Sahara Mutual Funds

Risk And Return Analysis of SAHARA MUTUAL FUNDS
EXECUTIVE SUMMARY
Mutual Funds (MF) have in recent times become one of the most attractive ways for an average person to invest their money. It is said that Bank investment is the first priority of people to invest their savings and the second place is for investment in Mutual Funds and other avenues. A Mutual Fund pools resources from thousands of investors and then diversifies its investment into many different holdings such as stocks, bonds, or Government securities in order to provide high relative safety and returns. The Project is a FINANCE PROJECT which tries to explain in laymans language about the history, growth, & pros and cons of investing in Mutual Funds and the second part of it deals with the analysis of risk and returns of equity and debt schemes of Sahara Mutual Fund in comparison with their respective benchmark indices. The main objective of the project was to get an Overview of Mutual Fund Industry, its set up, its working and to find out the risks and returns of both equity and debt schemes of Sahara Mutual fund. Also generate leads of the prospective investors in Mutual Funds for the Asset Management Company (AMC) to sell Mutual Fund products and to make people aware of the Sahara Mutual Fund and its products. The project includes a brief idea about the growth of MF industry (History), the broad idea about the organization and concept of MF and SEBI Guidelines on Mutual Funds. There are many improvements pending in the field and it has to happen as soon as possible so as to call the MF industry as an Organized and well-developed sector. The past performance of MF is not necessarily indicative of future performance of the scheme and no AMC guarantees Returns and or safety of Principal.
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INTRODUCTION TO MUTUAL FUNDS
Mutual Funds - The Concept
A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. The flow chart below describes broadly the working of a mutual fund:
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The following simple diagram clearly shows the working of a mutual fund:
Mutual Funds Organization There are many entities involved and the diagrams above (Fig 1, 2 & 3) illustrate the organizational set up of a mutual fund:
Advantages of Mutual Funds Professional Management
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Diversification Convenient Administration Return Potential Low Costs Liquidity Transparency Flexibility Choice of scheme Tax benefits Well regulated
Disadvantages of Mutual Funds No control over the costs No tailor made portfolios
HISTORY OF MUTUAL FUNDS (WORLDWIDE): When three Boston securities executives pooled their money together in 1924 to create the first mutual fund, they had no idea how popular mutual funds would become. The idea of pooling money together for investing purposes started in Europe in the mid-1800s. The first pooled fund in the U.S. was created in 1893 for the faculty and staff of Harvard University. On March 21st, 1924 the first official mutual fund was born. It was called the Massachusetts Investors Trust. After one year, the Massachusetts Investors Trust grew from $50,000 in assets in 1924 to $392,000 in assets (with around 200 shareholders). In contrast, there are over 10,000 mutual funds in the U.S. today totaling around $7 trillion (with approximately 83 million individual investors) according to the Investment Company Institute. The stock market crash of 1929 slowed the growth of mutual funds. In response to the stock market crash, Congress passed the Securities Act of 1933 and the Securities Exchange Act of 1934. These laws require that a fund be registered with the SEC and provide prospective
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investors with a prospectus. The SEC (U.S. Securities and Exchange Commission) helped create the Investment Company Act of 1940, which provides the guidelines that all funds must comply with today. With renewed confidence in the stock market, mutual funds began to blossom. By the end of the 1960s there were around 270 funds with $48 billion in assets. In 1976, John C. Bogle opened the first retail index fund called the First Index Investment Trust. It is now called the Vanguard 500 Index fund. In November of 2000 it became the largest mutual fund ever with $100 billion in assets. History of Indian Mutual Fund Industry The history of Mutual Funds in India can be broadly divided into 4 Phases: 1. First phase (1964-1987) The Unit Trust of India (UTI) was established in the year 1963 by passing an Act in the Parliament. The UTI was setup by the Reserve Bank of India (RBI) and functioned under the Regulatory and Administrative control of the RBI. The First scheme in the history of mutual funds was UNIT SCHEME-64, which is popularly known as US-64. In 1978, UTI was de-linked from RBI. The Industrial Development Bank of India (IDBI) took over the Regulatory and Administrative control. At the end of the year 1988, UTI had Rs.6,700/- Crores of Assets Under Management. 2. Second phase (1987-1993) Entry of Public Sector Funds. In the year 1987, public sector Mutual Funds setup by public sector banks, Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC) are came in to existence. State Bank of India Mutual Fund was the first non-UTI Mutual Fund. The following are the non-UTI Mutual Funds at initial stages. SBI Mutual Fund in June 1987.
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Can Bank Mutual Fund in December 1987. LIC Mutual Fund in June 1989. Punjab National Bank Mutual Fund in August 1989. Indian Bank Mutual Fund in November 1989. Bank of India Mutual Fund in June 1990. GIC Mutual Fund in December 1990. Bank of Baroda Mutual Fund in October 1992. At the end of 1993, the entire Mutual Fund Industry had Assets under Management of Rs.47, 004/- Crores. 3. Third phase (1993-2003) Entry of Private Sector Funds - a wide choice to Indian Mutual Fund investors. In 1993, the first Mutual Fund Regulations came into existence, under which all mutual funds except UTI were to be registered and governed. The Erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector Mutual Fund Registered in July 1993. In 1996, the 1993 Securities Exchange Board of India (SEBI) Mutual Funds Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations. The number of Mutual Fund houses went on increasing, with many foreign mutual funds setting up funds in India. In this time, the Mutual Fund industry has witnessed several Mergers &Acquisitions. The UTI with Rs.44, 541/- Crores. Of Assets Under management was way ahead of all other Mutual Funds.
The following was the status at end of April 30, 2011:
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Number of schemes 321 51 372 Amount (in Crores) 61,22,07,036 3,32,92,963
Open-ended schemes Close-ended schemes TOTAL (Source AMFI website)
64,55,00,000
The diagram below shows the three segments and some players in each segment:
4. Fourth phase (2003-06) Following the repeal of the UTI Act in February 2003, it was (UTI) bifurcated into 2 separate entities. One is the specified undertaking of the UTI with asset under management of Rs.29, 835/- Crores as at the end of January 2003. The second is the UTI Mutual Funds Limited, sponsored by State Bank of India, Punjab National Bank, Bank of Baroda and Life Insurance Corporation of India. UTI is functioning under an Administrator and under the Rules framed by the Government of India and does not come under the purview of the Mutual Fund Regulations. The UTI Mutual Funds Limited is registered with SEBI and functions under the Mutual Funds Regulations. With the bifurcation of the Erstwhile UTI, with the setting up of a UTI Mutual Fund, confirming to the SEBI Mutual Fund Regulations and with recent mergers taking place among different
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private sector funds, the Mutual Fund Industry has entered its current phases of consolidation and growth. At the end of September 2004, there were 29 funds, which manage assets of Rs.1, 53,108/Crores under 421 different schemes.
5. The fifth phase 2006-11 113 new Schemes were launched in the quarter and a sum of Rs.32,828 crores under Income Schemes, Rs.396 crores under Equity Schemes, Rs.68 crores under Gold ETF Schemes, Rs.4 Crores under Fund of Funds Investing Overseas Schemes. Total Funds mobilized during the quarter stood at Rs.22, 06,707 crores as against Rs.26, 69,515
Crores for the corresponding quarter last year representing a decline of 17%. l Redemptions at Rs.22,38,419 crores were 15% lower than the redemptions of Rs.26,40,304 crores in the corresponding quarter last year. l On a net basis, there was an outflow of Rs.31,712 crores during the quarter as against an inflow of Rs.29,211 crores in the corresponding quarter last year. Data on Fund of Funds is given The Assets under Management as on December 31, 2010 stood at Rs. 6, 26,314 crores as against Rs. 6, 65,146 crores as at the end of the previous year representing a decline of 6%.
Association of Mutual Funds in India (AMFI) With the increase in Mutual Fund players in India, a need for Mutual Fund Association in India was generated to function as a non-profit organization. Association of Mutual Funds in India (AMFI) was incorporated on 22nd August, 1995. AMFI is an apex body of all Asset Management Companies (AMC) which has been registered with Securities Exchange Board of India (SEBI). Till date all the AMCs are that have launched mutual fund schemes are its members. It functions under the supervision and guidelines of its Board of Directors. Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a professional and healthy market with ethical lines enhancing and maintaining standards. It
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follows the principle of both protecting and promoting the interests of mutual funds as well as their unit holders. The objectives of Association of Mutual Funds in India The Association of Mutual Funds of India works with 30 registered AMCs of the country. It has certain defined objectives which juxtaposes the guidelines of its Board of Directors. The objectives are as follows: This Mutual Fund Association of India maintains high professional and ethical standards in all areas of operation of the industry. It also recommends and promotes the top class business practices and code of conduct which is followed by members and related people engaged in the activities of Mutual Fund and Asset Management. The agencies who are by any means connected or involved in the field of capital markets and financial services also involved in this code of conduct of the association.
AMFI interacts with SEBI and works according to SEBIs guidelines in the Mutual Fund industry. Associations of Mutual Fund of India do represent the Government of India, the Reserve Bank of India and other related bodies on matters relating to the Mutual Fund Industry. It develops a team of well qualified and trained Agent distributors. It implements a programme of training and certification for all intermediaries and other engaged in the mutual fund industry. AMFI undertakes all India awareness programme for investors in order to promote proper understanding of the concept and working of Mutual Funds. At last but not the least Association of Mutual Fund of India also disseminate information on Mutual Fund Industry and undertakes studies and research either directly or in association with other bodies. The sponsors of Association of Mutual Funds in India Bank Sponsored SBI Fund Management Ltd. BOB Asset Management Co. Ltd. Canbank Investment Management Services Ltd. UTI Asset Management Company Pvt. Ltd. Institutions
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GIC Asset Management Co. Ltd. Jeevan Bima Sahayog Asset Management Co. Ltd.
Private Sector Indian: Benchmark Asset Management Co. Pvt. Ltd. Cholamandalam Asset Management Co. Ltd. Credit Capital Asset Management Co. Ltd. Escorts Asset Management Ltd. JM Financial Mutual Fund Kotak Mahindra Asset Management Co. Ltd. Reliance Capital Asset Management Ltd. Sahara Asset Management Co. Pvt. Ltd Sundaram Asset Management Company Ltd. Tata Asset Management Private Ltd.
Predominantly India Joint Ventures: Birla Sun Life Asset Management Co. Ltd. DSP Merrill Lynch Fund Managers Limited HDFC Asset Management Company Ltd.
Predominantly Foreign Joint Ventures:
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ABN AMRO Asset Management (I) Ltd. Alliance Capital Asset Management (India) Pvt. Ltd. Deutsche Asset Management (India) Pvt. Ltd. Fidelity Fund Management Private Limited Franklin Templeton Asset Mgmt. (India) Pvt. Ltd. HSBC Asset Management (India) Private Ltd. ING Investment Management (India) Pvt. Ltd. Morgan Stanley Investment Management Pvt. Ltd. Principal Asset Management Co. Pvt. Ltd. Prudential ICICI Asset Management Co. Ltd. Standard Chartered Asset Mgmt Co. Pvt. Ltd.
Association of Mutual Funds in India Publications: AMFI publishes mainly two types of bulletin. One is on the monthly basis and the other is quarterly. These publications are of great support for the investors to get intimation of the knowhow of their parked money.
Mutual Fund Structure
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SEBI REGULATIONS ON MUTUAL FUNDS The Government brought Mutual Funds in the Securities market under the regulatory framework of the Securities and Exchange board of India (SEBI) in the year 1993.
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SEBI issued guidelines in the year 1991 and comprehensive set of regulations relating to the organization and management of Mutual Funds in 1993. SEBI REGULATIONS 1993 The regulations bar Mutual Funds from options trading, short selling and carrying forward transactions in securities. The Mutual Funds have been permitted to invest only in transferable securities in the money and capital markets or any privately placed debentures or securities debt. Restrictions have also been placed on them to ensure that investments under an individual scheme, do not exceed five per cent and investment in all the schemes put together does not exceed 10 per cent of the corpus. Investments under all the schemes cannot exceed 15 per cent of the funds in the shares and debentures of a single company. SEBI grants registration to only those mutual funds that can prove an efficient and orderly conduct of business. The track record of sponsors, a minimum experience of five years in the relevant field of Investment, financial services, integrity in business transactions and financial soundness are taken into account. The regulations also prescribe the advertisement code for the marketing schemes of Mutual Funds, the contents of the trust deed, the investment management agreement and the scheme-wise balance sheet. Mutual Funds are required to be formed as trusts and managed by separately formed as trusts and managed by separately formed Asset Management Companies (AMC). The minimum net worth of such AMC is stipulated at Rs.5 crores of which, the Mutual Fund should have a custodian who is not associated in any way with the AMC and registered with the SEBI. The minimum amount raised in closed-ended scheme should be Rs.20 Crores and for the openended scheme, Rs.50 Crores. In case, the amount collected falls short of the minimum prescribed, the entire amount should be refunded not later than six weeks from the date of closure of the scheme. If this is not done, the fund is required to pay an interest at the rate of 15 per cent per annum from the date of expiry of six weeks. In addition to these, the Mutual Funds are obliged to maintain books of accounts and provision for depreciation and bad debts. Further, the Mutual Funds are now under the obligation to publish scheme-wise annual reports, furnish six month un-audited accounts, quarterly statements of the movements of the net asset value and quarterly portfolio statements to the SEBI. There is also a stipulation that the Mutual Funds should ensure adequate disclosures to the investors. SEBI has agreed to let the Mutual Funds buy back the units of their schemes. However, the funds cannot advertise this facility in their prospectus. SEBI is also empowered to appoint an auditor to investigate into the books of accounts or the affairs of the Mutual Funds. SEBI can suspend the registration of Mutual Funds in the case of deliberate manipulation, price rigging or deterioration of the financial position of Mutual Funds. SEBI REGULATIONS, 1996 SEBI announced the amended Mutual Fund Regulations on December 9, 1996 covering Registration of Mutual Funds, Constitution and Management of Mutual funds and Operation of Trustees, Constitution and Management of Asset Management Companies (AMCs) and
