retirement. The ends might differ but the means 3 at least one of them 3 to reach them remain the same4 money. .arned wisely, saved regularly, and invested smartly. 5eople say that they don,t have the discipline, they don,t understand investing, especially the stock market. They don,t have time and don,t really care. 1ell they should, even if !ust a little. fter all it,s their money and their life and it helps to have their saving working for you. They don,t need to get neck 3 deep in to their personal finances, but the least they can do, and should do, is get a fi) on the big picture. .)plore and understand what they want from their investments, and leave the rest to the money managers4 mutual funds. These investment vehicles don,t demand them to have a deep understanding of financial matters* they don,t even demand oodles of your time.

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OBJECTIVES OF THE STUDY 17 The main purpose is to study whether mutual fund is investor,s best choice or not. +7 The ob!ective of doing this pro!ect is to make a study of various investment schemes in the secondary market. 67 To ascertain the various fluctuation in different sectoral schemes of mutual funds &7 To e)amine mutual funds investment with e(uity shares and also relative to 8ifty and -ense). 97 To assist the community at large in deciding which investment provides best return considering various points at a time. :7 To know how various schemes effect mutual fund investment and its performance taking past records. ;7 To study the performance of selected mutual fund companies and e(uity companies and their performance in 1 year. <7 To reveal the current situation of mutual funds and e(uities as well as inde) in last one year in India .

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SCOPE OF THE STUDY 17 The study covers the concept and details of mutual funds and introduction on e(uity, derivatives and inde). +7 The study also includes returns of e(uity, mutual funds and relative inde) of different sectors. 67 .(uities year high and low is also included in the study. &7 The pro!ect report covers the study of 8et different sectors. 97 The analysis part includes the 8et sset =alue >8 =7 charts which gives the clear sset =alue >8 =7 of mutual funds in

picture of the present value of the mutual fund company. :7 The study includes the information regarding the selection of portfolio for different funds in theory part. ;7 The theory part also includes following information related to mutual fund 4 0istory of mutual funds $oncept of mutual funds 1hy mutual funds 8et sset =alue >8 =7 Types and benefits of mutual funds Trends in mutual funds ?uture scenario 5roblem of mutual fund industry in India.

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RESEARCH METHODOLOGY ll information related to the topic needs to be carefully scrutinized to avoid the risk of biased analysis. 0aving once identified which information is relevant and need to be collected, we will have to define how this will be done. The method employed in the investigation depends on the purpose and scope of the study. Let us try to understand methodology. 1) RESEARCH DESIGN: @esearch design is some statement or specification of procedures for collecting and analyzing the information re(uired for the solution of some specific problem. 0ere the e)ploratory research is used as investigation is mainly concerned with determining the trends and positive and negative returns in different sectors of mutual funds and e(uities. .)ploratory research is generally carried out by three sources of information 7 -tudy of secondary sources /7 Aiscussion with individuals $7 nalyzing some specific areas

2) DATA COLLECTION METHODS4 The key for creating useful system are selectivity in collection of data and linking that selectivity to the analysis and decision issue of the action to be taken. The accuracy of collected data is of great significance for drawing correct and valid conclusions from the investigation. The following are the main steps in data collection process a7 Type of information re(uired in the investigation b7 .stablishing the facts that are available at present and additional facts re(uired. c7 Identification of sources from where the information can be available. d7 -election of appropriate information i.e. collection method.

3) SOURCES OF INFORMATION4 Aata available in marketing research are either primary or secondary. Page :

5rimary data4 primary data are generated in an investigation according to the needs of problem in head. 5rimary data is collected using case study methods. There are some set of Bualitative techni(ues used for collection of some socio economic information about some phenomenon. -econdary data4 -econdary data can be defined as data collected by some one else for purpose other than solving the problem being investigated. -econdary data is collected from e)ternal sources which include information from published material of -./I and some of the information is collected online. The data sources also include various books, !ournals, magazines, news papers, etc. The organization profile is collected from /ranch Manager.

LIMITATIONS 17 .(uity return is not taken from 8-. stock e)change. +7 The data of mutual fund companies and e(uity companies is taken only for 6C : months and 1 year due to non availability of data. 67 Aue to limitation of time all sectors are not studied, only selected sectors have been studied. &7 Aata for mutual funds available on website is day to day basis data. Aata is updated daily. 0ence the data is available as on 61 march +'16. 97 only growth funds are taken. :7 Aue to non availability of data 8-. scrip Tata consultancy information has not taken.

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CHAPTER 2

LITERATURE AND REVIEW

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INTRODUCTION ON MUTUAL FUND The concept of "Mutual fund# is a new feature in the cap of Indian capital market but not to international market. The concept of mutual fund spread to Dfunds have been successfully working in the Dmarket. in the beginning of +'th century and three mutual fund companies were started in 1%+&. Mutual and some western countries. These funds have been useful in filling the gap between the demand and supply of capital in the mutual fund motivates small and big investors to entrust their savings to it so large number of that these are professionally employed in sharing good return.

investors have small savings with them. They can at the most buy shares of one or two companies. 1hen small savings are pooled and entrusted to mutual fund then these can be used to buy blue chips where regular returns and capital appreciation are ensured. ?und is an same thing in merican concept. The terms like investment company, money fund investment trust and mutual funds are used interchangeably and used to describe the merican literature. In /ritish literature mutual funds has not been e)plained but is considered as a synonym of investment trust of D- . DEFINITION & MEANING mutual fund is an investment vehicle for investors, who pool their savings for investing in diversified portfolio of securities with the aim of attractive yields and appreciation in their value. s per mutual fund book published by investment company institute of D-, Mutual fund is a financial service organization that receives money from shareholders, invest it, earns return on it, attempt to make it grow and agree to pay the shareholder cash on demand for the current value of investment -./I >mutual fund7 regulations, 1%%: defines mutual funds as A fund established in the form of a trust to raise monies through the sale of units to the public or a section of public under one or more schemes for investing in securities including money market instruments mutual fund is a special type of institution a trust or an investment company which acts as an investment 3 intermediary and channelises the savings of large number of people to the corporate securities in such a way that investors get a steady return, capital appreciation and low risk

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mutual fund is a trust that pools the savings of a number of investors who wish to start investing but do not have a large amount of capital to work with or who want to take hands of approach and let the professional take all decisions. Mutual funds are basically large funds operated by investment companies and pull money from many different people and then invest according to a certain goal for the fund. This allows for greater diversification than would be possible for a single person with less2than2generous assets and also removes the burden of researching market conditions and constantly ad!usting investments accordingly from the individual. HISTORY OF MUTUAL FUND INDUSTRY The mutual fund industry in India started in 1%:6 with the formation of Dnit Trust of India, at the initiative of the Eovernment of India and @eserve /ank the. The history of mutual funds in India can be broadly divided into four distinct phases FIRST PHASE 3 1%:&2<; Dnit Trust of India >DTI7 was established on 1%:6 by an ct of 5arliament. It was set up by the @eserve /ank of India and functioned under the @egulatory and administrative control of the @eserve /ank of India. In 1%;< DTI was de2 linked from the @/I and the Industrial Aevelopment /ank of India >IA/I7 took over the regulatory and administrative control in place of @/I. The first scheme launched by DTI was Dnit -cheme 1%:&. management. SECOND PHASE 3 1%<;21%%6 >.ntry of 5ublic -ector ?unds7 1%<; marked the entry of non2 DTI, public sector mutual funds set up by public sector banks and Life Insurance $orporation of India >LI$7 and Eeneral Insurance $orporation of India >EI$7. -/I Mutual ?und was the first non2 DTI Mutual ?und established in Fune 1%<; followed by $anara /ank Mutual ?und >Aec <;7, 5un!ab 8ational /ank Mutual ?und > ug <%7, Indian /ank Mutual ?und >8ov <%7, /ank of India >Fun %'7, /ank of /aroda Mutual ?und >Gct %+7. LI$ established its mutual fund in Fune 1%<% while EI$ had set up its mutual fund in Aecember 1%%'. t the end of 1%%6, the mutual fund industry had assets under management of @s.&;,''& crores. THIRD PHASE 3 1%%62+''6 >.ntry of 5rivate -ector ?unds7 1ith the entry of private sector funds in 1%%6, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. lso, 1%%6 was the year in which the Page 1' t the end of 1%<< DTI had @s.:,;'' crores of assets under

first Mutual ?und @egulations came into being, under which all mutual funds, e)cept DTI were to be registered and governed. The erstwhile Hothari 5ioneer >now merged with ?ranklin Templeton7 was the first private sector mutual fund registered in Fuly 1%%6. The 1%%6 -./I >Mutual ?und7 @egulations were substituted by a more comprehensive and revised Mutual ?und @egulations in 1%%:. The industry now functions under the -./I >Mutual ?und7 @egulations 1%%:. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and ac(uisitions. s at the end of Fanuary +''6, there were 66 mutual funds with total assets of @s. 1,+1,<'9 crores. The Dnit Trust of India with @s.&&,9&1 crores of assets under management was way ahead of other mutual funds. FOURTH PHASE 3 since ?ebruary +''6 In ?ebruary +''6, following the repeal of the Dnit Trust of India ct 1%:6 DTI was bifurcated into two separate entities. Gne is the -pecified Dndertaking of the Dnit Trust of India with assets under management of @s.+%,<69 crores as at the end of Fanuary +''6, representing broadly, the assets of D- :& scheme, assured return and certain other schemes. The -pecified Dndertaking of Dnit Trust of India, functioning under an administrator and under the rules framed by Eovernment of India and does not come under the purview of the Mutual ?und @egulations. The second is the DTI Mutual ?und Ltd, sponsored by -/I, 58/, /G/ and LI$. It is registered with -./I and functions under the Mutual ?und @egulations. 1ith the bifurcation of the erstwhile DTI which had in March +''' more than @s.;:,''' crores of assets under management and with the setting up of a DTI Mutual ?und, conforming to the -./I Mutual ?und @egulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. assets over the years. s at the end of -eptember, +''&, there were +% funds, which manage assets of @s.1961'< crores under &+1 schemes. The graph indicates the growth of

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GROWTH IN ASSETS UNDER MANAGEMENT III

8ote4 .rstwhile DTI was bifurcated into DTI Mutual ?und and the -pecified Dndertaking of the Dnit Trust of India effective from ?ebruary +''6. The ssets under management of the -pecified Dndertaking of the Dnit Trust of India has therefore been e)cluded from the total assets of the industry as a whole from ?ebruary +''6 onwards. CONCEPT OF MUTUAL FUND Mutual ?und is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realised are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual ?und 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. The flow chart below describes broadly the working of a mutual fund4

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Mu u!" Fu#$ O%&'! ()# F")* C+!'

ORGANISATION OF A MUTUAL FUND There are many entities involved and the diagram below illustrates the

organisational set up of a mutual fund4

WHY MUTUAL FUNDS LetJs suppose youJre !ust getting started as an investor and have K9,''' to invest and you have three important goals you want to achieve. ?irst, you donJt want to lose your money in a risky venture so you want security, like that found in a certificate of deposit or other fi)ed income investment. /ut you also want to make the most money you can, so you want the prospect for growth potential, too. ?inally, since you donJt have the time or knowledge to actively manage your money, you want professional money management 22 occasionally diversifying your investments into promising new opportunities. That sounds like a very good plan, but where can you invest your money and have a chance to meet all Page 16

three criteriaL $ertificates of deposit and other fi)ed income investments offer security, but often with low rates of interest and a fi)ed potential for growth. Individual stocks may carry greater potential for growth, but K9,''' isnJt a lot to invest and if you put it all in one stock, you risk everything if it performs poorly. nd, brokers and investment advisors can offer you advice and money management, but at a price 22 you pay for their services, which reduces further the amount you have available to invest. More than <' million people, or one out of every two households in merica,

invest in mutual funds. $urrently, over K: trillion is invested in mutual funds. 1hile funds have been around since the 1%+'Js, their popularity over the past +9 years has soared. The reasons4
Mutual

funds make it easy and less costly for investors to satisfy their need for capital growth, income andMor income preservation Mutual funds bring diversification and professional money management to the individual investor mutual fund is a company that pools the money of many investors 22 its shareholders 22 to invest in a variety of different securities. Investments may be in stocks, bonds, money market securities or some combination of these. Those securities are professionally managed on behalf of the shareholders, and each investor holds a pro rata share of the portfolio 22 entitled to any profits when the securities are sold, but sub!ect to any losses in value as well. ?or the individual investor, mutual funds provide the benefit of having someone else manage your investments, take care of record keeping for your account, and diversify your dollars over many different securities that may not be available or affordable to you otherwise. Today, minimum investment re(uirements on many funds are low enough that even the smallest investor can get started in mutual funds. mutual fund, by its very nature, is diversified 22 its assets are invested in many different securities. /eyond that, there are many different types of mutual funds with different ob!ectives and levels of growth potential, furthering your chances to diversify. NET ASSET VALUE Page 1&

The net asset value of the fund is the cumulative market value of the assets fund net of its liabilities. In other words, if the fund is dissolved or li(uidated, by selling off all the assets in the fund, this is the amount that the shareholders would collectively own. This gives rise to the concept of net asset value per unit, which is the value, represented by the ownership of one unit in the fund. It is calculated simply by dividing the net asset value of the fund by the number of units. 0owever, most people refer loosely to the 8 = per unit as 8 =, ignoring the Nper unitN. 1e also abide by the same convention. The price measured per unit is called the 8et asset value 8 = of the unit. Fust as a share or a bond is brought at a price, a mutual fund is bought and sold at its 8 =. If for e)ample u were to invest @s.1'''' in a scheme when its 8 = is @s.1' you will be allotted 1''' units >1''''M1'7 roughly 3the fund charges a nominal processing fee. The 8 = of any scheme tells how much each unit of it is worth at any point in time, and is therefore the simplest measure of how it is performing. units it has issued. scheme,s 8 = is a dynamic figure. The market value of the scheme,s portfolio changes from day to day as prices of shares and bonds move up or down. The number of units outstanding also changes, as new investors come into the scheme and old ones leave. If the 8 = of your schemes rises from @s.1' to @s.1+ over a period of time, your scheme is said to have generated a return of 1' percent. -imilarly if its 8et 8 = falls form @s.1' to @s. %, it is said to have lost 1' percent. ?und houses have to calculate and disclose, the 8 =s of their schemes daily. ?und 8 =s can be easily looked up. 1hile the general dailies give a random listing of schemes, the financial papers are more e)haustive in their coverage. 1hen invested in a scheme, its 8 = is the figure to track, as it (uantifies your returns, and your purchase price will be based on it. @andom listing of schemes, the financial papers random listing TYPES OF MUTUAL FUNDS This section provides descriptions of the characteristics 22 such as investment ob!ective and potential for volatility of your investment 22 of various categories of funds. These descriptions are organized by the type of securities purchased by each fund4 e(uities, fi)ed2income, money market instruments, or some combination of these. scheme,s 8 = is its 8et assets >market value of the securities is owns minus whatever it owes7 divided by the number of

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This table organizes these fund types by how aggressive or conservative they are and by investment ob!ective. /ecause mutual funds have specific investment ob!ectives such as growth of capital, safety of principal, current income or ta)2e)empt income, you can select one fund or any number of different funds to help you meet your specific goals. In general mutual funds fall into these general categories4

.(uity ?unds invest in shares of common stocks. ?i)ed2Income ?unds invest in government or corporate securities which offer fi)ed rates of return.

/alanced ?unds invest in a combination of both stocks and bonds. Money Market ?unds for high stability of principal, li(uidity and income. /ond ?unds, both ta)2e)empt and ta)able funds to generate income. -pecialtyM-ector ?unds to diversify holdings within an industry.

E,u( - Fu#$. ggressive Erowth ?unds W+! +&- (#/&. (#:

These funds seek ma)imum growth of capital with secondary emphasis on dividend or interest income. They invest in common stocks with a high potential for rapid growth and capital appreciation.

/ecause they invest in stocks which can e)perience wide swings up or down, these funds have a relatively low stability of principal. They often invest in the stocks of small emerging growth companies and generally provide low current income because these companies usually reinvest their profits in their businesses and pay small Page 1:

dividends, if any.

ggressive growth funds generally

incur higher risks than growth funds in an effort to secure more pronounced growth. These funds may invest in a broad range of industries or concentrate on one or more industry sectors. -ome use borrowing, short2selling, options and other speculative strategies to leverage their results. Su( !0"& 1)': Investors who can assume the risk of potential loss in value of their investment in the hope of achieving substantial and rapid gains. They are not suitable for investors who must conserve their principal or who must ma)imize current income.

G')* + Fu#$. W+! +&- (#/&. (#: Eenerally invest in stocks for growth rather than current income. Erowth funds are more likely to invest in well2established companies where the company itself and the industry in which it operates are thought to have good long2term growth potential. Erowth funds provide low current income, but the investorJs principal is more stable than it would be in an aggressive growth fund. 1hile the growth potential may be less over the short term, many growth funds have superior long2term performance records. They are less likely than aggressive growth funds to invest in smaller companies which may provide short2term substantial Su( !0"& 1)': gains at the risk of substantial declines. lthough growth funds are more conservative than aggressive growth funds, they are still relatively volatile. They are suitable for growth2oriented investors but not investors who are unable to assume risk or who are dependent on ma)imizing current income from their investments. InternationalMElobal ?unds W+! +&- (#/&. (#: International

funds seek growth through investments

in

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companies outside the Dnited -tates. Elobal funds seek growth by investing in securities around the world, including the Dnited -tates. /oth provide investors with another opportunity to diversify their mutual fund portfolio, since foreign markets do not always move in the same direction as the D.-.

The best way to invest abroad is through mutual funds, rather than direct investment in a foreign security. Most investors are unfamiliar with foreign investment practices and currencies and may not have a clear understanding of how economic or political events can affect foreign securities. n investor in an international mutual fund doesnJt have to worry about trading practices, recordkeeping, time zones or other laws and customs of a foreign country 22 that is all handled by the fundJs money manager. International and global funds can invest in common stocks or bonds of foreign firms and governments. Many international funds invest in a particular country or region of the world. Su( !0"& 1)': 1hile international and global funds offer opportunities for growth and diversification, these types of funds do carry some additional risks over domestic funds and should be carefully evaluated and selected according to the investorJs ob!ectives, timeframe and risk profile. /ecause most international and global funds are considered to be aggressive growth funds or growth funds, investors must be willing to assume the risk of potential loss in value in the hope of achieving substantial gains. They are not suitable for investors who must conserve their principal or ma)imize current income. G')* + !#$ I#2)3& Fu#$. W+! +&- (#/&. (#: Erowth and income funds seek long2term growth of capital as well as current income. The investment strategies used to reach these goals vary among funds

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-ome invest in a dual portfolio consisting of growth stocks and income stocks, or a combination of growth stocks, stocks paying high dividends, preferred stocks, convertible securities or fi)ed2income securities such as corporate bonds and money market instruments. Gthers may invest in growth stocks and earn current income by selling covered call options on their Su( !0"& 1)': portfolio stocks. Erowth and income funds have low to moderate stability of principal and moderate potential for current income and growth. They are suitable for investors who can assume some risk to achieve growth of capital but who also want to maintain a moderate level of current income. F(4&$5I#2)3& Fu#$. W+! +&- (#/&. (#: The goal of fi)ed income funds is to provide high current income consistent with the preservation of capital. Erowth of capital is of secondary importance Income funds that invest primarily in common stocks are classified as e(uity income funds >see ne)t listing7. Those that invest primarily in bonds and preferred stocks are classified as fi)ed2income funds. These funds invest in corporate bonds or government2backed mortgage securities that have a fi)ed rate of return. -ince bond prices fluctuate with changing interest rates, there is some risk involved despite the fundJs conservative nature. 1hen interest rates rise, the market price of fi)ed2income securities declines and so will the value of the income fundsJ investments. $onversely, in periods of declining interest rates, the value of fi)ed2income funds will rise and investors will en!oy capital appreciation as well as income ?i)ed2income funds offer a higher level of current income than money market funds, but a lower stability of principal. They are generally more stable in price than funds that invest in stocks. Page 1%

1ithin the fi)ed2income category, funds vary greatly in their stability of principal and in their dividend yields. 0igh2yield funds, which seek to ma)imize yield by investing in lower2rated bonds of longer maturities, entail less stability of principal than fi)ed2income funds that invest in higher2rated but lower2yielding securities. -ome fi)ed2income funds seek to minimize risk by investing e)clusively in securities whose timely payment of interest and principal is backed by the full faith and credit of the D.-. Eovernment. These include securities issued by the D.-. Treasury, the Eovernment 8ational Mortgage ssociation >NEinnie MaeN securities7, the ?ederal 8ational Mortgage ssociation >N?annie MaesN7 and ?ederal 0ome Loan Mortgage $orporation >N?reddie MacsN7. Su( !0"& 1)': ll are backed by pools of mortgages. ?i)ed2income funds are suitable for investors who want to ma)imize current income and who can assume a degree of capital risk in order to do so. gain, carefully read the prospectus to learn if a fundJs investment policy with respect to yield and risk coincides with your own ob!ectives.

B!"!#2&$6E,u( - I#2)3& 1u#$. W+! +&- (#/&. (#: .(uity income funds seek high current yield by investing primarily in e(uity securities of companies which pay high dividends. Dnlike interest payments on bonds, dividends on e(uity securities can change as companies raise or lower their dividends. -ince yield2oriented stocks are more volatile than comparably rated fi)ed2income securities, e(uity income funds offer less stability of principal than fi)ed2income funds. /alanced Su( !0"& 1)': funds are more evenly invested in e(uities and income securities. /alanced and e(uity income funds are suitable for conservative investors who want high current yield with some growth.

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M)#&- M!'7& Fu#$. W+! +&- (#/&. (#: ?or the cautious investor, these funds provide a very high stability of principal while seeking a moderate to high current income. They invest in highly2li(uid, virtually risk2free, short2term debt securities of agencies of the D.-. Eovernment, banks and corporations and D.-. Treasury /ills. They have no potential for capital appreciation. Ta)2e)empt money market funds invest in securities that provide safety of principal, li(uidity and income e)empt from federal income ta)es by investing in short2term, high2rated municipal obligations. /ecause of their short2term investments, money market mutual funds are able to keep a constant share price* only the yield fluctuates. Therefore, they are an attractive alternative to bank accounts. 1ith yields that are generally competitive with 22 and usually somewhat higher than 22 yields on bank certificates of deposit >$As7, they offer several advantages4

Money can be withdrawn any time without penalty. Money market funds also offer check writing privileges. lthough not insured by the ?AI$ or ?-LI$, money market funds invest only in highly2li(uid, short2term, top2 rated money market instruments.

Money market funds are suitable for conservative investors who want high stability of principal and moderate current income with immediate li(uidity.

Su( !0"& 1)': Money market funds are suitable for conservative investors who want high stability of principal and moderate current income with Page +1

immediate li(uidity.

Mu#(2(%!" B)#$ Fu#$. W+! +&- (#/&. (#: NMuniN bond funds provide higher ta)2e)empt income than ta)2 e)empt money market funds by investing in longer2maturity >and often lower2rated7 securities, which generally offer higher yields than the short2term, high2rated securities in which ta)2e)empt money market funds invest Municipal bond funds vary greatly in the (uality and maturity of the municipal bonds they invest in. The longer the maturity, the higher the yield. lso, the lower the credit rating of the issuer, the greater the risk and the higher the yield 1hile municipal bond funds generally provide lower yields than income funds with debt obligations of similar maturities and ratings, for an investor in a high marginal ta) bracket the after2ta) yields of municipal bond funds will be higher. The price and yield of municipal bond funds will fluctuate moderately with interest rates. s interest rates decline, the value of principal increases while yield decreases* as rates increase, bond prices decline but Su( !0"& 1)': yields increase. -uitable for investors in medium to higher ta) brackets who want

current income free from federal income ta). D)u0"& & T'(%"& T!45E4&3% B)#$ Fu#$. W+! +&- (#/&. (#: These bond funds provide the investor with an even greater ta) advantage by investing in municipal bonds of a single state. Triple ta)2e)empt funds are e)empt from income ta) in a specific city. Thus they generate income e)empt from not only federal income ta) but also from state andMor city income ta) for residents of those !urisdictions. Like all bond funds, the value of the shares will fluctuate with interest rates, as will the current yield. lso, the stability of principal and yield levels vary with the (uality and Page ++

maturity length of the bonds in which the funds invest. Lack of geographic diversification increases credit risk of these funds Su( !0"& 1)': compared with national funds. These funds are suitable for investors in medium to high ta) brackets in high ta) states who want income with ma)imum e)emption from ta)es.

S%&2(!" -6S&2 )' Fu#$. W+! +&- (#/&. (#: These funds invest in securities of a specific industry or sector of the economy such as health care, high technology, leisure, utilities or precious metals /ecause such funds invest primarily in one sector, they do not offer the element of downside risk protection found in mutual funds that invest in a broad range of industries. 0owever, the funds do enable investors to diversify holdings among many companies within an industry, a more conservative approach than investing directly in one particular company -ector funds offer the opportunity for sharp capital gains in cases where the fundJs industry is Nin favorN but also entail the risk of capital losses when the industry is out of favor 1hile sector funds restrict holdings to a particular industry, other specialty funds such as inde) funds give investors a broadly2 diversified portfolio and attempt to mirror the performance of various market averages. Inde) funds generally buy shares in all the companies composing the -C5 9'' -tock Inde) or other broad stock market indices sset allocation funds move funds among a variety of markets and instruments in response to the fund managerJs view of relative

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market prospects. They are broadly diversified and sometimes have higher management fees since there may be a variety of securities in the portfolio. These funds are suitable for investors who can tolerate a moderate to high degree of risk, are seeking capital appreciation and to whom dividend income is secondary in importance. nd whatever the instruments, social responsibility funds apply moral and ethical as well as economic principles in Su( !0"& 1)': the selection of securities. -pecialty funds are suitable for investors seeking to invest in a particular industry who can monitor industry performance regularly and alter investment strategies accordingly. Investors must be willing to assume the risk of potential loss in value of their investment in the hope of achieving substantial gains. They are not suitable for investors who must conserve their principal or ma)imize current income. BENEFITS OF MUTUAL FUNDS 1) P')1&..()#!" I#/&. 3&# M!#!8&3&# : /y pooling the funds of thousands of investors, mutual funds provide full2time, high2level professional management that few individual investors can afford to obtain independently. -uch management is vital to achieving results in todayJs comple) markets. Oour fund managersJ interests are tied to yours, because their compensation is based not on sales commissions, but on how well the fund performs. These managers have instantaneous access to crucial market information and are able to e)ecute trades on the largest and most cost2 effective scale. In short, managing investments is a full2time !ob for professionals. 2) D(/&'.(1(2! ()#: Mutual funds invest in a broad range of securities. This limits investment risk by reducing the effect of a possible decline in the value of any one security. Mutual fund shareowners can benefit from diversification techni(ues usually available only to investors wealthy enough to buy significant positions in a wide variety of securities. 3) L)* C). : If you tried to create your own diversified portfolio of 9' stocks, youJd need at least K1'',''' and youJd pay thousands of dollars in commissions to assemble your portfolio. mutual fund lets you participate in a diversified portfolio for as little Page +&

as K1,''', and sometimes less. charges to own them.