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custodian schemes of MFs, investment objectives and valuation policies, general obligations, inspection and audit. The revision has been carried out with the objective of improving investor protection, imparting a greater degree of flexibility and promoting innovation. The increase in the number of MFs and the types of schemes offered by them necessitated uniform norms for valuation of investments and accounting practices in order to enable the investors to judge their performance on a comparable basis. The Mutual Fund Regulations is sued in December 1996 provide for a scheme-wise report and justification of performance, disclosure of large investments which constitute a significant portion of the portfolio and disclosure of the movements in the unit capital. The existing Asset Management Companies are required to increase their net worth from Rs.10 crores within one year from the date of notification of the amended guidelines. AMCs are also allowed to do other fund-based businesses such as providing investment management services to offshore funds, other Mutual Funds, Venture Capital Funds and Insurance Companies. The amended guidelines retained the former fee structure of the AMCs of 1.25% of weekly average Net Asset Value (NAV) up to Rs.100 crores and 1% of NAV for net assets in excess of Rs.100 crores. The consent of the investors has to be obtained for bringing about any change in the fundamental attributes of the scheme on the basis of which the unit holders had made initial investments. The regulation empowers the investor. The amended guidelines require portfolio disclosure, standardization of accounting policies, valuation norms for NAV and pricing. The regulations also sought to address the areas of misuse of funds by introducing prohibitions and restrictions on affiliate transactions and investment exposures to companies belonging to the group of sponsors of mutual funds. The payment of early bird incentive for various schemes has been allowed provided they are viewed as interest payment of early bird incentive for early investment with full disclosure. The various Mutual Funds are allowed to mention an indicative return for schemes for fixed income securities. In 1998-99 the Mutual Funds Regulation were amended to permit Mutual Funds to trade in derivatives for the purpose of hedging and portfolio balancing. SEBI registered Mutual Funds and Fund managers are permitted to invest in overseas markets, initially within an overall limit of US $500 million and a ceiling for an individual fund at US$ 50 million. SEBI made (October 8, 1999) investment guidelines for MFs more stringent. The new guidelines restrict MFs to invest no more than 10% of NAV of a scheme in share or share related instruments of a single company. MFs in rated debt instruments of a single issue is restricted to 15% of NAV of the scheme (up to 20% with prior approval of Board of Trustees or AMC). Restrictions in un- rated debt instruments and in shares of unlisted companies. The new norms also specify a maximum limit of 25% of NAV for any scheme for investment in listed group companies as against an umbrella limit of 25% of NAV of all schemes taken together earlier. SEBI increased (June 7, 2000) the maximum investment limit for MFs in listed companies from 5% to 10% of NAV in respect of open-ended funds. Changes in fundamental attributes of a scheme was also allowed without the consent of three fourths of unit holders provided the unit holders are given the exit option at NAV without any exit load. MFs are also not to make
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assurance or claim that is likely to mislead investors. They are also banned from making claims in advertisement based on past performance. Types of Mutual Fund Schemes Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position, risk tolerance and return expectations etc. The table below gives an overview into the existing types of schemes in the Industry. By Structure Open - Ended Schemes Close - Ended Schemes Interval Schemes
By Investment Objective Growth/Equity Schemes General Purpose Income/Debt Funds Money Market Guilt Funds Balanced Schemes Other Schemes
Tax Saving Schemes
Special Schemes: Sector Specific Schemes Index Schemes Open Ended Schemes The units offered by these schemes are available for sale and repurchase on any business day at NAV based prices. Hence, the unit capital of the schemes keeps changing each day. Such schemes thus offer very high liquidity to investors and are becoming increasingly popular in India. Please note that an open-ended fund is NOT obliged to keep selling/issuing new units at
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all times, and may stop issuing further subscription to new investors. On the other hand, an openended fund rarely denies to its investor the facility to redeem existing units. Close Ended Schemes The unit capital of a close-ended product is fixed as it makes a one-time sale of fixed number of units. These schemes are launched with New Fund Offer (NFO) with a stated maturity period after which the units are fully redeemed at NAV linked prices. In the interim, investors can buy or sell units on the stock exchanges where they are generally listed. Unlike open-ended schemes, the unit capital in Close-ended schemes usually remains unchanged. After an initial closed period, the scheme may offer direct repurchase facility to the investors. Close-ended schemes are usually more illiquid as compared to open-ended schemes and hence trade at a discount to the NAV. This discount tends towards the NAV closer to the maturity date of the scheme. Interval Schemes These schemes combine the features of open-ended and Close-ended schemes. They may be traded on the stock exchange or may be open for sale or redemption during pre-determined intervals at NAV based prices. Growth/Equity Schemes These schemes, also commonly called Growth Schemes, seek to invest a majority of their funds in equities and a small portion in money market instruments. Such schemes have the potential to deliver superior returns over the long term. However, because they invest in equities, these schemes are exposed to fluctuations in value especially in the short term. Equity schemes are hence not suitable for investors seeking regular income or needing to use their investments in the short-term. They are ideal for investors who have a long-term investment horizon. The NAV prices of equity fund fluctuates with market value of the underlying stock which are influenced by external factors such as social, political as well as economic. Sahara Growth Fund is the example for equity schemes.
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General Purpose Equity Schemes The investment objectives of general-purpose equity schemes do not restrict them to invest in specific industries or sectors. They thus have a diversified portfolio of companies across a large spectrum of industries. While they are exposed to equity price risks, diversified general-purpose equity funds seek to reduce the sector or stock specific risks through diversification. They mainly have market risk exposure. Sahara Wealth plus Fund is an Equity Fund which is a generalpurpose equity scheme.
Income /Debt Schemes
These schemes, also commonly known as Income Schemes, invest in debt securities such as corporate bonds, debentures and government securities. The prices of these schemes tend to be more stable compared with equity schemes and most of the returns to the investors are generated through dividends or steady capital appreciation. These schemes are ideal for conservative investors or those who are not in a position to take higher equity risks. However, as compared to the money market schemes they do have a higher price fluctuation risk and compared to a Gilt fund they have a higher credit risk. These schemes invest in money markets, bonds and debentures of corporate companies with medium and long-term maturities. These schemes primarily target current income instead of capital appreciation. Hence, a substantial part of the distributable surplus is given back to the investor by way of dividend distribution. These schemes usually declare quarterly dividends and are suitable for conservative investors who have medium to long-term investment horizon and are looking for regular income through dividend or steady capital appreciation. Sahara Income Fund is an example of Income/Debt/Bond scheme. Money Market Schemes These schemes invest in short term instruments such as commercial paper ("CP"), certificates of deposit ("CD"), treasury bills ("T-Bill") and overnight money ("Call"). The schemes are the least volatile of all the types of schemes because of their investments in money market instrument
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with short-term maturities. These schemes have become popular with institutional investors and high net-worth individuals having short-term surplus funds. Sahara Short Term Plan is an example of Money Market Scheme. Gilt Funds These primarily invest in Government Debt. Hence, the investor usually does not have to worry about credit risk since Government Debt is generally credit risk free. The investor is open to Interest risk, where the value of the securities changes in relation to the market scenario. Sahara Gilt Fund is an example of one such scheme. Balanced Schemes These schemes are also commonly called balanced schemes. These invest in both equities as well as debt. By investing in a mix of this nature, balanced schemes seek to attain the objective of income and moderate capital appreciation. Such schemes are ideal for investors with a conservative, long-term orientation. Tata Balanced Fund and Tata Young Citizen's Fund are perfect examples of such hybrid schemes. Tax Saving Schemes Investors (individuals and Hindu Undivided Families (HUFs)) are being encouraged to invest in equity markets through Equity Linked Savings Scheme ("ELSS") by offering them a tax rebate. Units purchased cannot be assigned / transferred/ pledged / redeemed / switched - out until completion of 3 years from the date of allotment of the respective Units. The Scheme is subject to Securities & Exchange Board of India (Mutual Funds) Regulations, 1996 and the notifications issued by the Ministry of Finance (Department of Economic Affairs), Government of India regarding ELSS. Subject to such conditions and limitations, as prescribed under Section 80 C of the Income-tax Act, 1961, subscriptions to the Units not exceeding Rs.1, 00, 000 would be fully tax exempt from income tax. The exemption under section 80 C of IT act is also applicable to other eligible schemes. Sahara Tax Gain Fund is an example of ELSS. Special Schemes Sector Specific Equity Schemes: These schemes restrict their investing to one or more pre-defined sectors, e.g. technology sector. They depend upon the performance of these select sectors only and are hence inherently more risky than general-purpose equity schemes. Ideally suited for informed investors who wish to take a view and risk on the concerned sector. The Tata Life Sciences and Technology Fund is an example of sector specific equity scheme. Index schemes: An Index is used as a measure of performance of the market as a whole, or a specific sector of the market. It also serves as a relevant benchmark to evaluate the performance of mutual funds.
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Some investors are interested in investing in the market in general rather than investing in any specific fund. Such investors are happy to receive the returns posted by the markets. As it is not practical to invest in each and every stock in the market in proportion to its size, these investors are comfortable investing in a fund that they believe is a good representative of the entire market. Index Funds are launched and managed for such investors. An example to such a fund is the Tata Index Fund.
Comparison of Mutual Funds with other Products/ Investment opportunities The mutual fund sector operates under stricter regulations as compared to most other investment avenues. Apart from the tax efficiency and legal comfort how do mutual funds compare with other products? Here the investment in Mutual Funds is compared with: 1. Company Fixed Deposits. 2. Bank Fixed Deposits. 3. Bonds and Debentures. 4. Equity. 5. Life Insurance
1. Company Fixed Deposits versus Mutual Funds Fixed deposits are unsecured borrowings by the company accepting the deposits. Credit rating of the fixed deposit program is an indication of the inherent default risk in the investment. The moneys of investors in a mutual fund scheme are invested by the AMC in specific investments under that scheme. These investments are held and managed in-trust for the benefit of schemes investors. On the other hand, there is no such direct correlation between a companys fixed deposit mobilization, and the avenues where these resources are deployed. A corollary of such linkage between mobilization and investment is that the gains and losses from the mutual fund scheme entirely flow through to the investors. Therefore, there can be no certainty of yield, unless a named guarantor assures a return or, to a lesser extent, if the investment is in a serial gilt scheme. On the other hand, the return under a fixed deposit is certain, subject only to the default risk of the borrower. Both fixed deposits and mutual funds offer liquidity, but subject to some differences: The provider of liquidity in the case of fixed deposits is the borrowing company. In mutual funds, the liquidity provider is the scheme itself (for open-end schemes) or the market (in the case of closed-end schemes).
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The basic value at which fixed deposits are en-cashed is not subject to market risk. However, the value at which units of a scheme are redeemed entirely depends on the market. If securities have gained in value during the period, then the investor can even earn a return that is higher than what she anticipated when she invested. Conversely, she could also end up with a loss. Early encashment of fixed deposits is always subject to a penalty charged by the company that accepted the fixed deposit. Mutual fund schemes also have the option of charging a penalty on early redemption of units (by way of an exit load). If the NAV has appreciated adequately, then despite the exit load, the investor could earn a capital gain on her investment.
2. Bank Fixed Deposits versus Mutual Funds Bank fixed deposits are similar to company fixed deposits. The major difference is that banks are more stringently regulated than are companies. They even operate under stricter requirements regarding Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR). While the above are causes for comfort, bank deposits too are subject to default risk. However, given the political and economic impact of bank defaults, the Government as well as Reserve Bank of India (RBI) tries to ensure that banks do not fail. Further, bank deposits up to Rs 1, 00, 000 are protected by the Deposit Insurance and Credit Guarantee Corporation (DICGC), so long as the bank has paid the required insurance premium of 5 paisa per annum for every Rs 100 of deposits. The monetary ceiling of Rs 100,000 is for all the deposits in all the branches of a bank, held by the depositor in the same capacity and right.
3. Bonds and Debentures versus Mutual Funds As in the case of fixed deposits, credit rating of the bond / debenture is an indication of the inherent default risk in the investment. However, unlike fixed deposits, bonds and debentures are transferable securities. While an investor may have an early encashment option from the issuer (for instance through a put option), generally liquidity is through a listing in the market. Implications of this are: If the security does not get traded in the market, then the liquidity remains on paper. In this respect, an open-end scheme offering continuous sale / re-purchase option is superior. The value that the investor would realize in an early exit is subject to market risk. The investor could have a capital gain or a capital loss. This aspect is similar to a MF scheme. It is possible for an astute investor to earn attractive returns by directly investing in the debt market, and actively managing the positions. Given the market realities in India, it is difficult for most investors to actively manage their debt portfolio. Further, at times, it is difficult to execute trades in the debt market even when the transaction size is as high as Rs 1 crore. In this respect, investment in a debt scheme would be beneficial.
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Debt securities could be backed by a hypothecation or mortgage of identified fixed and / or current assets (secured bonds / debentures). In such a case, if there is a default, the identified assets become available for meeting redemption requirements. An unsecured bond / debenture is for all practical purposes like a fixed deposit, as far as access to assets is concerned. The investment in mutual fund scheme is held by a Custodian for the benefit of all investors in that scheme. Thus, the securities that relate to a scheme are ring-fenced for the benefit of its investors. 4. Equity versus Mutual Funds Investment in both equity and mutual funds are subject to market risk. An investor holding an equity security that is not traded in the market place has a problem in realizing value from it. But investment in an open-end mutual fund eliminates this direct risk of not being able to sell the investment in the market. An indirect risk remains, because the scheme has to realize its investments to pay investors. The AMC is however in a better position to handle the situation. Another benefit of equity mutual fund schemes is that they give investors the benefit of portfolio diversification through a small investment. For instance, an investor can take an exposure to the index by investing a mere Rs 5,000 in an index fund. 5. Life Insurance versus Mutual Funds Life insurance is a hedge against risk and not really an investment option. So, it would be wrong to compare life insurance against any other financial product. Occasionally on account of market inefficiencies or mis-pricing of products in India, life insurance products have offered a return that is higher than a comparable safe fixed return security thus, you are effectively paid for getting insured! Such opportunities are not sustainable in the long run.
FUTURE OF MUTUAL FUNDS IN INDIA At the end of 2006 March, Indian mutual fund industry reached Rs. 2, 57, 499 Crores. The annual composite rate of growth is expected 13.4% during the rest of the decade. In the last 5 years we have seen annual growth rate of 9%. According to the current growth rate, by year 2010, mutual fund assets will be double. Going by the above facts and generally, mutual funds have often been considered a good route to invest and earn returns with reasonable safety. Small and big investors have both invested in instruments that have suited their needs. And so equity and debt funds have attracted investments alike. The performance of the investments, equity in particular, for the last one-year, has however been disappointing for the investors. The fall in NAVs of equity funds, and it is really steep in some, even to the extent of 60-70 percent, has left investors disgusted. Such backlash was only to be expected when funds, in a hurry to post good returns invested in volatile tech stocks. The move, though good under
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conducive market conditions, is the point of rebuttal now. Owing to volatility in market and profit warnings by some IT majors, tech stocks have been on the downhill journey and the result is fall in NAVs of most equity funds. This hurts the investor but then investments in equity are never safe. Mutual funds are not just guilty of mismanaging their risks as the recent survey by Pricewaterhouse Coopers indicates but also not educating their investors enough on the risks facing them. It is for the mutual benefit of the investors as well as mutual funds that investor is educated enough or else an agitated investor might route his investments to other avenues that are considered safe. Debt funds are safe investments and generate returns far in excess of what other so-called safe avenues such as banks generate. Despite this, the inflow of funds in debt funds and banks is by no means comparable. The factor contributing to this the lack of understanding caused by improper guidance by the intermediaries.
Till now, Investor education has been one of the issues, less cared for, by the industry. The industry focused upon the amounts and not why a person wanted to invest or whether a particular product suited him or not. While educating the customer might not have been on the cards earlier, the things are beginning to change now. With SEBI passing on the guidelines, the funds will engage in investor education. The guidelines state that funds will utilize the income earned on unclaimed money lying with them for a period exceeding three years to educate the investors. AMFI has started a certification program for intermediaries. This will be made mandatory for the intermediaries and is aimed at educating the investors about the risks attached to the schemes and to inculcate adequate skills into the intermediaries to help the investors choose the right kind of fund. Steps such as these are aimed at obliterating various flaws in the system by standardizing the knowledge base of intermediaries, as they are the interface between the investor and the funds. Although the investors themselves are also guilty of picking funds that were not suited for them, the blame cant lie square on their shoulders alone. The industry has also got to bear some of it. With such programs becoming mandatory, it can be ensured to some extent that ignorance ceases to be an aspect associated with the industry. Till now, investors have been ignorant about the kind of fund to be picked or how to select a fund. Teaching an investor how to select a fund is thus an important aspect. Educated investors can, on their part, ask pertinent questions to find funds that qualify to be in their portfolio as per their risk bearing capacity. It would not be improper to say that investor education is still the key to managing the funds handed over by investors. The investors are important to the industry and likewise, mutual funds form an important avenue for an investor. It would thus be of critical importance to educate people for an informed investor is in the best position to pick up Schemes as per his need. This would also infuse some confidence in the minds of the investors who under the current scenario seem to be losing faith on account of the falls suffered in recent times.
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An educated and informed intermediary stands the best chance of understanding the needs of the client and also of winning his confidence through proper guidance. As it is, investor education will remain a key issue for mutual funds in the longer run and educating the intermediaries will be the first step towards it. OBJECTIVES OF THE STUDY: To study Mutual Fund Industry in India. To study the different Schemes provided by Sahara Mutual Fund. To study the performance of different schemes of the Company. To understand the Risk involved in different Schemes. To study the Weekly Returns with respect to their Benchmark.
STATEMENT OF THE PROBLEM: The project deals with the Overview of Mutual Industry in India and evaluation study of Risk and Returns of Debt and Equity Schemes of Sahara Mutual Fund in comparison with their respective benchmark indices. NEED FOR THE STUDY: The evaluation study of risk and returns of Equity and Debt Schemes of Sahara Mutual Fund is useful to know the performance of schemes and it helps the investors to invest in Mutual Fund schemes either- Equity, Debt or Balanced. The performance of different schemes however helps the prospective investors to choose the best schemes that suit his objective. SCOPE OF THE STUDY: The study was limited to just finding the risk and returns associated with the schemes. The study covers the six different schemes provided by Sahara Mutual Fund. The study covers the period of past three and half months from February 10, 2006 to May 26, 2006. The study covers only the open-ended funds.
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The study does not cover the scheme Sahara Tax Gain Fund, an open ended fund, due to non availability of historical benchmark index of this scheme.
LIMITATIONS OF THE STUDY: The study was limited only to Sahara Mutual Fund schemes. Time duration for the study was very short as it was restricted to just 10 weeks. Out of eight schemes only six have been taken for analysis. The study was limited to the extent of just finding the risks and returns of each schemes of the fund.
COMPANY PROFILE Sahara Asset Management Co. Pvt. Ltd. The registered office of the AMC is situated at Units A and B, Eighth floor, Riyaz Garden, #29, Kodambakkam High Road, Chennai-34. In terms of the investment management agreement dated July 18, 1996 the trustee has appointed Sahara Asset Management Company Pvt. Ltd. to manage the Mutual Fund. The paid up share capital of the AMC is Rs. 25.80 Crores. The Sahara Asset Management Company was sponsored by Sahara India Financial Corporation Ltd (SIFL) which is the flagship company of Sahara India Group. Incorporated in 1987, SIFL is the First Residuary Non-Banking Company (RNBC) in India that has been granted certificate of registration by RBI and is considered to be a leading public deposit mobilization company in the private sector. The Sahara India Group has over the years emerged as a multi-service and multi-product business conglomerate with diverse interests in fields such as Aviation, Life Insurance, Para banking, Housing, Infrastructure & Tourism, Consumer products, Media& Entertainment. TABLE 4 No. of Schemes Number of Schemes including options Debt Schemes Short term debt Schemes Gilt Fund Equity Schemes
08 35 02 01 01 04
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Recently, Sahara Mutual Fund has launched Open-ended equity fund Sahara Wealth plus Fund. The objective of the scheme is to generate long-term capital growth from a diversified portfolio of predominantly equity and equity related instruments. It is estimated that, the fund will invest 70%-100% in equity & equity related securities and 0-30% in debt and money market Instruments. Out of 0-30% in debt and money market instruments 0-20% will be in securitized debt. The scheme offers growth, dividend and dividend reinvestment options. The following are the main features of this new scheme: Simply timeless Simply trustworthy Simply unstructured Simply consistent Sahara Mutual Fund also pioneered several service initiatives that helped to increase transactional ease. It was the first mutual fund to initiate: Across the counter redemptions for all classes of investors in liquid funds. Next day redemptions for non-liquid funds. Phone transacts service wherein investors can redeem without having any Personal Identification Numbers.
PRODUCT PROFILE
Different products/Schemes of Sahara Mutual Fund I. EQUITY ORIENTED SCHEMES Equity-oriented schemes are popularly known as Growth schemes. Since they invest a majority of their funds in equities, these schemes deliver higher returns in the long run, and are hence ideal for investors who have a long term investment horizon. Since the value of equity funds fluctuate with changes in the social, political and economic scenarios, equity-oriented schemes are not suitable for investors seeking regular income or returns in the near future. Sahara Mutual Fund offers four equity-oriented schemes:
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Sahara Growth Fund Sahara Tax Gain Fund Sahara Mid Cap Fund Sahara Wealth Plus Fund
II. DEBT - ORIENTED SCHEMES Debt-oriented schemes are also known as Income schemes. Since these schemes invest in debt securities such as debentures, bonds and government securities, their prices are more stable than those of equity-oriented schemes. It is for this reason that debt-oriented schemes are preferred by medium-risk investors such as retired individuals who may be unable to take high equity risks. While they are more stable than equities, debt-oriented schemes fluctuate more than money market schemes and are subject to a higher credit risk than gilt funds, which invest in government debt. Sahara Mutual Fund offers four debt-oriented schemes: Sahara Short Term Plan Sahara Income Fund Sahara Liquid Fund Sahara Gilt fund
I) 1. Sahara Growth Fund Scheme Objective: The investment objective of the scheme is to achieve capital appreciation by investing in equity and equity related instruments. Scheme Type: Open ended growth fund Investor Profile: Ideal for investors seeking high returns at a relatively medium risk across long horizon. Investment Option: Investors under the Sahara Growth Fund have the choice of Growth, Dividend payout Option & Dividend Reinvestment Option. Inception Date: March 30, 2011 Benchmark Index: S & P CNX Nifty
2. Sahara Tax Gain Fund
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Investment Objective: The Objective of the scheme is to provide immediate tax relief and long term growth of capital investors. Scheme Type: An open ended Equity Linked Saving Scheme (ELSS). Investor Profile: Ideal for investors seeking high returns at alternatively medium risk across long term horizon by investing in equity & equity related instruments. Investment Option: Investors under the Sahara Tax Gain Fund have the choice of Growth, Dividend payout, Dividend Reinvestment Option. Inception Date: March 30, 2011 Benchmark Index: BSE 200 Index
3. Sahara Midcap Fund Investment Objective: The investment objective of the scheme is to achieve long term capital growth at medium level of risks by investing primarily in mid-cap stocks. The investment manager will have the discretion to invest up to 100% of the assets in the portfolio in equity/equity related instruments at a given point of time. Scheme Type: An open ended growth fund Investor profile: Ideal for investors seeking high returns at relatively medium risk across long term horizon. Investment Option: Investors under the Sahara Mid Cap Fund have the choice of Growth plan, Dividend plan, Growth Auto-payout plan and Bonus plan. Inception Date: March 31, 2011 Benchmark index: CNX Midcap Index 4. Sahara Wealth plus Fund Investment Objective: The primary objective of the scheme would be to invest in equity & equity related instruments of companies that would be wealth builders in the long term. Scheme Type: open- ended growth fund Investor profile: Ideal for investors seeking high returns at relatively medium risk across long term horizon. Investment Option: Investors under the Sahara Wealth plus Fund have the choice of Variable pricing option and Fixed pricing option. Sub options: Under variable pricing option Growth, Dividend, Dividend Reinvestment option. Inception Date: April 30, 2011 Benchmark Index: S & P CNX 500 II) 1. Sahara Short Term Plan Investment Objective: The primary objective of the scheme would be to generate regular income and secondary objective is growth of capital through investment in debt instruments, money market and related instruments, whilst at all times emphasizing the importance of capital preservation.
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The overall objective of Sahara Short term plan would be in consonance with the investment objective of Sahara Income Fund, however the specific objective is to generate returns that would Endeavour to generate returns in line with Mibor linked short term papers with daily call/put option. Scheme Type: open- ended short term plan. Investor profile: Ideal for investors who have a short term investment horizon and wish to avoid high volatility but expect superior returns than liquid Funds. Investment Option: Investors under the Sahara Short term plan have the choice of growth, Dividend payout and Dividend Reinvestment option. Inception date: March 30, 2011 Benchmark Index: CRISIL Liquid Fund Index 2. Sahara Income Fund Investment Objective: The primary objective of the scheme would be to generate regular income and secondary objective is growth of capital through investment in debt instruments, money market and related instruments, whilst at all times emphasizing the importance of capital preservation. Scheme Type: open- ended Income Fund. Investor profile: Ideal for investors seeking reasonable returns at relatively low risk across a medium to long term investment horizon. Investment Option: Investors under the Sahara Income Fund have the choice of Growth, Dividend payout and Dividend Reinvestment option. Inception date: February 21, 2011 Benchmark Index: CRISIL Composite Bond Fund Index
3. Sahara Liquid Fund Investment Objective: To create a highly liquid portfolio of good quality debt as well as money market instruments with a view to provide high liquidity and reasonable returns to the Unit holders. Scheme Type: open- ended Liquid Fund. Investor profile: Ideal for investors who wish to park their short term surpluses at relatively low risk. Corporate and High Net Worth investors who have temporary surpluses can benefit from this scheme. Investment Option: Investors under the Sahara Liquid Fund have the choice of Growth and Dividend Reinvestment options. Inception date: February 19, 2011 Benchmark Index: CRISIL Liquid Fund index
4. Sahara Gilt Fund