nd if you buy a no2load fund, you pay or no sale

9) C)#/&#(&#2& !#$ F"&4(0("( -: Oou own !ust one security rather than many, yet en!oy the benefits of a diversified portfolio and a wide range of services. ?und managers decide what securities to trade, clip the bond coupons, collect the interest payments and see that your dividends on portfolio securities are received and your rights e)ercised. ItJs easy to purchase and redeem mutual fund shares, either directly online or with a phone call. :) ;u(27< P&'.)#!"(=&$ S&'/(2&: Most funds now offer e)tensive websites with a host of shareholder services for immediate access to information about your fund account. Gr a phone call puts you in touch with a trained investment specialist at a mutual fund company who can provide information you can use to make your own investment choices, assist you with buying and selling your fund shares, and answer (uestions about your account status. >) E!.& )1 I#/&. (#8: Oou may open or add to your account and conduct transactions or business with the fund by mail, telephone or bank wire. Oou can even arrange for automatic monthly investments by authorizing electronic fund transfers from your checking account in any amount and on a date you choose. companies featured at this site allow account transactions online. ?) T) !" L(,u($( -< E!.- W( +$'!*!": Oou can easily redeem your shares anytime you need cash by letter, telephone, bank wire or check, depending on the fund. Oour proceeds are usually available within a day or two. <) L(1& C-2"& P"!##(#8: 1ith no2load mutual funds, you can link your investment plans to future individual and family needs 22 and make changes as your life cycles change. Oou can invest in growth funds for future college tuition needs, then move to income funds for retirement, and ad!ust your investments as your needs change throughout your life. 1ith no2load funds, there are no commissions to pay when you change your investments. @) M!'7& C-2"& P"!##(#8: ?or investors who understand how to actively manage their portfolio, mutual fund investments can be moved as market conditions change. Oou Page +9 lso, many of the

can place your funds in e(uities when the market is on the upswing and move into money market funds on the downswing or take any number of steps to ensure that your investments are meeting your needs in changing market climates. word of caution4 since it is impossible to predict what the market will do at any point in time, staying on course with a long2term, diversified investment view is recommended for most investors. 1A) I#/&. )' I#1)'3! ()#: -hareholders receive regular reports from the funds, including details of transactions on a year2to2date basis. The current net asset value of your shares >the price at which you may purchase or redeem them7 appears in the mutual fund price listings of daily newspapers. Oou can also obtain pricing and performance results for the all mutual funds at this site, or it can be obtained by phone from the fund. 12) P&'()$(2 W( +$'!*!".: If you want steady monthly income, many funds allow you to arrange for monthly fi)ed checks to be sent to you, first by distributing some or all of the income and then, if necessary, by dipping into your principal. 12) D(/($&#$ O% ()#.: Oou can receive all dividend payments in cash. Gr you can have them reinvested in the fund free of charge, in which case the dividends are automatically compounded. This can make a significant contribution to your long2 term investment results. 1ith some funds you can elect to have your dividends from income paid in cash and your capital gains distributions reinvested. 13) Au )3! (2 D('&2 D&%).( : Oou can usually arrange to have regular, third2party payments 22 such as -ocial -ecurity or pension checks 22 deposited directly into your fund account. This puts your money to work immediately, without waiting to clear your checking account, and it saves you from worrying about checks being lost in the mail. 19) R&2)'$7&&%(#8 S&'/(2&: 1ith your own portfolio of stocks and bonds, you would have to do your own recordkeeping of purchases, sales, dividends, interest, short2term and long2term gains and losses. 1:) S!1&7&&%(#8: 1hen you own shares in a mutual fund, you own securities in many companies without having to worry about keeping stock certificates in safe deposit Page +:

bo)es or sending them by registered mail. Oou donJt even have to worry about handling the mutual fund stock certificates* the fund maintains your account on its books and sends you periodic statements keeping track of all your transactions. 1>) R& ('&3&# !#$ C)""&8& P"!#.: Mutual funds are well suited to Individual @etirement ccounts and most funds offer I@ 2approved prototype and master plans and &'1>k7 for individual retirement accounts >I@ s7 and Heogh, &'6>b7, -.52I@

retirement plans. ?unds also make it easy to invest 22 for college, children or other long2term goals. Many offer special investment products or programs tailored specifically for investments for children and college. 1?) O#"(#& S&'/(2&.: The internet provides a fast, convenient way for investors to access financial information. host of services are available to the online investor including direct access to no2load companies. 1B) S*&&% A22)u# .: 1ith many funds, if you choose not to reinvest your stock or bond fund dividends, you can arrange to have them swept into your money market fund automatically. Oou get all the advantages of both accounts with no e)tra effort. 1@) A..& M!#!8&3&# A22)u# .: These master accounts, available from many of the larger fund groups, enable you to manage all your financial service needs under a single umbrella from unlimited check writing and automatic bill paying to discount brokerage and credit card accounts. 2A) M!'8(#: -ome mutual fund shares are marginable. Oou may buy them on margin or use them as collateral to borrow money from your bank or broker. $all your fund company for details. MARCET TRENDS lone DTI with !ust one scheme in 1%:&, now competes with as many as &'' odd products and 6& players in the market. In spite of the stiff competition and losing market share, DTI still remains a formidable force to reckon with. Last si) years have been the most turbulent as well as e)iting ones for the industry. 8ew players have come in, while others have decided to close shop by either selling off or merging with others. 5roduct innovation is now passP with the game Page +;

shifting to performance delivery in fund management as well as service. Those directly associated with the fund management industry like distributors, registrars and transfer agents, and even the regulators have become more mature and responsible. The industry is also having a profound impact on financial markets. 1hile DTI has always been a dominant player on the bourses as well as the debt markets, the new generation of private funds which have gained substantial mass are now seen fle)ing their muscles. ?und managers, by their selection criteria for stocks have forced corporate governance on the industry. /y rewarding honest and transparent management with higher valuations, a system of risk2reward has been created where the corporate sector is more transparent then before. ?unds have shifted their focus to the recession free sectors like pharmaceuticals, ?M$E and technology sector. ?unds performances are improving. ?unds collection, which averaged at less than @s1''bn per annum over five2year period spanning 1%%62%< doubled to @s+1'bn in 1%%<2%%. In the current year mobilization till now have e)ceeded @s6''bn. Total collection for the current financial year ending March +''' is e)pected to reach @s&9'bn. 1hat is particularly noteworthy is that bulk of the mobilization has been by the private sector mutual funds rather than public sector mutual funds. Indeed private M?s saw a net inflow of @s. ;<1%.6& crore during the first nine months of the year as against a net inflow of @s.:'&.&' crore in the case of public sector funds. Mutual funds are now also competing with commercial banks in the race for retail investor,s savings and corporate float money. The power shift towards mutual funds has become obvious. The coming few years will show that the traditional saving avenues are losing out in the current scenario. Many investors are realizing that investments in savings accounts are as good as locking up their deposits in a closet. The fund mobilization trend by mutual funds in the current year indicates that money is going to mutual funds in a big way. The collection in the first half of the financial year 1%%%2+''' matches the whole of 1%%<2%%. India is at the first stage of a revolution that has already peaked in the D.-. The D.-. boasts of an sset base that is much higher than its bank deposits. In India, mutual Page +<

fund assets are not even 1'Q of the bank deposits, but this trend is beginning to change. @ecent figures indicate that in the first (uarter of the current fiscal year mutual fund assets went up by 1+9Q whereas bank deposits rose by only 1;Q. >-ource4 Thinktank, The ?inancial .)press -eptember, %%7 This is forcing a large number of banks to adopt the concept of narrow banking wherein the deposits are kept in Eilts and some other assets which improves li(uidity and reduces risk. The basic fact lies that banks cannot be ignored and they will not close down completely. Their role as intermediaries cannot be ignored. It is !ust that Mutual ?unds are going to change the way banks do business in the future. COMPARISON OF BANCS< MUTUAL FUNDS< E;UITY & DERIVATIVES

BANCS

MUTUAL FUNDS /etter Low

E;UITY

DERIVATIVES

@eturns

Low

/etter Low

/etter Low

dministrati 0igh ve e)p. @isk Low

Moderate More

0igh More

0igh Less

Investment Less options 8etwork 0igh penetration

Low improving /etter Transparent

but0igh penetration 0igh penetration

Li(uidity Buality assets

t a cost of8ot transparent

/etter Transparent

/etter 2

Minimum balance between 1'th. C 6'th..veryday Interest calculation Gf every month

Euarantee

Ma)imum @s.1 lakh8one on deposits

Page +%

RECENT TRENDS IN MUTUAL FUND INDUSTRY The most important trend in the mutual fund industry is the aggressive e)pansion of the foreign owned mutual fund companies and the decline of the companies floated by nationalized banks and smaller private sector players. Many nationalized banks got into the mutual fund business in the early nineties and got off to a good start due to the stock market boom prevailing then. These banks did not really understand the mutual fund business and they !ust viewed it as another kind of banking activity. ?ew hired specialized staff and generally chose to transfer staff from the parent organizations. The performance of most of the schemes floated by these funds was not good. -ome schemes had offered guaranteed returns and their parent organizations had to bail out these M$s by paying large amounts of money as the difference between the guaranteed and actual returns. The service levels were also very bad. Most of these M$s have not been able to retain staff, float new schemes etc. and it is doubtful whether, barring a few e)ceptions, they have serious plans of continuing the activity in a ma!or way. The e)perience of some of the M$s floated by private sector Indian companies M$ business is a business, which

was also very similar. They (uickly realized that the

makes money in the long term and re(uires deep2pocketed support in the intermediate years. -ome have sold out to foreign owned companies, some have merged with others and there is general restructuring going on. The foreign owned companies have deep pockets and have come in here with the e)pectation of a long haul. They can be credited with introducing many new practices such as new product innovation, sharp improvement in service standards and disclosure, usage of technology, broker education and support etc. In fact, they have forced the industry to upgrade itself and service levels of organizations like DTI have improved dramatically

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SELECTING FUNDS FOR YOUR PORTFOLIO The chart below can be used to identify the types of funds best suited to your particular investment ob!ectives. @efer to it as you begin to formulate your portfolio. If Oour /asic Oou 1ant The These ?unds Invest 5otential Gb!ective Is ?ollowing 5rimarily In $apital ?und Type ppreciation Ma)imum $apital Erowth ggressive Erowth International Erowth 0igh $apital -pecialtyM Erowth -ector International $urrent Income $apital Erowth C Erowth Income $ommon stocks C with potential for Moderate high dividends and capital appreciation Moderate Moderate to 0igh $ommon stocks 0igh to =ery with long2term =ery Low 0igh 0igh growth potential $ommon stocks with potential for very rapid growth. =ery 0igh May employ certain aggressive strategies 5otential $urrent Income 5otential @isk

=ery Low

0igh to =ery 0igh

0igh $urrent Income

?i)ed Income /oth high2dividend2 paying stocks and =ery Low .(uity Income bonds

0igh to Low to =ery 0igh Moderate Moderate to 0igh

$urrent Eeneral Income C Money market Money Market 8one 5rotection of instruments ?unds 5rincipal Ta)2?ree -hort2term Income C Ta)2.)empt municipal notes and 8one 5rotection of Money Market bonds 5rincipal $urrent D.-. Income C Eovernment Ma)imum Money Market -afety of D.-.Treasury and 8one agency issues guaranteed by the D.-. Eovernment

=ery Low

Moderate to 0igh Moderate to 0igh

Low Low

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5rincipal

FUTURE SCENARIO The asset base will continue to grow at an annual rate of about 6' to 69 Q over the ne)t few years as investor,s shift their assets from banks and other traditional avenues. -ome of the older public and private sector players will either close shop or be taken over. Gut of ten public sector players five will sell out, close down or merge with stronger players in three to four years. In the private sector this trend has already started with two mergers and one takeover. 0ere too some of them will down their shutters in the near future to come. /ut this does not mean there is no room for other players. The market will witness a flurry of new players entering the arena. There will be a large number of offers from various asset management companies in the time to come. -ome big names like ?idelity, 5rincipal, and Gld Mutual etc. are looking at Indian market seriously. Gne important reason for it is that most ma!or players already have presence here and hence these big names would hardly like to get left behind. The mutual fund industry is awaiting the introduction of derivatives in India as this would enable it to hedge its risk and this in turn would be reflected in its 8et =alue >8 =7. -./I is working out the norms for enabling the e)isting mutual fund schemes to trade in derivatives. Importantly, many market players have called on the @egulator to initiate the process immediately, so that the mutual funds can implement the changes that are re(uired to trade in Aerivatives. PROBLEMS & PROSPECTS OF MUTUAL FUNDS sset