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Investment Objective: To generate risk free return and thus provide medium to long term capital gains with income distribution along with capital gains tax relief to its Unit holders, at all times emphasizing the importance of capital preservation. Scheme Type: open- ended Gilt Fund. Investor profile: Ideal for investors with low-moderate risk appetite, PF trusts, financial institutions/Banks & Corporate. Investment Option: Investors under the Sahara Gilt Fund have the choice of Growth, Dividend payout and Dividend Reinvestment option. Inception date: February 21, 2011 Benchmark Index: I Sec Composite Index
DESIGN OF THE STUDY
INTRODUCTION: A detail study is done on various Investment Schemes provided by Sahara Mutual Fund. Analysis is done on the Risk and Returns of Debt and Equity Scheme provided by the organization. Where it is useful to the investors to mobilize the savings in the respective schemes provided by the Company.
RESEARCH DESIGN: A Research design is a method and procedure for acquiring information needed to solve the problem. A research design is the basic plan that helps in the data collection or analysis. It specifies the type of information to be collected the sources and data collection procedure. METHOD OF RESEARCH DESIGN USED UNDER STUDY IS: DESCRIPTIVE RESEARCH: Descriptive research is study of existing facts to come to a conclusion. In this research an attempt has been made to analyze the past performance of the Sahara Mutual schemes and to know the benefits to the investors. The study is done on different schemes provided by the company to know the companys performance for the past few months and to know the risk and returns of the funds. OPERATIONAL DEFINITIONS OF THE CONCEPT RISK: The dictionary meaning of risk is the possibility of loss or injury. Any rational investor, before investing his/her investible wealth in the security, analyzes the risk associated with a particular security. The actual return he receives from a security may vary from his expected return and the risk is expressed in term of variability of return. The down side of risk may be caused by several factors, either common to all securities or specific to a particular security. Investor in general
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would like to analyze the risk factors and a thorough knowledge of a risk helps him to plan his portfolio in such a manner so as to minimize risk associated with the investment. Risk consists of two components: The systematic risk. The unsystematic risk. The systematic risk is caused by the factors external to a particular company and uncontrollable by the company. The systematic risk affects the market as a whole. In case of unsystematic risk the factors are specific, unique and related to a particular industry or company. Systematic Risk: The systematic risk affects the entire market. The economic conditions, political situations and the sociological changes affect the security market. These factors are beyond the control of the corporate and the investor. The investor cannot avoid them. This is subdivided into: i. Market Risk ii. Interest Rate Risk iii. Purchasing Power Risk. Unsystematic Risk: The unsystematic risk is unique and peculiar to a firm or an industry. Unsystematic Risk stems from managerial inefficiency, technological change in the production process, availability of raw material, changes in the customer preference, and labour problems. The nature and magnitude of the above-mentioned factors differ from industry to industry, and company to company. They have to be analyzed separately for each industry and firm. Broadly, unsystematic risk can be classified into: i. Business Risk ii. Financial Risk Risk Measurement: Understanding the nature of risk is not adequate unless the investor or analyst is capable of expressing it in some quantitative terms. Measurements cannot be assured of cent percent accuracy because risk is caused by numerous factors such as social, political, economic and managerial efficiency. The statistical tools used to quantify risk are: i. Standard Deviation: a. A measure of the dispersion of a set of data from its mean. The more spread apart the data is, the higher the deviation.
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b. In finance, standard deviation is applied to the annual rate of return of an investment to measure the investment's volatility (risk). A volatile stock would have a high standard deviation. In mutual funds, the standard deviation tells us how much the return on the fund is deviating from the expected normal returns. Standard deviation can also be calculated as the square root of the variance. ii. Beta: Beta describes the relationship between the securities return and the index returns. Beta = + 1.0 One percent change in market index returns causes exactly one percent change in the security return. It indicates that the security moves in tandem with the market. Beta = + 0.5 One percent changes in the market index return causes 0.5 percent change in the security return. The security is less volatile compared to the market. Beta = + 2.0 One percent change in the market index return causes 2 percent change in the security return. The security return is more volatile. When there is a decline of 10% in the market return, the security with beta of 2 would give a negative return of 20%. The security with more than 1 beta value is considered to be risky. Negative Beta Negative beta value indicates that the security return moves in the opposite direction to the market return. A security with a negative beta of -1 would provide a return of 10%, if the market return declines by 10% and vice-versa.
RATE OF RETURN: The compounded annual return on a mutual fund scheme represents the return to investors from a scheme since the date of issue. It is calculated on NAV basis or price basis. On NAV basis it reflects the return generated by the fund manager on NAV. On price basis it reflects the return to investors by way of market or repurchase price Net Asset Value (NAV): The net asset value of the fund is the cumulative market value of the assets fund of its liabilities. In other words, if the fund is dissolved or liquidated, 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 tumbler of units. However, most people refer
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loosely to the NAV per unit as NAV, ignoring the per unit. We also abide by the same convention. Computation of Net Asset Value The Net Asset Value (NAV) of the units will be determined as of every working day and for such other days as may be required for the purpose of transaction of units. The NAV shall be calculated in accordance with the following formula, or such other formula as may be prescribed by SEBI from time to time. Market /Fair value of schemes investments + Receivables + Accrued Income + Other Assets Accrued Expenses Payables Other Liabilities -------------------------------------------------------------------------------------Number of Units Outstanding
NAV =
METHODOLOGY OF DATA COLLECTION: SOURCES OF DATA: SECONDARY DATA used for the study: Internet sources. Newspapers. Announcements and publishings by the company.
CONCEPTUAL DESIGN: Sample unit: Schemes of Sahara Mutual Fund. Sample size: 16 weeks NAV of the Schemes. Sampling Procedure: Direct.
SCHEMES CONSIDERED FOR THE EVALUATION STUDY In this project I have considered total of six schemes. Their relative Benchmark Indices are: SAHARA INCOME FUND CRISIL COMPOSITE BOND INDEX SAHARA SHORT TERM FUND CRISIL LIQUID FUND INDEX
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SAHARA LIQUID FUND CRISIL LIQUID FUND INDEX SAHARA GILT FUND I SEC COMPOSITE INDEX SAHARA GROWTH FUND S&P CNX NIFTY SAHARA MIDCAP FUND S&P CNX MIDCAP INDEX
TOOLS & TECHNIQUES USED FOR THE STUDY To analyze the data in the project various statistical tools are used. They are: i. Beta: = NXY(X)(Y) NY2 (Y)2 = Beta of the fund; N = Number of Observations; X = Weekly return of NAV; Y = Weekly return of the Index. ii. Standard Deviation: =
d=(XX/) Where = Standard Deviation; N = Number of observations; d = Deviations from actual mean;
iii. Rate of Return for a period: X= Where, A = NAV at the end of the period of the period; B = NAV at the beginning of the period; D = Dividend paid during the period;
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ANALYSIS AND INTEPRETATIONS 1. The table showing the weekly returns of CRISIL Composite Bond Fund Index and that of Sahara Income Fund
Index date 10/01/2011 17/01/2011 24/01/2011 03/02/2011 10/02/2011 17/02/2011 24/02/2011 03/03/2011 10/03/2011 17/03/2011 24/03/2011 31/03/2011 07/04/2011 14/04/2011 21/04/2011 28/04/2011
Index value
5904.600 5922.624 5940.828 5959.046 5977.281 5995.531 6013.794 6032.067 6050.354 6068.664 6086.987 6105.371 6123.769 6142.183 6160.606 6179.046
Weekly returns ----0.363% 0.044% 0.187% 0.136% -0.022% -0.083% 0.148% 0.293% 0.149% 0.019% 0.114% 0.138% 0.079% 0.192% 0.082%
NAV in Rs 18.0236 18.2047 18.2179 18.2347 18.2504 18.2626 18.2730 18.2874 18.3100 18.3230 18.3836 18.3979 18.4143 18.4233 18.4395 18.4509
Dividend -----------------------------------------------------------------
Returns ----0.084% 0.073% 0.092% 0.086% 0.067% 0.057% 0.079% 0.124% 0.071% 0.331% 0.078% 0.089% 0.049% 0.088% 0.062%
RISK CALCULATIONS The table showing the calculation of Beta and Standard Deviation of Sahara Income Fund X 0.084 0.073 0.092 D -0.003893 -0.014893 0.004106 d 0.000051 0.022180 0.000016 Y 0.363 0.044 0.187 Y 0.131769 0.001936 0.034969 X*Y 0.030492 0.003212 0.017204
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0.086 0.067 0.057 0.079 0.124 0.071 0.331 0.078 0.089 0.049 0.088 0.062 1.3184 -0.001893 -0.020893 -0.030893 -0.008899 0.036106 -0.016893 0.243106 -0.009893 0.001106 -0.038893 0.000106 -0.258933 -0.121446 0.000003 0.000436 0.000954 0.000079 0.001303 0.000285 0.059100 0.000097 0.000122 0.001512 0.00000001 .067046298 0.153184 0.136 -0.022 -0.083 0.148 0.293 0.149 0.019 0.114 0.138 0.079 0.192 0.082 1.839 0.018496 0.000484 0.006889 0.021904 0.085849 0.022201 0.000361 0.012996 0.019044 0.006241 0.036864 0.006724 0.219073 0.011696 -0.00147 -0.00473 0.011692 0.036332 0.010579 0.006289 0.008892 0.012282 0.003871 0.016896 0.005084 0.163237
N=15; =; 1.3184 Y = 1.839; Y = 0.219073; XY = 0.163237; = 0.007384;
d = -0.12144; d = -0.12144; d = 0.153184; = 0.1007308
CALCULATION OF BETA AND STANDARAD DEVIATION FOR SAHARA INCOME FUND = [15*0.163237 (1.3184) (1.839)]/[15*0.219073 (0.1839) = [2.448555 2.4245376]/[3.286095 0.03381921] = [0.0240174/3.25227579] = 0.007384798
2
= = ( ) )
= 0.010212266 (
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= 0.010212266 - 0.00006555 = 0.010146714 = 0.1007308
Inference: As the is less than 1 it can be said that the scheme is less risky. For One percent change in the market index causes 0.007384 percent change in the scheme return. The scheme is less volatile compared to the market. The Standard Deviation of the scheme is 0.1007308.which means the schemes returns vary with the index to the extent of 0.1007308. 2. The table showing the weekly returns of CRISIL Liquid Fund Index And that of Sahara Short -Term Fund Index Date Index Value
1669.00
Weekly Returns ----0.090 0.076 0.091 0.079 0.096 0.083 0.059 0.104 0.896 0.111 0.090 0.099 0.074 0.085 0.084
NAV in Rs
DIVIDEN D ----------------------------------------------------------------
RETURNS
10/01/2011 17/01/2011 24/01/2011 31/01/2011 07/02/2011 14/02/2011 21/02/2011 28/02/2011 07/03/2011 14/03/2011 21/03/2011 28/03/2011 04/04/2011 11/04/2011 18/04/2011 25/04/2011
18.02360 18.02361 18.02374 18.02386 18.02397 18.02408 18.02419 18.02432 18.02443 18.02459 18.02554 18.02569 18.02584 18.02600 18.02617 18.02633
1669.02 1669.02 1669.02 1669.02 1669.02 1669.02 1669.02 1669.02 1669.02 1669.02 1669.02 1669.02 1669.02 1669.02 1669.02
----0.007% 0.073% 0.067% 0.058% 0.062% 0.060% 0.070% 0.066% 0.085% 0.526% 0.084% 0.084% 0.088% 0.094% 0.091%
RISK CALCULATIONS The table showing the calculation of Beta and Standard Deviation of
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Sahara Short -Term Fund X 0.007 0.073 0.067 0.058 0.062 0.060 0.070 0.066 0.085 0.526 0.084 0.084 0.088 0.094 0.091 1.515 N=15; X=1.515; Y = 2.117000; Y=0.911589; XY=0.211351; = -0.00402; d -0.094 -0.028 -0.034 -0.043 -0.039 0.041 -0.031 -0.035 -0.016 0.425 -0.017 -0.017 -0.013 -0.07 -0.10 -0.071 d 0.008836 0.000784 0.001156 0.001849 0.001521 0.001681 0.000961 0.001225 0.000256 0.180625 0.000289 0.000289 0.000169 0.0049 0.01 0.214252 Y 0.090 0.076 0.091 0.079 0.096 0.083 0.059 0.104 0.896 0.111 0.090 0.099 0.074 0.085 0.084 2.117000 Y 0.0081 0.00577 0.008281 0.006241 0.009216 0.006889 0.003481 0.010816 0.802816 0.012321 0.0081 0.009801 0.005476 0.007225 0.007056 0.911589 X*Y 0.00063 0.005548 0.006097 0.004582 0.005952 0.00498 0.00413 0.006864 0.07616 0.058386 0.00756 0.008316 0.006512 0.00799 0.007644 0.211351
d = -0.071; d = 0.214252; = 0.1194196;
CALCULATION OF BETA AND STANDARD DEVIATION FOR SAHARA SHORT TERM FUND ==[ = 15*0.211351 (1.515) (2.117000)]/[15*0.911589 (2.117000) = [3.170265 3.207255]/[13.673835 4.481689] = [-0.03699/9.192146] = -0.00402408 =
2
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= ( )
= 0.119419686 Inference: The beta of the scheme is negative. This means that the scheme is moving in the opposite direction to that of the market. If the market declines by 1 percent then the scheme gains by 0.00402408 percent. The standard deviation of the scheme is 0.119419686, which means the fund does not have much variation in the returns. 3. The table showing the weekly returns of I-Sec Composite Index And that of Sahara Gilt Fund Index date 10/02/2011 17/02/2011 24/02/2011 03/03/2011 10/03/2011 17/03/2011 24/03/2011 31/03/2011 07/04/2011 14/04/2011 21/04/2011 28/04/2011 05/05/2011 12/05/2011 19/05/2011 26/05/2011 Index value
5904.600 5921.602 5938.604 5955.607 5972.609 5989.612 6006.615 6023.618 6040.621 6057.625 6074.628 6091.632 6108.635 6125.639 6142.643 6159.647
Weekly returns ----0.714% 0.182% 0.354% 0.177% -0.407% -0.508% 0.226% 0.655% 0.311% -0.154% 0.177% 0.188% 0.095% 0.426% 0.109%
NAV in Rs Dividend
17.00200 ----17.00236 ----17.00248 ----17.00261 ----17.00278 ----17.00285 ----17.00291 ----17.00314 ----17.00344 ----17.00356 ----17.00359 ----17.00374 ----17.00393 ----17.00396 ----17.00413 ----17.00421 -----
Returns ---0.209% 0.075% 0.077% 0.099% 0.041% 0.036% 0.136% 0.173% 0.073% 0.014% 0.092% 0.110% 0.018% 0.098% 0.050%
RISK CALCULATIONS The table showing the calculation of Beta and Standard Deviation of Sahara Gilt Fund X 0.209 0.075 D 0.122266 7 0.011733 d 0.014949 1 0.000137 66 Y 0.714 0.182 Y 0.609796 0.033124 X*Y 0.149226 0.01365
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0.077 0.099 0.041 0.036 0.136 0.173 0.073 0.014 0.092 0.110 0.018 0.098 0.050 1.301 0.009733 0.012267 0.045733 0.050733 0.049267 0.086267 0.013733 0.072733 0.005267 0.023267 0.068733 0.011267 0.036733 0.000004 7 0.000094 731 0.000150 479 0.002091 507 0.002573 837 0.002427 237 0.007441 995 0.000188 595 0.005290 089 0.000027 741 0.000541 353 0.004724 225 0.000126 945 0.001349 313 0.019690 256 0.354 0.177 -0.407 -0.508 0.226 0.655 0.311 -0.154 0.177 0.188 0.095 0.426 0.109 2.545 0.125316 0.031329 0.165649 0.258064 0.051076 0.429025 0.096721 0.023716 0.031329 0.035344 0.009025 0.181476 0.011881 2.092871 0.027258 0.017523 -0.01668 -0.01828 0.030736 0.113315 0.022703 -0.00215 0.016284 0.02068 0.00171 0.041748 0.00545 0.423173
N=15; X=1.301; Y = 2.545; Y=2.092871; XY=0.423171; =0.121870088;
d = 0.0000047; d = 0.0196902; = 0.036230977;
CALCULATION OF BETA AND STANDARD DEVIATION FOR SAHARA GILT FUND = = [15*0.423171 (1.301) (2.545)]/[15*2.092871 (2.545) = [6.347565 3.311045]/[31.393065 6.477025] = [3.03652/24.91604] = 0.121870088
2
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Inference: As the is less than 1 it can be said that the scheme is less risky. For One percent change in the market index causes 0.121870088 percent change in the scheme return. The scheme is less volatile compared to the market. The standard deviation of the scheme is 0.036230977 which expresses the extent of variability of returns to the index.
5. The table showing the weekly returns of S&P CNX Nifty Index And of Sahara Growth Fund
Index date
Index Value
Weekly Returns
NAV Rs
in DIVIDEN D
RETURN S ---0.113% 0% -1.035% 0% 1.806% 2.585% 2.258% 1.011% 1.777% 0.571% 4.987% -1.402% 3.105%
10/02/2011 17/02/2011 24/02/2011 03/03/2011 10/03/2011 17/03/2011 24/03/2011 31/03/2011 07/04/2011 14/04/2011 21/04/2011 28/04/2011 05/05/2011 12/05/2011
5904.600 ----5981.601 6058.602 6135.595 6212.588 6289.594
77.00000 ----77.00087 77.00087 76.9929 76.9929 77.00681
0.505% 0.672% 2.656% -0.006% 1.850%
---------------------
6366.621 0.452% 6443.665 6520.717 6597.783 6674.853 6751.961 6829.059 6906.18
77.02671 ----77.0441 77.05189 77.06559 77.06999 77.10842 77.09761 77.12155
0.073% 2.859% 2.145% -1.484% 2.156% -1.878% 1.759%
-----------------------------
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SRN ADARSH COLLEGE

19/05/2011 26/05/2011
6983.326 7060.489
2.507% 2.867%
77.14617 77.16248
---------
3.193% 2.114%
RISK CALCULATIONS The table showing the calculation of Beta and Standard Deviation of Sahara Growth Fund X 0.113 0 -.035 0 1.806 2.585 2.258 1.011 1.777 0.571 4.987 -1.402 3.105 3.193 2.114 21.768 N=15; X=21.768; Y =17.133; Y=52.1443; XY=44.17012; D -1.3382 -1.4512 -1.812 -1.4512 0.3548 1.1338 0.8068 -0.4402 0.3258 -0.8802 3.5358 -2.8532 1.6538 1.7418 0.6628 -0.0108 d 1.70779 2.10598 3.28334 2.10598 0.12588 1.28550 0.65092 0.19377 0.10614 0.77475 12.5018 8.14075 2.73505 3.03386 0.43930 39.19081 Y 0.505 0.672 2.656 -0.006 1.850 0.452 0.073 2.859 2.145 -1.484 2.156 -1.878 1.759 2.507 2.867 17.133 Y 0.25502 0.45158 7.05433 0.000036 3.4225 0.204304 0.005329 8.173881 4.601025 2.202256 4.648336 3.526884 3.094081 6.285049 8.219689 52.1443 X*Y 0.057065 0 -0.09296 0 3.3411 1.16842 0.166805 2.890449 3.811665 -0.84736 10.751972 2.632956 5.461695 8.004851 6.060838 44.17012
d = -0.0108; d = 39.19081; = 1.61639;
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SRN ADARSH COLLEGE