Page 6+

1) W')#8 %).( ()#(#8 : The mutual funds in India have been (uite wrongly promoted as an alternative to e(uity industry. Thus creating very high e)pectations in the minds of the investors. In a falling market, these e)pectations have been belied. Gnly the pure e(uity schemes can be compared with the stock market inde). 0owever pure e(uity schemes are few in India, further, investment is not purely linked to a particular inde). Therefore returns form mutual funds cannot really be compared with stock market inde). 2) L(3( &$ %')$u2 '!#8&: Indian mutual funds have remained centered around a limited product range basically income, income2cum2growth and ta) saving schemes. .fforts to develop and e)pand the market through innovative new products have been negligible. These have happened due to the tendency to avoid risk, inability to understand future market developments, and change in investor preference. Therefore the e)tent of mutual funds market has remained limited. 3) C)#1u.&$ 3!'7& .( u! ()#: probably the introduction and implementation of new regulatory norms has contributed in some measure to market sluggishness, as the emerging market was, initially, not able to respond to the regulatory ob!ectives. 9) A0.&#2& )1 I##)/! (/& M!'7& (#8 N& *)'7: The absence of product diversification and a confused market situation has been made worse by the absence of an innovative marketing network for mutual funds. The agent oriented network has largely been failure because most of the agents have not been specifically trained to sell mutual funds products, :) L!27 )1 !$&,u! & '&.&!'2+ (#1'!. 'u2 u'&: the passive approach of some mutual funds in managing investor,s funds is compounded by the lack of ade(uate research infrastructure. $onse(uently, returns commensurate with the market movement could not be realized by many schemes, which has tended to show up Indian mutual funds in a bad light. >) I#&11(2(&# 3!#!8&3&# : Management is considered to be a key factor for the operational efficiency of any business venture. This factor becomes even more crucial for service ventures such as mutual funds. 1hat mutual funds re(uire are managers who have a clear understanding of prevailing and emerging market potential, investor preference and macro economic fundamentals. Page 66

?) L!27 )1 (#/&. )'D. &$u2! ()#4 The market success of any new product particularly a financial product depends largely on its acceptance by consumers, in this case investors. Mutual funds must undertake a well design and comprehensive program of investor education especially aimed at investors in rural and semi2urban areas. 0owever this has been mostly neglected in India. B) L!27 )1 3&$(! .u%%)' : investors understanding about mutual funds product and it feature must be increased as it was found to be very low so far. This problem re(uires (uick and structured attention. This can be solved with effective use of media. positive media support is also re(uired and mutual funds need to be media friendly. very closer coordination between investor education in India. @) I8#)'!#2& )1 "(,u($( - 3!#!8&3&# : over emphasis on asset management has often ignored the crucial importance of liability management in mutual funds, leading many Indian funds into a li(uidity trap at the time of redemption. approach needs to be adopted by the funds. 1A) R(.7 3!#!8&3&# (8#)'&$: Aerivatives have been widely used by the mutual funds as a measure of risk management as a comple) and competitive market place. ?urther the practice of stock lending, used widely in the western market has induced efficiency in funds management a regulatory environment for mutual funds need to encouraged this practices in India. INTRODUCTION ON E;UITY SHARES .(uity is a term commonly used to describe the ordinary share capital of the business. Grdinary share in the e(uity capital of the business entitle the holders to all distributed profits after the holders of debentures and preference shares have been paid. Grdinary shares are issued to the owners of the company. It is important to understand the market values of company,s shares have little relationship to their nominal or face value. The market value of the company share is determined by the price another investor is prepared to pay for them. In the case of publicly (uoted companied, this is reflected in the market value of the ordinary shares traded on the stock e)change. In case of privately owned companies, where there is unlikely to be much trading in shares, market value is more scientific M?I, mutual funds and the media to promote

Page 6&

often determined when the business is sold or when the minority share holding is valued for ta)ation purpose. Aiffered ordinary shares are a form of ordinary shares which are entitled to a dividend only after a certain date or only if profits rise above a certain amount. =oting rights might also differ from those attach to other ordinary shares. ?inancing a company through the sale of stock in accompany is known as e(uity financing. lternatively debt financing can be done to avoid giving up shares of ownership of the company. .(uity financing are usually used for longer term investment pro!ects such as investment in a new factory or a new foreign market. .(uity investment generally refers to the buying and holding of shares of stock on a stock market by individuals and funds in anticipation of income from dividends and capital gain as the value of stock rises. It also sometimes refers to the ac(uisition of e(uity >ownership7 participation in a private >unlisted7 company or a start up. > company being created or newly created7. 1hen the investment is in infant companies it is refer to as venture capital investing and is generally understood to be higher risk than investment in listing, going concern situations. ON INDEE INTRODUCTION -tock market talk is everywhere, from T.= and radio, to the newspapers and the web. /ut what does it meanL 1hen people say that "the market turned a great performance today#. "1hat is the market anywayL# s it turns out, when most people talk about "the market# they are actually referring to an inde). 1ith the growing importance of the stock market in our society the names of inde)es such as - C 5 9'', 8I?TO, and -.8-.R have become part of our every vocabulary. Inde) can be defined as "a statistical measure of changes in the portfolio of stocks representing the portion of the overall market.# It would be difficult to track every single security trading in the country. To get around this we take a smaller sample of the market that is representative of the whole. Thus, !ust a pollster,s use a political survey to gauge the sentiment of population, the investors use inde)es to track the performance of the stock market. Ideally change in price of an inde) would represent and e)actly proportionate change in the stocks included in the inde). Page 69

Inde)es are great tools for telling us what direction the market is taking, what trends are prevailing. " n inde) is a number use to represent the changes in a set of values between a base time period and another time period# stock inde) is number that helps you measure the levels of the market. Most stock inde)es attempt to be pro)ies for the market they e)ist in. returns on the inde) are thus supposed to represent the returns on the market i.e the returns that u could get if u had the entire market in your portfolio.

CHAPTER 3

INDUSTRY PROFILE

Page 6:

Mu u!" Fu#$. I#$u. '- (# I#$(! The origin of mutual fund industry in India is with the introduction of the concept of mutual fund by DTI in the year 1%:6. Though the growth was slow, but it accelerated from the year 1%<; when non2DTI players entered the industry.

In the past decade, Indian mutual fund industry had seen dramatic improvements, both (uality wise as well as (uantity wise. /efore, the monopoly of the market had seen an ending phase* the ssets under Management > DM7 was @s. :;bn. The private sector entry to the fund family rose the DM to @s. &;' bn in March 1%%6 and till pril +''&, it reached the height of 1,9&' bn.

5utting the DM of the Indian Mutual ?unds Industry into comparison, the total of it is less than the deposits of -/I alone, constitute less than 1+Q of the total deposits held by the Indian banking industry.

The main reason of its poor growth is that the mutual fund industry in India is new in the country. Large sections of Indian investors are yet to be intellectuated with the concept. 0ence, it is the prime responsibility of all mutual fund companies, to market the product correctly abreast of selling.

Page 6;

The mutual fund industry can be broadly put into four phases according to the development of the sector. .ach phase is briefly described as under.

F('. P+!.& 5 1@>95B?

Dnit Trust of India >DTI7 was established on 1%:6 by an ct of 5arliament. It was set up by the @eserve /ank of India and functioned under the @egulatory and administrative control of the @eserve /ank of India. In 1%;< DTI was de2linked from the @/I and the Industrial Aevelopment /ank of India >IA/I7 took over the regulatory and administrative control in place of @/I. The first scheme launched by DTI was Dnit -cheme 1%:&. t the end of 1%<< DTI had @s.:,;'' cores of assets under management. S&2)#$ P+!.& 5 1@B?51@@3 FE# '- )1 Pu0"(2 S&2 )' Fu#$.) .ntry of non2DTI mutual funds. -/I Mutual ?und was the first followed by $an bank Mutual ?und >Aec <;7, 5un!ab 8ational /ank Mutual ?und > ug <%7, Indian /ank Mutual ?und >8ov <%7, /ank of India >Fun %'7, /ank of /aroda Mutual ?und >Gct %+7. LI$ in 1%<% and EI$ in 1%%'. The end of 1%%6 marked @s.&;, ''& as assets under management. T+('$ P+!.& 5 1@@352AA3 FE# '- )1 P'(/! & S&2 )' Fu#$.) 1ith the entry of private sector funds in 1%%6, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. lso, 1%%6 was the year in which the first Mutual ?und @egulations came into being, under which all mutual funds, e)cept DTI were to be registered and governed. The erstwhile Hothari 5ioneer >now merged with ?ranklin Templeton7 was the first private sector mutual fund registered in Fuly 1%%6. The 1%%6 -./I >Mutual ?und7 @egulations were substituted by a more comprehensive Page 6<

and revised Mutual ?und @egulations in 1%%:. The industry now functions under the -./I >Mutual ?und7 @egulations 1%%:.

The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and ac(uisitions. s at the end of Fanuary +''6, there were 66 mutual funds with total assets of @s. 1, +1,<'9 corers. The Dnit Trust of India with @s.&&,9&1 corers of assets under management was way ahead of other mutual funds. F)u' + P+!.& 5 .(#2& F&0'u!'- 2AA3 This phase had bitter e)perience for DTI. It was bifurcated into two separate entities. Gne is the -pecified Dndertaking of the Dnit Trust of India with DM of @s.+%, <69 crores >as on Fanuary +''67. The -pecified Dndertaking of Dnit Trust of India, functioning under an administrator and under the rules framed by Eovernment of India and does not come under the purview of the Mutual ?und @egulations. The second is the DTI Mutual ?und Ltd, sponsored by -/I, 58/, /G/ and LI$. It is registered with -./I and functions under the Mutual ?und @egulations. 1ith the bifurcation of the erstwhile DTI which had in March +''' more than @s.;:,''' crores of DM and with the setting up of a DTI Mutual ?und, conforming to the -./I Mutual ?und @egulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. s at the end of -eptember, +''&, there were +% funds, which manage assets of @s.1961'< crores under &+1 schemes. T+& 3!G)' %"!-&'. (# +& I#$(!# Mu u!" Fu#$ I#$u. '- !'&:

Page 6%

GROWTH

IN

ASSETS

UNDER

MANAGEMENT

Cu''&# S2&#!'()

-ince private players were allowed in 1%%6, the Indian Mutual fund industry has 1itnessed a sea change in the way it operates, in the regulatory and investor attitude Towards Mutual fund products. ?rom a single player in 1%<; today there are +% mutual

Page &'

?unds offering as many as &;; schemes. The total assets under management have risen to @s 1%9;<& corers. 0owever, the accolades regarding the growth of the M? industry -hould be reserved until this growth is analyzed taking the M? industry in other Aeveloped countries in consideration. 0ere are certain statistics that reflect that Indian Mutual fund industry still has a long S AUM as a ercentage of !" 4 In most of the developed countries the total ssets under management ranges from 6'Q 2:'Q of the EA5. Total assets under Management are only <Q of the EA5 in case of India.

S enetration of Mutual funds4 In India it is estimated that :.;Q of the households 0old mutual funds. This figure is close to 9'Q in case of the D- and 1;Q in case Gf DH. Mutual funds account for only '.;6Q of total financial assets in India >1+Q of bank deposits7. DM for Mutual funds had e)ceeded the bank deposits In D- in as early as 1%%<. These are only some of the statistics that show that the Indian mutual funds industry is -till in its infancy. It is important to study the present industry scenario to gain a better understanding of the impediments to the growth of the industry4 S L!27 )1 I#/&. )' A*!'&#&..4 @etail investors had a wrong notion about mutual ?unds as an investment avenue. The benefits of risk diversification, professional Management and ease of administration involved while investing in mutual funds re not clearly understood. Hnowledge of financial products is ingrained in school nd college curriculum in countries likes DH, D- and ?rance. S I#/&. )' R(.7 A%%& ( &4 .(uity funds account for 6'Q of the total DM in India. This figure is more than 9'Q in most developed countries. ?re(uent stock market -cams and the bust of tech sector specific M?s have contributed to this pprehension. The growth in mutual funds has come through the growth in Page &1

Investments in short term instrument like Money Market Mutual ?unds which ccount for &'Q h(8+&' R& u'#. )1 A" &'#! (/& D&0 I#. 'u3&# . 4 Eovernment guaranteed -chemes provide risk free returns at competitive rates of returns. This is why Mutual funds have difficulty competing retail business.

S C)#2&# '! ()# )1 C)'%)'! & I#/&. )'.4 Mutual funds have become overly ttractive to corporate investors because of higher returns than bank deposits and bility to distribute capital gains ta). $orporate investors account for 9;Q of the DM >by value7. Though the turnover rates have increased the average fund in Management has grown by only +9Q in the past & years. It is clear that the lack of Erowth in funds under management in India is because of the absence of long Term investors. $orporate investors take profits fre(uently resulting in destruction In the compound growth in funds under management. Aistributors are forced to 5ass on more commissions to companies, while fund companies are compelled to Gffer funds with wafer thin margins. @etail investors lose out in the sense that They continue to pay higher e)penses. S D(. '(0u ()#4 Gne of the ma!or factors impacting the growth of mutual fund Industry is the absence of any regulation in distribution of mutual funds. Mutual ?und investors need distributors who are able to inform them about the efficacy of Aistribution product for a particular risk profile and stage in life cycle. Lack of Aistributor awareness and the absence of any disclosures from distributors make Miss selling of M? products commonplace. lso penetration in rural areas is a 5roblem. Gnly 6Q of rural households own mutual funds. ?or mutual funds to set

Page &+

up a distribution network in these centers can be very e)pensive

DM. 1ay to go when

compared to gloIn many countries, mutual fund industry sees a point of inflection, a point after which the DM increases spectacularly after a period of sluggish growth. This happened in case of D- after 1%%+2%6 when the DM increased from K1 trillion to K;.6 trillion in +''&. Many -tudies have revealed that this period of growth corresponds to following factors4

S #$plosive growth in capital markets S A sound system of regulation S %ncrease in investor awareness /-. has witnessed a phenomenal rise in the last + years >market cap has more than Aoubled in the past + years7 (uestion thus arises4 &as %ndia reached its point of