=0.592685; CALCULATION OF BETA AND STANDARD DEVIATION FOR SAHARA GROWTH FUND = [15*44.17012 (21.768) (17.133)]/[15*52.1443 (17.133) = [662.5518 372.951144]/[782.1645 293.5396] = [289.600656/488.6249] = 0.592685 = =239.190810.01081515 = 0.000116642.612720667225 = 2.612720149 = 1.616391088 Inference: As the is less than 1 it can be said that the scheme is less risky. For One percent change in the market index causes 0. 592685 percent change in the scheme return. The scheme is less volatile compared to the market. The returns of the scheme have varied with the deviation of 1.61639 with the benchmark index. 6. The table showing the weekly returns of CNX MIDCAP Index And of Sahara Midcap Fund Index date 10/02/2011 17/02/2011 24/02/2011 03/03/2011 10/03/2011 17/03/2011 24/03/2011 31/03/2011 Index Value
7323.55 7325.847 7325.823 7323.885 7323.392 7326.168 7329.487 7333.818
2
Weekly Returns ----2.297 -0.024 -1.938 -0.493 2.776 3.319 4.331
NAV in Rs
DIVIDEND ---------------------------------
RETURNS ----2.683% 2.664% -4.831% -0.082% 2.115% 3.178% 4.053%
27 27.00724 27.01444 27.00139 27.00117 27.00688 27.01546 27.02641
42
SRN ADARSH COLLEGE