%nflection after which the mutual fund industry will witness a phenomenal growth' (hat Are the improvements in mutual fund industry )regulation, investor awareness, depth' "istribution etc* re+uired to stimulate such rapid growth' /efore answering these Buestions let us compare the Indian Mutual fund industry with global standards and nalyze the areas in which the industry could learn from precedents abroad. C)3%!'(.)# )1 I#$(!# MF I#$u. '- *( + G")0!" S !#$!'$. The first mutual fund was established in the year 1%+& in D-. Like any other product they 1ent through a life cycle e)periencing sluggish growth between 1%6' 3 1%;'s and then 1itnessed rapid growth from 1%%'s onwards. The total worldwide DM was K1:.6 Trillion in +''&2 '9. brief comparison of Indian M? industry with Elobal M?

n industry >citing e)amples of D- and .D countries7 is presented below4 T-%&. )1 P')$u2 .4 Indian funds do not offer products that cater to entire life cycle of an Investor. Mutual funds in D- offer products that cater to diverse needs of investors

Page &6

@anging from purchase of investing in commodities and real estate do not e)ist in India. n important factor that 0as led to growth in Mutual fund industry in D- is the presence of pension. . s mericans began to pay attention to their own retirement plans through company sponsored @etirement schemes, called N&'1>k7N plans, mutual funds started being looked Dpon as a smart option. R&8u"! ()#4 The mutual fund industry is one of the most regulated industries in the ?inancial sector. The M? industry in D- has been plagued by many scandals and -.$ has cted fast to restore investor confidence and trust. ?ines to the tune of K1.9 billion have /een levied. Though allegations regarding frauds have surfaced in Indian M? industry lso -./I has been (uick to investigate and restore confidence. 0owever, certain issues @egarding -./I still e)ist S Dnlike its merican counterpart -./I hasn,t been able to formulate regulations to Increase the depth of M?s. S @egulations regarding the privatization of 5ension funds took a long time to $ome. S -./I hasn,t been able to educate investor on the usage of mutual funds as Investment options. R(.7 M!#!8&3&# T&2+#(,u&.4 recent survey by 51$ revealed that as many as 9'

5ercent of the respondent mutual funds are not managing risk properly. 9' percent of the @espondents did not even have documented risk procedures or dedicated risk managers. Indian Mutual fund industry does not use statistical techni(ues of risk management but is Dsing diversification effectively within the market limitations. derivatives s far as use of

Page &&

is concerned, they are not presently used because of the low volumes, low li(uidity an douse, car etc to admission in university. Mabsence of sufficient hedging products in the market @isk management in D- mutual ?unds is more prevalent with the use of statistical software and the use of =a@ approach To risk management. -everal fund companies have set up risk control measures internally, /ut they still have a long way to go in relaying this to clients. G)/&'#!#2&4 1ith the recent late trading and market timing scandals in D- mutual funds The issue of corporate governance of mutual fund has again gained center stage. There 0ave been allegations of late timing in Indian M?s. The structure of Indian mutual funds is very similar to D- mutual fund . -.$ >the D- M? regulator7 re(uires T of the directors To be independent. This proportion is +M6 in case of India. 0owever, there remain ?undamental doubts whether the current governance structure provides institutionally ppropriate checks and prevents potential conflict of interest and provide effective fund dministration. $urrently, a mutual fund is set up in the form of a trust under the Indian Trust ct, which was enacted in 1<<+ to essentially govern private trusts and charitable Institutions. The trust structure has the following difficulties for a mutual fund4 S The issue of individual versus collective liability of trustees, which has deterred .)perienced persons from serving as trustees of mutual funds S M$ is not sub!ected to a specific law book and is indirectly regulated by -./I Through trustees. S pproval of directors of M$ lies with the trustees and not with -./I. The study of M? structures of other countries >DH7 reveals that there is a scope for -implification of the current structure. .liminating the sponsor and giving the power to propose the creation of the M? to the asset management company > M$7 could be mutual funds bal standards Fu u'& E4%&2 ! ()#. 1')3 Page &9

I#$(!# Mu u!" Fu#$ I#$u. 'Taking into consideration the above comparison and the current situation prevailing in The capital markets, the realistic e)pectations from the Indian Mutual fund Industry could /e: S I#2'&!.&$ P&#& '! ()#4 1ith the proposed opening up of pension funds to the 5rivate sector we can e)pect the penetration levels of M?s to increase in the ne)t ?ew years. /ecause of their e)perience in managing M?s the M$s will play an Important role in the management of pension funds. S I#2'&!.&$ E3%+!.(. )# R& !(" I#/&. )'. +')u8+ Su%%"- C+!(# I##)/! ()#. 4 @etail investments less than @s 1',''' are unprofitable for M$s. 0owever, $ertain supply chain innovations and investments in retail infrastructure would Lead to increased emphasis on retail investors. -ome of the possible innovations $an be the use of "straight2through processing,N an industry buzz phrase for utomating mutual fund transactions so that the entire process2from placing a Trade to final settlement2is fast, relatively seamless and less sub!ect to Manipulation. -traightforward concept, straight2through processing re(uires -ubstantial integration and cooperation among members of the mutual fund supply $hain. Dsing IT, members of the mutual fund supply chain can improve .fficiency, manage risk and improve regulatory compliance2all critical moves for Maintaining investor confidence in mutual funds. s urban markets reach a peak Mutual funds would target second rung cities and smaller towns to increase their Investor base. D(/&'.& R!#8& )1 P')$u2 .4 In order to make M?s more acceptable to the retail Investor mutual fund industry has to mature to offering comprehensive life cycle ?inancial planning and not products alone. These would include products catering To specific life cycle needs like buying a house, funding college admission etc. Page &:

1ith increase in investor awareness many new products would be introduced. -ome of them are listed here4 derivative based M?s >though a cap on derivative .)posure for a sponsor currently e)ists7, commodities and real estate M?s > ppropriate regulation from -./I in case of real estate pending7, feeder funds, ?unds of funds, capital protected funds, etc. S I#2'&!.& (# +& #&&$ 1)' 1(#!#2(!" !$/(2&4 s the affluence of Indians increases nd the range of financial products available to meet people,s needs e)pands 3 Mortgages, deposits, life products, defined contribution pensions, mutual funds, .tc 3 the need for financial advice will increase. Mutual fund distribution will /ecome geared towards providing sound financial advice according to investor,s @isk profile and stage in life cy Fu u'& )1 Mu u!" Fu#$. (# I#$(! /y Aecember +''&, Indian mutual fund industry reached @s 1,9',96; crore. It is estimated that by +'1' March2end, the total assets of all scheduled commercial banks should be @s &',%',''' crore.

The annual composite rate of growth is e)pected 16.&Q during the rest of the decade. In the last 9 years we have seen annual growth rate of %Q. rate, by year +'1', mutual fund ccording to the current growth will be double.

assets

Let us discuss with the following table4

A88'&8! & $&%).( . )1 S2+&$u"&$ C)3 B!#7. (# I#$(! FR.HC')'&) Mar2 MonthMOear Mar2'9 Mar2': Mar2'; Mar2'< :'9&1 Aeposits ' $hange in Q 6 19 1 1& < 16 6 1+ 2 <919% %<%1& 1+61+< Mar2'% 1' 1+<'<9 2 1 1< 6 Page &; 19:;+9 1:++9;% -ep2'% &2Aec

over last yr ,ource - -.%

Mu u!" Fu#$ AUMD. G')* + Mar2 MonthMOear '& M? DMJs $hange in Q over +: last yr ,ource AM/% 16 1+ +9 &9 % 1 '9 ': '; '< 16;:+ :<%<& %6;1; <6161 %&'1; ;96': : 1 191+& 1&%6'' Mar2 Mar2 Mar2 Mar2 Mar2'% -ep2'% &2Aec

S)3& 1!2 . 1)' +& 8')* + )1 3u u!" 1u#$. (# I#$(!

1''Q growth in the last : years. 8umber of foreign M$Js are in the (ue to enter the Indian markets like ?idelity

Investments, D- based, with over D-K1trillion assets under management worldwide.

Gur saving rate is over +6Q, highest in the world. Gnly channelizing these savings in mutual funds sector is re(uired.

1e have appro)imately +% mutual funds which is much less than D- having more than <''. There is a big scope for e)pansion.

J/J and J$J class cities are growing rapidly. Today most of the mutual funds are concentrating on the J J class cities. -oon they will find scope in the growing cities.

Mutual fund can penetrate rurals like the Indian insurance industry with simple and limited products.

-./I allowing the M?Js to launch commodity mutual funds. Page &<

.mphasis on better corporate governance. Trying to curb the late trading practices. Introduction of ?inancial 5lanners who can provide need based advice.

CHAPTER 5 9

COMPANY PROFILE
Page &%

/onanza 5ortfolio Limited calls itself as financial powerhouse for the customers. It is established in the year 1%%&. /onanza developed into one of the largest financial

services and broking house in India within a short span of time. Today, /onanza is the fastest growing financial service with 9 mega group companies under it. 1ith diligent effort, acknowledged industry leadership and e)perience, /onanza has spread its trustworthy tentacles all over the country with pan2India presence across more than 1+9' outlets spread across 6;9 cities.

1ith a smorgasbord of services across all verticals in finance /onanza offers to the customers the perfect blend of financial services right from .(uity /roking, dvisory

-ervices that cover 5ortfolio Management -ervices, Mutual ?und Investments, and Insurance to e)ceptional Aepository -ervices.

/onanza believes in being technologically advanced so that they can offer us3 their tech2 savvy customers 2 an integrated and innovative platform to trade online as well as offline. /esides, they also have one of the finest and most dedicated research teams with e)perts who have in2depth, unsurpassed knowledge of the market place. ll this and more makes Page 9'

/onanza the perfect place for customers to take their first step in the direction of financial success.

/onanza is affiliated with the best in the industry 3 right from the 8-., /-. M$R, M$R2-R to $A-L, 8-AL, etc. These affiliations prove their worth in the market and make /onanza a name to reckon with.

1ith various titles and achievements under their belt, /onanza looks forward to tougher challenges and newer milestones to con(uer, so that we3 their customer can get nothing less than the /.-TU V(.()#: To be one of the most trusted and globally reputed financial distribution companies. V!"u&.: Cu. )3&'52&# '(2 !%%')!2+:

t /onanza, customers come first and their satisfaction is not !ust top priority but also the driving force for the company, every single day.

T'!#.%!'&#2-: 0onesty is forte of the company. They believe in dealing on thoroughly ethical grounds, being fair and transparent with their customers.

M&'( )2'!2-: The company recognizes and appreciates efforts put in by their employees and as a matter of fact, reward and distinguish each one of them, ceaselessly. S)"($!'( -: Page 91

The company believes in sharing a forthright and respectful relationship with their business partners and employees. They consider them both as their team associates, who work together. -ucceed together.

M("&. )#&.:

9th largest in terms of no. of offices for +''<2+''%.

Top .(uity /roking 0ouse in terms of branch e)pansion for +''<.

:th in terms of trading terminals in for two consecutive years +'';2 +''<.

%th in terms of -ub /rokers for +'';.

8ominated among the Top 6 for the N/est ?inancial of 8ational

dvisor wards J'<N in the category

Aistributors 3 @etail instituted by $8/$2T=1< and GptiMi).

8ominated among the Top 6 for the N/est ?inancial

dvisor wards J'%N in the category

of 8ational Aistributors 3 @etail instituted by $8/$2T=1< and GptiMi).

warded by /-. JMa!or =olume Ariver '&2'9,':2';,';2'<J .

Page 9+

@anked +nd by DTI M? C $8/$ T= 1< ?inancial ?inancial dvisor2 @etail.

wards +''% in the category /est

S&'/(2&. )11&'&$ 0- B)#!#=!:

1H E,u( - !#$ D&'(/! (/&: Aerivatives are vital for the financial system as they help to hedge against the risk and also provide the customer with an opportunity to profit from the anomalies in the market.

=arious derivative contracts constitute a significant share of all the capital market transactions in the domestic as well as global markets. In India, derivative contracts are traded on 8ational -tock .)change >8-.7 on a huge scale and their trade is becoming increasingly prevalent even on /ombay -tock .)change >/-.7.

/onanza,s membership of the Aerivative -egment on both the above mentioned e)changes provides the customers with an opportunity to avail of numerous benefits of trading in derivatives. This includes, researched trading ideas, hedging and arbitrage strategies, strong risk management of leveraged positions and countless others. 2H C)33)$( -:

$ommodities are more than what the customer think they are.

lmost everything we see

around is made of what market considers commodity. It could be any kind of movable property, e)cept actionable claims, money and securities. $ommodity trade forms the backbone of world economy.

Page 96

/onanza provides us with the perfect platform to trade in these highly valuable commodities so that we can benefit and make the most of the thriving markets.

1ith a perfect blend of philosophy, knowledge and highly skilled and dedicated professionals /onanza strives to offer its client the best investment solutions across the country. It,s our belief and tryst that each client is uni(ue and therefore the company provide customized solutions to suit their every uni(ue need.

3H Cu''&#2- D&'(/! (/&.:

/onanza 5ortfolio Ltd. has always been the forerunner in initiating any new financial product and have launched trading facilities on the $urrency Aerivatives -egment for their clients at all three .)changes namely 8-., /-. C M$R2-R. Thus, they bring to us a new trading segment which brings ?oreign $urrency C Interest @ate ?utures Trading. These asset classes, where the participation was earlier limited to /anks, $urrency brokers, Licensed Money $hangers, $orporates and Multinational $ompanies, are now available at your convenience at your finger tips.

9H E5B')7(#8:

$ompared to nations overseas, Gnline Trading or .2broking is still in its early life in India. Oet these days trading online has evolved into a convenient and widely used feature for traders and investors.

/onanza believes in being up2to2date with the latest in markets and technology. Heeping that in mind, they bring to their customers the Gnline Trading feature so that the Page 9&

customers can trade from anywhere, anytime, anyplace at their own convenience. $lients can now keep track of their trading accounts, receive advice during trading hours and keep an eye on the market all through online broking. It,s tremendously fast, gives us the freedom from paperwork and the necessary statements are available to us all the time.