07/04/2011 14/04/2011 21/04/2011 28/04/2011 05/05/2011 12/05/2011 19/05/2011 26/05/2011
7335.017 7336.442 7336.602 7340.184 7338.21 7340.347 7342.928 7345.697
1.199 1.425 0.160 3.582 -1.974 2.137 2.581 2.769
27.0247 27.0317 27.03762 27.05266 27.04971 27.05494 27.06317 27.0665
---------------------------------
-0.633% 2.589% 2.193% 5.561% -1.090% 1.934% 3.042% 1.229%
RISK CALCULATIONS The table showing the calculation of Beta and Standard Deviation of Sahara Midcap Fund X 2.683 2.664 -.831 -.082 2.115 3.178 4.053 -0.633 2.589 2.193 5.561 -1.090 1.934 3.042 1.229 D 1.042667 1.023667 -6.471333 -1.72233 0.474667 1.537667 2.412667 -2.27333 0.948667 0.552667 3.92067 -2.273033 0.29367 1.401667 -0.41133 d 1.08715447 1.04789412 41.8781508 2.966240629 0.22530876 2.364419803 5.820962053 5.168029289 0.899969076 0.305440812 15.37165325 5.166679019 0.086242068 1.964670379 0.169192368 Y 2.297 -0.024 -1.938 -0.493 2.776 3.319 4.331 1.199 1.425 0.160 3.582 -1.974 2.137 2.581 2.769 Y 5.276209 0.000576 3.755844 0.243049 7.706176 11.015761 18.757561 1.437601 2.030625 0.0256 12.830724 3.896676 4.566769 6.661561 7.667361 X*Y 6.612851 -.063936 9.362478 0.040426 5.87124 10.547782 17.5535 0.758967 5.257288125 0.35088 19.919502 2.15166 4.132958 7.851402 3.403101
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SRN ADARSH COLLEGE

24.605 N=15; X=24.605; Y=50.223402; =3.292132102; 0.45732 84.52218377 22.147 50.223402 94.02009913
Y = 22.147; XY=94.02009913;
d = 0.45732; d = 84.52218377; =2.373580151;
CALCULATION OF BETA AND STANDARD DEVIATION FOR SAHARA MIDCAP FUND
= [15*94.02009913 (24.605) (22.147)]/[15*50.223402 (22.147) = [1410.301487-544.926935]/[753.35103-490.4896] = [865.374552/262.86143] = 3.292132102 = =284.522183770.457321515 = 0.2091415825.634812251225 = 05.6348122510.000929518144 = 5.633882733 = 2.373580151 Inference: The beta of the scheme is more than +2 means the scheme is prone to more risk. This means that the scheme is more volatile. If the market declines by 1 percent then the scheme also declines but by 3%percent or more. The standard deviation of the scheme is 2.373580151, which means the fund has very much variation in the returns when compared with its benchmark index CNX Midcap Index.
2
HYPOTHESIS H : There is no significant difference in the risk and returns between Sahara Mutual Fund
0
schemes. H : There is significant difference in the risk and returns between Sahara Mutual Fund schemes.
A
44
SRN ADARSH COLLEGE
Income fund 113.648392 113.840364 114.009006 114.220519 114.417252 114.571334 114.7041 114.886242 115.173678 115.339008 116.10709 116.290342 116.499642 116.614081 116.821511 116.968551
Short term fund 111.4861457 111.5030403 111.6678293 111.8179354 111.9490964 112.0888038 112.224361 112.3833212 112.5339072 112.7270593 113.9236023 114.1158063 114.3081723 114.511401 114.7276632 114.9376968
Liquid fund 104.831 104.8289 104.831 104.8289 104.8289 104.8289 104.8289 104.8289 104.8289 104.8289 104.8289 104.8289 104.8289 104.8289 104.8289 104.8289
Gilt fund 108.839143 109.29657 109.461814 109.63137 109.849265 109.941516 110.021219 110.2416 110.62622 110.788255 110.819834 111.024154 111.270852 111.31305 111.532609 111.644582
Growth fund 308.0025 308.7049 308.7049 302.4121 302.4121 313.6441 330.5124 345.96 353.0641 365.9569 370.1776 410.0625 398.8009 424.7721 453.2641 473.0625
Mid cap fund 117.7963 124.3827 131.2858 119.4627 117.5078 122.6423 130.8278 142.115 140.3325 147.8924 154.5994 173.3436 169.5829 176.3398 187.5804 192.2798
1. X2 = 15212.0708 2. X2 = 15212.0708 N 96 = 158.4590711 3. Sum of squares of funds = 115.2569446 + 112.9316151 + 104.82919 + 110.3938784 + 360.594606 + 146.7482 = 950.7544264 4. Total sum of squares = 15212.0708 - 158.4590711 = 15053.61175 5. Sum of squares due to different fund = 950.7544264 - 158.4590711 = 792.2953554
45
SRN ADARSH COLLEGE
ANOVA TABLE Sources of variance Between funds Error Total Hypothesis Testing: F cal < F tab then H0 is accepted F cal > F tab then HA is accepted Conclusion: Since F cal is less than F tab, H0 i.e., null hypothesis is accepted. Sum of Degrees squares freedom 792.2953554 5 14261.3164 15053.61175 90 95 of Mean square 158.4590711 158.4590711 F cal 1 F tab 2.30
46
SRN ADARSH COLLEGE
FINDINGS SUGGESTIONS AND CONCLUSIONS

FINDINGS: The research project was done about Sahara Asset Management Company Pvt Ltd and the data collected for the project was for a period of three months i.e. from February 10, 2011 to May 26, 2011. And on the collected data, study was done and the following were the findings: The Sahara Income Fund has given good returns for the investors in this period. The beta of the fund is 0.0073. The Standard Deviation of the fund is 0.10073 The Sahara Short-Term Fund has not given stable returns to the investors. The beta of the fund is -0.00402. The Standard Deviation of the fund is 0.11941. The returns of the Sahara Liquid Fund have been very good in this period. The beta of the fund is 0.00026180. The Standard Deviation of the fund is 0.0007174580. The Sahara Gilt Fund has given stable returns for the investors. The beta of the fund is 0.12187. The Standard Deviation of the fund is 0.036230977. The Sahara Growth Fund has given varied returns to the investors. The beta of the scheme is 0.5926. The Standard Deviation of the fund is 1.61639. The returns of the Sahara Midcap Fund are positive but the scheme is prone to more risk. Due to which beta of the scheme is 3.9213. The Standard Deviation of the fund is 2.373580151.
SUGGESTIONS AND CONCLUSIONS
47
SRN ADARSH COLLEGE

RECOMMENDATIONS: The Beta of Sahara Midcap Fund is 3.2921. Therefore the Company should try to reduce the high risk associated with Sahara Midcap fund by wisely selecting the portfolio for investments and thereby reducing the risks. Since Sahara Midcap Fund has very high Beta i.e. it describes the volatility attached with this particular scheme the companys fund managers should take necessary steps to in the interests of the investors so as not to expose their investments to such magnitude of volatility. Sahara Income Fund has a beta of 0.0073 hence the scheme is less volatile than the market, and it is less volatile than the market. The scheme should generate reasonable returns while maintaining safety and providing investor superior liquidity. Although it is not beating the index it is giving consistent returns and regular dividends are possible. The Sahara Gilt Fund has a beta of 0.12187 so it means its the scheme is less volatile. So the company should harness on it by excessively advertising its benefits and in turn invite investors to invest whose risk appetite is less. The company should educate the HNIs, Corporate, Banks, and other cooperative societies about the merits of this product and try to induce them to invest. The returns of the Sahara Short Term Fund have varied very much the objective of the scheme to generate returns in line with Mibor linked short term papers with call/put option and to give stable income to the investors. The Beta of the scheme is negative which indicates the fact that it doesnt move with the market sometimes. In short it explains its inconsistency. The standard deviation of the Equity funds like the Sahara Growth Fund and Sahara Midcap Fund is high, so the company should try to reduce the risk involved by reducing the standard deviation of the fund.
CONCLUSIONS: From the findings it can be concluded that: The beta of Sahara Income Fund is 0.007384798 hence can be said the scheme is less volatile compared to the market. The Sahara Short-Term Fund has not given stable returns the beta of the fund is 0.00402408 that means the fund is less volatile than the market but its inconsistency in movement with the market is a major concern. The beta of the fund is negative which means the fund moves in the opposite direction to that of the market.
48
SRN ADARSH COLLEGE

Sahara Liquid Fund has the beta of 0.00026180 this means for every 1% change in the market index causes 0.00026180 change in the scheme return. The scheme is almost volatile free when compared to the market. Sahara Gilt Fund has given a stable return with the standard deviation of 0.03623. Under its own category it is doing exceptionally well. The standard deviation of the Equity schemes of Sahara Mutual Fund viz. Sahara Growth Fund and Sahara Midcap Fund are high which means the returns of these funds have varied from the average return of the respective funds.
49
SRN ADARSH COLLEGE
BIBLIOGRAPHY BOOKS REFERRED Investment and Portfolio Management by Prasanna Chandra. Security Analysis and Portfolio Management by Punithavathy Pandian. Security Analysis and Portfolio Management by V.K.Bhalla. Investment Management by Preeti Singh. Indian Financial System by M.Y.Khan. Invest India Economic Foundations Mutual Fund Industry guide. MAGAZINES ICFAI university presss monthly periodical journal CHARTERED FINANCIAL ANALYST. Outlook Money by fortnightly magazines. Business Today. Business World. NEWS PAPERS Business Standard. Economic Times. Business Line. WEB SITES www.saharamutual.com
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www.amfi.com www.sebi.gov.in www.mutualfundsindia.com www.nseindia.com
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Sahara Mutual Funds

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Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Mutual Funds - The Concept

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Advantages of Mutual Funds Professional Management

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

The following was the status at end of April 30, 2011:

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Open-ended schemes Close-ended schemes TOTAL (Source AMFI website)

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Predominantly Foreign Joint Ventures:

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Mutual Fund Structure

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Tax Saving Schemes

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Income /Debt Schemes

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

2. Sahara Tax Gain Fund

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

4. Sahara Gilt Fund

Risk And Return Analysis of SAHARA MUTUAL FUNDS

DESIGN OF THE STUDY

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

N=15; =; 1.3184 Y = 1.839; Y = 0.219073; XY = 0.163237; = 0.007384;

d = -0.12144; d = -0.12144; d = 0.153184; = 0.1007308

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

d = -0.071; d = 0.214252; = 0.1194196;

Risk And Return Analysis of SAHARA MUTUAL FUNDS

Risk And Return Analysis of SAHARA MUTUAL FUNDS

N=15; X=1.301; Y = 2.545; Y=2.092871; XY=0.423171; =0.121870088;

d = 0.0000047; d = 0.0196902; = 0.036230977;

Risk And Return Analysis of SAHARA MUTUAL FUNDS

5904.600 ----5981.601 6058.602 6135.595 6212.588 6289.594

77.00000 ----77.00087 77.00087 76.9929 76.9929 77.00681

0.505% 0.672% 2.656% -0.006% 1.850%

6366.621 0.452% 6443.665 6520.717 6597.783 6674.853 6751.961 6829.059 6906.18

77.02671 ----77.0441 77.05189 77.06559 77.06999 77.10842 77.09761 77.12155

0.073% 2.859% 2.145% -1.484% 2.156% -1.878% 1.759%

Risk And Return Analysis of SAHARA MUTUAL FUNDS

d = -0.0108; d = 39.19081; = 1.61639;