:H D(. '(0u ()#.:

!H Mu u!" Fu#$: Mutual ?unds are the same and not everything about them is that simple. $ustomers still wonder about the nature of Mutual ?unds if they are like shares in a company or bonds or fi)ed deposits. /onanza makes it simple for the customers to understand the cycle and psychology of Mutual ?unds and their markets so that the customer can make a diminutive amount multiply in value.

0H I#.u'!#2&: /onanza not only provides customized solutions to individual clients but also to some of the leading corporate houses and institutions across the country. 0ighly (ualified and e)perienced Insurance dvisory team helps make informed decisions right from

analyzing the needs, recommending an optimum insurance cover to assisting claim settlements.

Page 99

2H IPO: 1hen it comes to I5Gs, no one understands the markets and the client needs better than /onanza. 1ith top2notch assistance and up2to2the2minute information within reach, client can rest assure, client are in safe hands.

>H D&%).( )'- S&'/(2&.:

/onanza offering a multitude of services under one roof also includes unparalleled Aepository -ervices. /onanza 5ortfolio Ltd. is a registered member M Aepository 5articipant of both $A-L >$entral Aepository -ervices Ltd.7 and 8-AL >8ational -ecurities Aepository Ltd.7, thus giving the client the option to not only choose depository services but also the opportunity of trading at one place.

?H I#. ( u ()#!" B')7(#8:

t /onanza, they also cater to the investment needs of leading corporate houses and institutions. Their specialized services consist of the most e)perienced market professionals and Institutional /roking -ervices are backed by an insightful research team who provide the most in2depth reports on the markets. They live to serve their clients every e)clusive need through e)tensive knowledge repository and perfect blend of counseling, guidance and management. t /onanza, they blend caution with aggression

in the desired proportion for the benefit of their clients.

Page 9:

BH I#/&. 3&# B!#7(#8:

/onanza $orporate -olutions 5vt. Ltd. >/$-7 is a member of /onanza Eroup focused on providing financial C strategic business advisory services for Indian -mall and Medium .nterprises >-M.s7 C middle market $orporates with the primary ob!ective of enhancing their client,s competitiveness C value.

$ustomer centric C research based approach enables /onanza to design services to meet clients, specific needs with high level of customization at every stage of the transaction, making the clients who are their valued partners for growth. /onanza understands the problems faced by clients by working closely with them C help them deliver integrated solutions to comple) financial C business problems. /$- specializes in providing advisory services towards strategic /usiness dvisory, =enture $apital M 5rivate .(uity

?und @aising, Aebt -yndication, -trategic Investments, and Mergers C c(uisitions

/$- is also engaged in advisory for domestic as well as foreign private e(uity M venture capital investors for deal flow generation, pre2investment due diligence, valuation, post2 investment monitoring and e)it strategy.

Page 9;

CHAPTER 5: DATA ANALYSIS & INTERPRETATION

Page 9<

-tatement showing risk return analysis $o 0-/$ 0-/$ D! & 61M'1M+'16 +%M'1M+'16 +<M'1M+'16 +;M'1M+'16 +:M'1M+'16 +9M'1M+'16 +&M'1M+'16 ++M'1M+'16 +1M'1M+'16 +'M'1M+'16 1%M'1M+'16 1<M'1M+'16 1;M'1M+'16 19M'1M+'16 1&M'1M+'16 16M'1M+'16 1+M1M+'16 1+M1M+'16 1'M1M+'16 <M1M+'16 ;M1M+'16 :M1M+'16 9M1M+'16 &M1M+'16 6M1M+'16 NAV FR.H) @.TD@81&.%: 1&.%9 1&.%9 1&.%9 1&.%9 1&.%9 1&.%9 1&.%9 1&.%& 1&.%& 1&.%& 1&.%& 1&.%& 1&.%& 1&.%& 1&.%6 1&.%6 1&.%6 1&.%6 1&.%6 1&.%6 1&.%6 1&.%+ 1&.%+ 1&.%+ 2'.'::<& ' ' ' ' ' ' 2'.'::<% ' ' ' ' ' ' 2'.'::%6 ' ' ' ' ' ' 2'.'::%< ' ' averag 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 2'.'1+19 diff '.'1+19+ 2'.'99:% '.'1+19+ '.'1+19+ '.'1+19+ '.'1+19+ '.'1+19+ '.'1+19+ 2'.'99;& '.'1+19+ '.'1+19+ '.'1+19+ '.'1+19+ '.'1+19+ '.'1+19+ 2'.'99;< '.'1+19+ '.'1+19+ '.'1+19+ '.'1+19+ '.'1+19+ '.'1+19+ 2'.'99<6 '.'1+19+ '.'1+19+ dVd '.'''1+& '.''61'+ '.'''1+& '.'''1+& '.'''1+& '.'''1+& '.'''1+& '.'''1+& '.''61'; '.'''1+& '.'''1+& '.'''1+& '.'''1+& '.'''1+& '.'''1+& '.''61++ '.'''1+& '.'''1+& '.'''1+& '.'''1+& '.'''1+& '.'''1+& '.''61+; '.'''1+& '.'''1+& '.'19'&< =.@ E. @.TD@8-W'.'1+19 @I-HWXYAVAM>n217 WX'.'19'&<M+921 WX'.'19'&<M+& W'.'+9'

Page 9%

INTEPRETATION4 The above table shows risk and return of HSBC company.The average return is AHA121: and risk is AHA2:A.The company has the highest price of 19H@> and lowest price of 19H@2.

-tatement showing risk return analysis of M? $o .0A?$M?

Page :'

0A?$ M? D! & NAV FR.H) vg @.TD@8- returns 2 '.'+9+; 2 ' '.'+9+; 2 ' '.'+9+; 2 ' '.'+9+; 2 ' '.'+9+; 2'.':<&9 +'M'1M+'16 1&.9< 2'.16:%% 1%M'1M+'16 1&.9< 1<M'1M+'16 1&.9< 19M'1M+'16 1&.9; 2'.':<9% 1&M'1M+'16 1&.9; 16M'1M+'16 1&.9: 2'.':<:6 1+M1M+'16 1+M1M+'16 <M1M+'16 ;M1M+'16 :M1M+'16 9M1M+'16 &M1M+'16 1&.9: 1&.9: 1&.99 2'.':<:< 1&.99 1&.99 1&.99 1&.99 ' ' ' ' ' ' ' ' ' 2 '.'+9+; 2 '.'+9+; 2 '.'+9+; 2 '.'+9+; 2 '.'+9+; 2 '.'+9+; 2 '.'+9+; 2 '.'+9+; 2 '.'+9+; 2 '.'+9+; 2 '.'+9+; 2 '.'+9+; 2 '.'+9+; 2 '.'+9+; diff ' ' ' ' ' 2 '.':<& 9 2 '.16:% % ' ' 2 '.':<9 % ' 2 '.':<: 6 ' ' 2 '.':<: < ' ' ' ' dVd ' ' ' ' ' '.''&:<9 '.'1<;:9 ' ' '.''&;'& ' '.''&;1+ ' ' '.''&;1; ' ' ' ' '.'&+6':

+%M'1M+'16 1&.:1 +<M'1M+'16 1&.:1 +;M'1M+'16 1&.:1 +9M'1M+'16 1&.:1 ++M'1M+'16 1&.:1 +1M'1M+'16 1&.:

Page :1

=.@ E. @.TD@8-W'.'+9+; @I-HWXYAVAM>n217 WX'.'&+6':M+'21 WX'.'&+6':M1% W'.'+9'

INTEPRETATION4 The above table shows risk and return of IDFC MF company.The average return is AHA2:2? and risk is AHA2:A. The company has the highest price of 19H>1 and lowest price of 19H:9.

Page :+

-tatement showing risk return analysis of M? $G.I8E =O- M? ING VYSA MF NAV D! & FR.H) +%M'1M+'16 +<M'1M+'16 +;M'1M+'16 +9M'1M+'16 ++M'1M+'16 +1M'1M+'16 +'M'1M+'16 1%M'1M+'16 1<M'1M+'16 19M'1M+'16 1&M'1M+'16 16M'1M+'16 1+M1M+'16 1+M1M+'16 <M1M+'16 ;M1M+'16 :M1M+'16 9M1M+'16 &M1M+'16 ++.; ++.:+ ++.99 +6.'6 +6.19 +6.+% +6.:: +6.:: +6.;< +6.;1 +6.;1 +6.:6 +6.: +6.;1 +6.:& +6.:% +6.;% +6.;9 +6.:+ 2'.69+&+ 2'.6'%&: +.1+<:'6 '.9+1'9% '.:'&;9+ 1.9<<::9 ' '.9';1<9 2'.+%&6; ' 2'.66;&1 2'.1+:%: '.&::1'+ 2'.+%9+6 '.+1+9': '.&++1+% 2'.1:<1& 2'.9&;6;

@.TD@8-

vg returns diff '.++6+9; '.++6+9; '.++6+9; '.++6+9; '.++6+9; '.++6+9; '.++6+9; '.++6+9; '.++6+9; '.++6+9; '.++6+9; '.++6+9; '.++6+9; '.++6+9; '.++6+9; '.++6+9; '.++6+9; '.++6+9; '.++6+9; 2'.++6+: 2'.9;9:< 2'.96+;+ 1.%'96&: '.+%;<'+ '.6<1&%9 1.6:9&'< 2'.++6+: '.+<6%+< 2'.91;:+ 2'.++6+: 2'.9:':; 2'.69'+1 '.+&+<&9 2'.91<&% 2'.'1+;9 '.1%<<:+ 2'.6%16% 2'.;;':6

dVd '.'&%<&& '.661&'; '.+<6;<< 6.:6'6&& '.'<<:<: '.1&996< 1.<:&66< '.'&%<&& '.'<':19 '.+:;%66 '.'&%<&& '.61&6&< '.1++:9 '.'9<%;& '.+:<<66 '.'''16< '.'6%9&: '.1961% '.9%6<:& <.6%6;+6

Page :6

=.@ E. @.TD@8-W'.++6+9; @I-HWXYAVAM>n217 WX<.6%6;+6M1%21 WX<.6%6;+6M1< W'.:<+<;

INTEPRETATION4 The above table shows risk and return of I8E =O- M? company.The average return is AH2232:? and risk is AH>B2B. The company has the highest price of 23H?@ and lowest price of 22H::H

Page :&

statement showing risk return analysis of $G.F5 MG@E 8 --.T M 8 E.M.8T $GM5 8O F5 MG@E 8 --.T M 8 E.M.8T $GM5 8O NAV FR.H) 1'.9 ; 1'.9 ; 1'.9 ; 1'.9 ; 1'.9 ; 1'.9 ; 1'.9 : 1'.9 : 1'.9 : 1'.9 : 1'.9 : vg @.TD@8- returns +.<&.2 '9 +.<&.2 ' '9 +.<&.2 ' '9 +.<&.2 ' '9 +.<&.2 ' '9 +.<&.2 ' '9 2'.'%&:1 ' ' ' ' 2'.1<%6% ' '.'%&<;; 2'.'%&;% ' '.'%&<;; ' ' +.<&.2 '9 +.<&.2 '9 +.<&.2 '9 +.<&.2 '9 +.<&.2 '9 +.<&.2 '9 +.<&.2 '9 +.<&.2 '9 +.<&.2 '9 +.<&.2 '9 +.<&.2 '9 +.<&.2 '9 +.<&.2 '9

D! & +%M'1M+'16 +<M'1M+'16 +;M'1M+'16 +9M'1M+'16 ++M'1M+'16 +1M'1M+'16 +'M'1M+'16 1%M'1M+'16 1<M'1M+'16 19M'1M+'16 1&M'1M+'16

diff 2+.<&.2'9 2+.<&.2'9 2+.<&.2'9 2+.<&.2'9 2+.<&.2'9 2+.<&.2'9 2 '.'%&:69;6 & 2+.<&.2'9 2+.<&.2'9 2+.<&.2'9 2+.<&.2'9 2 '.1<%&+++% & 2+.<&.2'9 '.'%&<&<6' : 2 '.'%&<19'< & 2+.<&.2'9 '.'%&<&<6' : 2+.<&.2'9 2+.<&.2'9

dVd <.'&.21' <.'&.21' <.'&.21' <.'&.21' <.'&.21' <.'&.21' '.''<%99%++ <.'&.21' <.'&.21' <.'&.21' <.'&.21' '.'69<<'<'9 <.'&.21' '.''<%%:+'1 '.''<%<%% <.'&.21' '.''<%%:+'1 <.'&.21' <.'&.21' Page :9

1'.9 16M'1M+'16 & 1'.9 1+M1M+'16 & 1'.9 1+M1M+'16 9 <M1M+'16 ;M1M+'16 :M1M+'16 9M1M+'16 &M1M+'16 1'.9 & 1'.9 & 1'.9 9 1'.9 9 1'.9 9

'.1';;&:6<<

=.@ E. @.TD@8-W'.'''+<& @I-HWXYAVAM>n217 WX'.1';;&:6<<M+'21 WX'.1';;&:6<<M1% W'.';96 INTEPRETATION4 The above table shows risk and return of JP MORGAN ASSET MANAGEMENT company.The average return is '.'''+<& and risk is AHA?:3 .The company has the highest price of 1AH:? and lowest price of 1AH:9.

Page ::

-tatement showing risk return analysis of M? $o.FM M? FM M? D! & +%M'1M+'16 +<M'1M+'16 +;M'1M+'16 +9M'1M+'16 ++M'1M+'16 +1M'1M+'16 +'M'1M+'16 1%M'1M+'16 1<M'1M+'16 19M'1M+'16 1&M'1M+'16 16M'1M+'16 1+M1M+'16 1+M1M+'16 <M1M+'16 ;M1M+'16 :M1M+'16 9M1M+'16 &M1M+'16 NAV FR.H) +.%< +.%; +.%& 6.1& 6.1< 6.++ 6.66 6.66 6.6< 6.6% 6.6% 6.6< 6.69 6.&1 6.6: 6.6; 6.6: 6.66 6.+; 2'.6699; 21.'1'1 :.<'+;+1 1.+;6<<9 1.+9;<:+ 6.&1:1&% ' 1.9'19'+ '.+%9<9< ' 2'.+%&%% 2'.<<;9; 1.;%1'&9 21.&::+< '.+%;:1% 2'.+%:;& 2'.<%+<: 21.<'1< @.TD@8vg returs '.96:19+ '.96:19+ '.96:19+ '.96:19+ '.96:19+ '.96:19+ '.96:19+ '.96:19+ '.96:19+ '.96:19+ '.96:19+ '.96:19+ '.96:19+ '.96:19+ '.96:19+ '.96:19+ '.96:19+ '.96:19+ '.96:19+ diff 2'.96:19 2'.<;1;+ 21.9&:+9 :.+::9:% '.;6;;66 '.;+1;'% +.<;%%%; 2'.96:19 '.%:96&% 2'.+&'+% 2'.96:19 2'.<61+& 21.&+6;6 1.+9&<%6 2+.''+&6 2'.+6<96 2'.<6+<% 21.&+%'1 2+.66;%9 dVd '.+<;&9% '.;9%% +.6%'<%% 6%.+:%<% '.9&&+9 '.9+'<:9 <.+%&6<+ '.+<;&9% '.%61<%% '.'9;;&1 '.+<;&9% '.:%';<% +.'+:%%: 1.9;&;99 &.''%;1; '.'9:<%< '.:%6;'6 +.'&+':< 9.&::'+% ;'.1%61:

Page :;

=.@ E. @.TD@8-W'.96:19+ @I-HWXYAVAM>n217 WX;'.1%61:M1%21 WX;'.1%61:M1< W1.%;&;

INTEPRETATION4 The above table shows risk and return of JM MF company.The average return is AH:3>1:2 and risk is 1H@?9? .The company has the highest price of 3H91 and lowest price of 2H@9.

Page :<

no 1 + 6 & 9

/und house return 0-/$ '.'1+19 IA?$ '.'+9+; I8E =O'.++6+9; F5 MG@E 8 +.<&.2'9 M$ FM M? '.96:19+

risk '.'+9' '.'+9' '.:<+<; '.';96 1.%;&;

-isk free rate '.'< '.'< '.'< '.'< '.'<

-0 @5.,- 5.@?G@M 8$. I8A.R -.5.IW @52@fM-TA.A.=I TIG8 0-/$W'.'1+192'.'<M'.'+9' W2+.;9& IA?$W'.'+9+;2'.'<M'.'+9' W2+.1<%+ I8E =O- W'.++6+9;2'.'<M'.:<+<; W'.+'%; F5 MG@E 8 M$W'.'''+<&2'.'<M'.';96 W 21.'9<: FM M?W'.96:19+2'.'<M1.%;&; W'.+6'% Page :%

?D8A 0GD-. 0-/$ IA?$ I8E =OF5 MG@E 8 M$ FM M?

5.@5G@M 8$. I8A.R 2+.;9& 2+.1<%+ '.+'%; 21.'9<: '.+6'%

Page ;'

ANALYSIS OF E;UITIES -tatement showing risk and return analysis of e(uity JETAIRWAYS O%&# P'(2& 99; 999.& C").& P'(2& 99'.6 9&;.:

S-30)"

D! &

@eturns 21.+'+<; 21.&'&6% 2'.%;<; 21.1&6%: 2+.<++&; '.&;;<< : '.'%+<+ 9 '.1;;%' 6 2'.:;:6 21.9&+': 2+.9%:19 '.++;&% < 26.+%9:6

&2Fan2 F.T I@1 O- 16 92Fan2 F.T I@1 O- 16 :2Fan2 F.T I@1 O- 16 ;2Fan2 F.T I@1 O- 16 <2Fan2 F.T I@1 O- 16

991.;9 9&:.69 9&:.69 9&'.1 9&6.<9 9+<.9 96:.19

1+2 F.T I@1 O- Fan216 966.:

1+2 F.T I@1 O- Fan216 96<.:9 96%.19 162 F.T I@1 O- Fan216 96& 1&2 F.T I@1 O- Fan216 96%.; 192 F.T I@1 O- Fan216 969 1<2 F.T I@1 O- Fan216 9+' 1%2 F.T I@1 O- Fan216 9'9.9 +'2 F.T I@1 O- Fan216 91+.< 96&.%9 96:.'9 9+:.;9 9':.9 9':.:9 &%9.%

avg ret 2 '.6:1' 6 2 '.6:1' 6 2 '.6:1' 6 2 '.6:1' 6 2 '.6:1' 6 2 '.6:1' 6 2 '.6:1' 6 2 '.6:1' 6 2 '.6:1' 6 2 '.6:1' 6 2 '.6:1' 6 2 '.6:1' 6 2 '.6:1' 6

diff 2'.<&1<& 21.'&66: 2'.:1;:; 2'.;<+%6 2+.&:1&& '.<6<%1 : '.&96<9 9 '.96<%6 6 2'.619+; 21.1<1'6 2+.+691+ '.9<<9+ < 2+.%6&:

dVd '.;'<:%% 1.'<<:'; '.6<19+1 '.:1+%;+ :.'9<:<& '.;'6;< '.+'9%<& '.+%'&&< '.'%%6%: 1.6%&<+6 &.%%9;;% '.6&:6:9 <.:1+<<< Page ;1

+12 F.T I@1 O- Fan216 &%&.;9 91+.+9 ++2 F.T I@1 O- Fan216 &%' +92 F.T I@1 O- Fan216 919 +;2 F.T I@1 O- Fan216 9+%.% +<2 F.T I@1 O- Fan216 9'' +%2 F.T I@1 O- Fan216 &<% 91<.:9 96<.% &;%.6 &%+.'9 91&.19

6.669'1 < 9.<&:%6 % &.:&';; ; 2%.9&<%; 21.9% 9.1&61& %

2 '.6:1' 6 2 '.6:1' 6 2 '.6:1' 6 2 '.6:1' 6 2 '.6:1' 6 2 '.6:1' 6

6.:%:'& < :.+';%: % 9.''1<' ; 2%.1<;%& 21.++<%; 9.9'&1; %

16.::';; 6<.96<<< +9.'1<'; <&.&1<+; 1.91'6:; 6'.+%9%% +1<.%&16

verage returnsW'.6:1'6 @iskWXYdVdM>n217 WX+1<.%&16M1< W6.&<;:

INTERPRETATION: The above table shows risk and return of F.T I@1 O- company.The average return is '.6:1'6 and risk is 6.&<;: The company has the highest price is 99; and lowest price is &;%.6.

Page ;+

-tatement showing risk return analysis of e(uity MARUTI O%&# P'(2& 19:9 19:6.9 191< 1&:< C").& P'(2& 1991.&9 1919.<9 1&:1.:9 1&96.6

S-30)"

D! &

returns 2'.<:9<1 26.'&;:9 26.;1+1+ 21.''16:

&2Fan2 M @DTI 16 92Fan2 M @DTI 16 :2Fan2 M @DTI 16 M @DTI ;2Fan2 16

avg ret 2 '.91%& 1 2 '.91%& 1 2 '.91%& 1 2 '.91%&

diff 2'.6&:& 2+.9+<+& 26.1%+;1 2'.&<1%9

dVd '.1+%%%: :.6%1%%9 1'.1%6& '.+6++;< Page ;6

<2Fan2 M @DTI 16 1+2Fan2 M @DTI 16 1+2Fan2 M @DTI 16 162Fan2 M @DTI 16 1&2Fan2 M @DTI 16 192Fan2 M @DTI 16 1<2Fan2 M @DTI 16 1%2Fan2 M @DTI 16 +'2Fan2 M @DTI 16 +12Fan2 M @DTI 16 ++2Fan2 M @DTI 16 +92Fan2 M @DTI 16 +;2Fan2 M @DTI 16 +<2Fan2 M @DTI 16 +%2Fan2 M @DTI 16

1&9% 1&&+

1&66.19 1&9&.;9

21.;;1;: '.<<&1< % 2'.%&91< 2'.9;&1+ 21.:;<+9 '.+&&:< 1 1.&&&+< ; 21.'%&'< +.':<1: % '.96:66 + '.6'%'+ < +.&++'% : 2&.+;:;6 '.'%&&' < 1.'%9'+ 6

1&9&.;9 1&&1 1&6; 1&6% 1&1' 1&'% 1&69 1&+<.< 1&&9 1&&' 1&1+ 1&61 16;; 16;&.& 1&+<.;9 1&1&.<9 1&16.&9 1&+%.69 1&1%.6 1&9<.69 1&9+.;9 1&&&.&9 1&&:.+ 16:%.< 16;<.6 16<%.&9

1 2 '.91%& 1 2 '.91%& 1 2 '.91%& 1 2 '.91%& 1 2 '.91%& 1 2 '.91%& 1 2 '.91%& 1 2 '.91%& 1 2 '.91%& 1 2 '.91%& 1 2 '.91%& 1 2 '.91%& 1 2 '.91%& 1 2 '.91%& 1 2 '.91%& 1

21.+9+69 1.&'69% % 2'.&+9;; 2'.'9&; 21.19<<& '.;:&'% 1 1.%:6:% ; 2'.9;&:; +.9<;9; % 1.'99;& + '.<+<&6 < +.%&19' : 26.;9;6+ '.:16<1 < 1.:1&&6 6

1.9:<6<& 1.%;''<% '.1<1+< '.''+%%+ 1.6&+%'; '.9<6<69 6.<9:1'9 '.66'+&+ :.:%99:: 1.1+&9%+ '.:<:6'% <.:9+&9% 1&.1+;&9 '.6;:;;6 +.:':6%9 :1.'+6'9

Page ;&

verage returnsW2'.91%&1 @iskWXYdVdM>n217 WX:1.'+6'9M1< W1.<&1+

INTERPRETATION: The above table shows risk and return of M @DTI company.The average return is 2'.91%&1 and risk is 1.<&1+. The company has the highest price of 19:9 and lowest price 16:%.<.

Page ;9

-tatement showing risk return analysis of e(uity TCS O%&# P'(2& ;9&.< ;99 ;91.<9 ;69.9 ;1: ;'& ;6+ ;&9 ;%<.&9 ;%: <'' <'+.+ ;%+.+ ;;+.+9 ;:1 C").& P'(2& ;91.:9 ;91.<9 ;6&.<9 ;1&.& :%%.< ;1&.+ ;9'.'9 ;<<.99 ;;%.<9 ;%1.& <'+.+ ;<'.; ;;%.& ;;'.:9 ;9;.<9

S-30)" D! & T$T$T$T$T$T$T$T$T$T$T$T$T$T$T$&2Fan2 16 92Fan2 16 :2Fan2 16 ;2Fan2 16 <2Fan2 16 1+2Fan2 16 1+2Fan2 16 162Fan2 16 1&2Fan2 16 192Fan2 16 1<2Fan2 16 1%2Fan2 16 +'2Fan2 16 +12Fan2 16 ++2Fan2

returns 2'.&1;66 2'.&1;++ 2+.+:1'% 2+.<:<< 2+.+:+9; 1.&&<<: & +.&:9<& ; 9.<&9:6 < 2+.6+%91 2'.9;;<% '.+;9 2+.:<'16 21.:19;9 2'.+';1% 2'.&16%6

avg ret 2 '.&1+6 6 2 '.&1+6 6 2 '.&1+6 6 2 '.&1+6 6 2 '.&1+6 6 2 '.&1+6 6 2 '.&1+6 6 2 '.&1+6 6 2 '.&1+6 6 2 '.&1+6 6 2 '.&1+6 6 2 '.&1+6 6 2 '.&1+6 6 2 '.&1+6 6 2

diff 2'.'': 2'.''9<% 21.<&%;: 2+.&9;&; 21.<91+& 1.<:'1% & +.<;;1; ; :.+9:%: < 21.%1<1< 2'.1::9: '.:<:66 2+.+:<< 21.+'&&+ '.+'&1& 6 2'.''+:

dVd 6.9%<%1.2'9 6.&:;&%.2'9 6.&+1:'%91: :.'6%1&+;:6 6.&+;'<<%1; 6.&:'6+'6:9 <.+;<1&;&9< 6%.1&%:&669 6.:;%&+;:< '.'+;;&+'&% '.&;1'&<<:% 9.1&;&91<++ 1.&9':6:+'+ '.'&1:;&&&% :.;99'1.2': Page ;:

16 T$T$T$T$+92Fan2 16 +;2Fan2 16 +<2Fan2 16 +%2Fan2 16 ;9;.9 ;9' ;&%.9 ;6& ;9:.+ ;&6.6 ;&1.;9 ;6:.+ 2'.1;1:+ 2'.<%666 21.'6&'+ '.+%%;+ <

'.&1+6 6 2 '.&1+6 6 2 '.&1+6 6 2 '.&1+6 6 2 '.&1+6 6

'.+6%;1 6 2'.&<+ 2'.:++:% '.;1+'9 <

'.'9;&:++&9 '.+6+6+;+16 '.6<;;&:1;: '.9'9:'+;%; ;9.;;;1&%+%

verage returnsW2'.&1+66 @iskWXYdVdM>n217 WX;9.;;;1&%+%M1< W+.'91;< INTERPRETATION: The above table shows risk and return of T$- company.The average return is 2'.&1+66 and risk is +.'91;< .The company has the highest price of <'+.+ and lowest price of :%%.<.

Page ;;

-tatement showing risk return analysis of e(uity HDFC O%&# P'(2& +:%&.< +;'< C").& P'(2& +:;&.69 +:<6.&9

S-30)" D! & 0A?$ 0A?$ &2Fan2 16 92Fan2 16

returns 2'.;9<<; 2'.%':9;

avg ret 2 '.%&:& : 2 '.%&:& :

diff '.1<;9% 1 '.'6%<< ;

dVd '.'691% '.''19%1 Page ;<

0A?$ 0A?$ 0A?$ 0A?$ 0A?$ 0A?$ 0A?$ 0A?$ 0A?$ 0A?$ 0A?$ 0A?$ 0A?$ 0A?$ 0A?$ 0A?$ 0A?$

:2Fan2 16 ;2Fan2 16 <2Fan2 16 1+2Fan2 16 1+2Fan2 16 162Fan2 16 1&2Fan2 16 192Fan2 16 1<2Fan2 16 1%2Fan2 16 +'2Fan2 16 +12Fan2 16 ++2Fan2 16 +92Fan2 16 +;2Fan2 16 +<2Fan2 16 +%2Fan2 16

+;'' +:;;.+ +:9' +:1+ +:1< +9%<.; +969.'9 +96' +9+9 +9<' +961.+9 +96'.'9 +&+9.1 +&'' +6;%.& +6&' +6&'

+:%:.69 +:&:.19 +:''.'9 +:''.1 +99%.:9 +9&6.% +9+&.%9 +9+1.9 +99;.&9 +91'.9 +9+;.+9 +&6; +&'<.; +6<1.%9 +6'9.99 +6&:.<9 +6<6.<9

2'.1691% 21.19%;% 21.<<&%1 2'.&999% 2+.++<< 2+.1'<;9 2'.6%<&1 2'.669%; 1.+<91& % 2+.:%6< 2'.19<'+ 26.:;;;% 2'.:;:+: 2'.;9+'< 26.1'6;+ '.+%+;6 9 1.<;6%6 +

2 '.%&:& : 2 '.%&:& : 2 '.%&:& : 2 '.%&:& : 2 '.%&:& : 2 '.%&:& : 2 '.%&:& : 2 '.%&:& : 2 '.%&:& : 2 '.%&:& : 2 '.%&:& : 2 '.%&:& : 2 '.%&:& : 2 '.%&:& : 2 '.%&:& : 2 '.%&:& : 2 '.%&:& :

'.<1++; 9 2'.+1666 2'.%6<&9 '.&%'<; 21.+<+6& 21.1:++% '.9&<'& : '.:1'&% + +.+61:' % 21.;&;6& '.;<<&6 9 2+.;6166 '.+;'1% % '.1%&6; ; 2+.19;+: 1.+6%1% 9 +.<+'6% +

'.:9<1:; '.'&991+ '.<<':< '.+&'%9& 1.:&&6%; 1.69'%1 '.6''69& '.6;+; &.%<'';; 6.'961%+ '.:+1:6 ;.&:'1< '.';6''< '.'6;;<+ &.:96;<: 1.969:'& ;.%9&:'% Page ;%

69.%''6+

average returnsW'.%&:&: @iskWXYdVdM>n217 WX69.%''6+M1< W1.&1++9&

INTERPRETATION: The above table shows risk and return of 0A?$ company.The average return is '.%&:&: and risk is 1.&1++9& . The company has the highest price of +;'< and lowest price of +6'9.99.

Page <'

-tatement showing risk return analysis of e(uity INFOSYSTCH O%&# P'(2& +:1' +:+' +:<6 +9<:.: +91% +&;9.1 +9'' +&;:.< 9 +:;% +:<%.; 9 +::6 +:<' +:&<.: 9 +:&6 +:'' +99' +96+ +916 +&9+.& C").& P'(2& +:1+.: +:+1.6 9 +9<6.1 +9+9.' 9 +&:&.+ +&<%.: 9 +9<:.% 9 +:<6.9 +:<%.; 9 +:;9.< +:<:.: 9 +:69.% +:9;.; +:+9.+ +9;9.: +9&+.6 +9'+.+ 9 +&%1.; 9 +&;9.9

S-30)" I8?G-O-T$0 I8?G-O-T$0 I8?G-O-T$0 I8?G-O-T$0 I8?G-O-T$0 I8?G-O-T$0 I8?G-O-T$0 I8?G-O-T$0 I8?G-O-T$0 I8?G-O-T$0 I8?G-O-T$0 I8?G-O-T$0 I8?G-O-T$0 I8?G-O-T$0 I8?G-O-T$0 I8?G-O-T$0 I8?G-O-T$0 I8?G-O-T$0 I8?G-O-T$0

D! & &2Fan2 16 92Fan2 16 :2Fan2 16 ;2Fan2 16 <2Fan2 16 1+2 Fan216 1+2 Fan216 162 Fan216 1&2 Fan216 192 Fan216 1<2 Fan216 1%2 Fan216 +'2 Fan216 +12 Fan216 ++2 Fan216 +92 Fan216 +;2 Fan216 +<2 Fan216 +%2 Fan216

returns '.'%%:1 ; '.'919+ ; 26.;+6&& 2+.6;%9; 2+.1;9&; '.9<;<9 9 6.&;< <.6&6+9 % '.&'1+: % 2'.91<:& '.<<<'% : 21.:&99+ '.6&1:< 6 2'.:;6&< 2'.%6<&: 2'.6'1%: 21.1;&%: 2'.<&9: '.%&1%6 &

avg ret '.'6%;% ; '.'6%;% ; '.'6%;% ; '.'6%;% ; '.'6%;% ; '.'6%;% ; '.'6%;% ; '.'6%;% ; '.'6%;% ; '.'6%;% ; '.'6%;% ; '.'6%;% ; '.'6%;% ; '.'6%;% ; '.'6%;% ; '.'6%;% ; '.'6%;% ; '.'6%;% ; '.'6%;% ;

diff '.'9%<+ '.'1+;6 26.;:6+& 2+.&1%6; 2+.+19+: '.9&<'9 < 6.&6<+' 6 <.6'6&: + '.6:1&; + 2'.99<&6 '.<&<+% % 21.:<96+ '.6'1<< : 2'.;16+; 2'.%;<+: 2'.6&1;: 21.+1&;: 2'.<<9& '.%'+16 ;

dVd '.''69;< '.'''16< 1&.1:1%< 9.<966&9 &.%';6%+ '.6''6:< 1+.<+1+& :<.%&;&; '.16'::+ '.61+<&; '.;1%:1+ +.<&'6'1 '.'%1+69 '.9'<;: '.%9:%% '.1+:;%< 1.&;9:6: '.;<6%66 '.<16<9+ 1+&.;&9

Page <1

average returnsW'.'6%;%; @iskWXYdVdM>n217 WX1+&.;&9M1< W+.9+&<+1 INTERPRETATION: The above table shows risk and return of I8?G-O-T$0 company.The average return is '.'6%;%; and risk is +.9+&<+1 .The company has the highest price of +:<%.;9 and lowest price +&9+.& .

C!"2u"! ()# )1 2)5&11(2(&# )1 /!'(!#2&FCOV) $G=Wreturn>mean 7Mrisk>std deviation7 F.T I@1 O-W'.6:1'6M6.&<;: W'.1'691 M @DTIW'.91%&1M1.<&1+ W'.+<+1' T$-W'.&1+6M+.'91;< W'.+''&: Page <+

0A?$W'.%&:&:M1.&1++9& W'.:;'1; I8?G-O-T$0W'.'6%;%;M+.9+&<+1 W'.'19;: COMPANY F.T I@1 OM @DTI T$0A?$ I8?G-O-T$0 RETURN '.6:1'6 '.91%&1 '.&1+66 '.%&:&: '.'6%;%; RISC 6.&<;: 1.<&1+ +.'91;< 1.&1++9& +.9+&<+1 COV '.1'691 '.+<+1' '.+''&: '.:;'1; '.'19;:

Page <6

Page <&

CHAPTER > FINDINGS< SUGGESTIONS & CONCLUSIONS

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FINDINGS
The present pro!ect work has been undertaken to study and analyse the mutual funds with .(uities reference to their risk and returns. 1hile doing this pro!ect we observe the following facts. The company 0-/$ is having the highest price of 8 = is 1&.%: and lowest price of 8 = is 1&.%+. It is showing less fluctuations. The risk is '.'+9' and return is '.'1+19. The performance inde) is 2+.;9&. The company IA?$ is having the highest price of 8 = is1&.:1 and lowest price of 8 = is 1&.9&. It is showing less fluctuations. The risk is '.'+9' and return is '.'+9+;. The performance inde) is 2+.1<%+. The company I8E =O- M? is having the highest price of 8 = is +6.;% and lowest price of 8 = is ++.99. It is showing less fluctuations. The risk is '.:<+<; and return is '.++6+9;. The performance inde) is '.+'%;. The company F5 MG@E 8 --.T M 8 E.M.8T $GM5 8O is having the highest price of 8 = is 1'.9; and lowest price of 8 = is 1'.9&. It is showing less fluctuations. The risk is '.';96 and return is '.'''+<&. The performance inde) is 21.'9<:. The company FM M? is having the highest price of 8 = is 6.&1 and lowest price of 8 = is +.%&. It is showing less fluctuations. The risk is 1.%;&; and return is '.96:19+. The performance inde) is '.+6'%. The company F.T I@1 O- is having the highest M.5 is 99; and lowest price of is &;%.6. It is showing more fluctuations. The risk is 6.&<;: and return is '.6:1'6. The co2efficient of variation '.1'691. The company M @DTI is having the highest M.5 is 19:9 and lowest price of is 16:%.<. It is showing more fluctuations. The risk is 1.<&1+ and return is '.91%&1. The co2efficient of variation '.+<+1'. The company T$- is having the highest M.5 is <'+.+ and lowest price is :%%.<. It is showing more fluctuations. The risk is +.'91;< and return is '.&1+66. The co2 efficient of variation '.+''&:. The company 0A?$ is having the highest M.5 is +;'< and lowest price is +6'9.99. It is showing more fluctuations. The risk is 1.&1++9& and return is '.%&:&: The co2efficient of variation '.:;'1;. The company I8?G-O-T$0 is having the highest M.5 is +:<%.;9 and lowest price is +&9+.&. It is showing more fluctuations. The risk is +.9+&<+1 and return is '.'6%;%;. The c'2efficient of variation '.'19;:.

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SUGGESTIONS
The present pro!ect work has been undertaken to study the best available mutual funds in the industry and evaluating their performances. 1hile doing so we come across the analysis and few facts have been identified. fter such analysis,interpretation and findings we will be able to suggest investors as follows. The fund house FM M? is showing best performance inde) of all the funds. The -5I of FM M? is '.+6'%. There fore it should be bought at its lowest nav i.e,+.%&. The fund house I8E =O- is showing best performance inde) of all the funds. The -5I of I8E =O- is '.+'%;. There fore it should be bought at its lowest nav i.e,++.99.

The fund house F5 MG@E 8 M$ is showing best performance inde) of all the funds. The -5I of F5 MG@E 8 M$ is 21.'9<:. There fore it should be bought at its lowest nav i.e,1'.9&.

The fund house IA?$ is showing best performance inde) of all the funds. The -5I of IA?$ is 2+.1<%+. There fore it should be bought at its lowest nav i.e,1&.9&.

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 The fund house 0-/$ is showing best performance inde) of all the funds. The -5I of 0-/$ is 2+.;9&. There fore it should be bought at its lowest nav i.e,1&.%+.

The 1st highest co2efficient of variation among 9 companies is '.:;'1;, this is for 0A?$ company. There fore it is better to buy this company shares. This company shares can be bought at highest value +;'<.

The 1st highest co2efficient of variation among 9 companies is '.+<+1', this is for M @DTI company. There fore it is better to buy this company shares. This company shares can be bought at highest value 19:9.

The 1st highest co2efficient of variation among 9 companies is '.+''&:, this is for T$- company. There fore it is better to buy this company shares. This company shares can be bought at highest value <'+.+.

The 1st highest co2efficient of variation among 9 companies is '.1'691, this is for F.T I@1 O- company. There fore it is better to buy this company shares. This company shares can be bought at highest value 99;.

The 1st highest co2efficient of variation among 9 companies is '.'19;:, this is for I8?G-O-T$0 company. There fore it is better to buy this

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company shares. This company shares can be bought at highest value +:<%.;9.

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CONCLUSION
The present pro!ect work has been undertaken to study the mutual funds and e(uities investments. These days investors become more aware of many financial instruments will have one or the others advantages over others. Therefore it is better to compare and evaluate the performances of these financial instruments and to decide the which investment should be made. In this pro!ect the emphasis is given on mutual funds and e(uity instruments. Most of the people think that e(uity instruments have to face more risk than mutual funds. This is true in some cases. The investors who can face more risk interested towards investors in e(uities and those who want to restrict themselves will invest in mutual funds.

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BIBILIOGRAPHY

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IH TEET BOOC 1. -ecurity nalysis 5ortfolio Management Aonald ?isher @onald +. IIH WEB SITES www.mutualfundsindia.com www.amfiindia.com www.utimf.com www.bseindia.com IIIH MAGAINES /usiness India /usiness 1orld IVH NEWS PAPERS .conomic Times /usiness -tandard. 0.-adhak Fordan Mutual ?und In India

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