mf industries

RESEARCH PROJECT on mutual fund

industry

Fund Managers

Aparna Kumar 08 Madhurima Gupta 30Yash Jejani 34Namrata Joshi 36Bhagyashree Kedia 39 Richa Khaneja 42 Heera Lenka 47

OBJECTIVE• To get insight knowledge about Mutual Funds• To know the mutual fund performance in the

present markets• To analyze the comparative study between other

leading mutual funds in the present markets• To know the awareness of mutual funds among

different groups of investors• To evaluate consumer feedback on Mutual Funds.

Financial markets

Commodity markets

Capital markets

Security markets

Primary /New issue

market

Secondary market

Long term loans /bonds

Money markets

Forex market

Introduction

What is a mutual fund?

• A mutual fund is a professionally managed type of collective investment scheme

• That pools money from many investors

• To buy stocks, bonds, shortterm money market instruments, and other securities.

Functioning of mutual fund

CURRENT SCENARIO

• INDIA - one of the fastest growing markets.• Major factor contributing to the success is

the booming stock market with optimistic economy.

• An other factor is the favorable regime enforced by SEBI.

• It is growing despite global crisis (2008)• AUM has grown from Rs 3 lakh crore in Sept

06 to Rs 7 lakh crore in Sept 11.

Current scenario

• Above 34 players and more than 1150 schemes.

• Heavy outflows triggered by market volatility.• Partnering of AMC’s with banks to increase the

strength of distribution networks.• A sharp fall in investment in equity based

funds.• Huge outflow of funds around 40 % of retail

investors exited from equity funds.

CURRENT SCENARIO

• While Traditional products dominate in India, new products like Exchange Traded Funds (ETFs), Gold ETFs, Capital Protection and Overseas Funds have been gaining popularity.

• Systematic Investment Plan (SIP) has emerged as a suitable solution in this case, with a fixed amount invested at regular intervals, and most importantly being low risk.

• Emergence of FMPs.

Share of Mutual Funds in Households’ Gross Financial

Savings in India

Composition of Households’ Gross Financial Savings in

India in FY 2011

CUSTOMERS

Industry Investor Mix

PRODUCT FOLIOS

% Share in AUM

17.90

11.48%

8.34

6.01

5.21

3.91

3.77

Strengths

1)Liquidity2)Transparancy 3)Affordability4)Diversification5)Government support by

way of tax concessions 6)Volatility of bank

interest

WEAKNESS

1)Poor participation of retail investors

2)Distribution is confined only to metro cities

3) Cost pressures4) Lack of financial literacy

OPPORTUNITIES

1)Huge untapped market.2)High level of savings

among people.3)Using on online mode of

trading system.4)Fund houses should

emphasize on off shore segment.

threats

1)Increasing competition.2)High level of volatility in

stock market.3)Possibility of more

stringent regulations by SEBI, RBI, AMFI in future.

Big Players

Name of the CompaniesReliance Birla Sunlife

State bank of India(SBI) HSBC

Tata Edelweiss

HDFC JP Morgan

ABN Amro Kotak Mahindra bank

AIG JM financial

Bank of Baroda Goldman Sachs

Canara bank UTI(Unit Trust of India)

ICICI Standard Chartard

DBS Cholamandalam AMC

Fidelity

DSP Merrill lynch Franklin Templeton

Top Performing Schemes

Large Cap

Fidelity Equity Fund Franklin India Blue

Chip ICICI Pru Focused

Blue Chip Equity UTI opportuanities

Fund

Mid and Small Cap

Birla Sun Life MNC fund

HDFC mid cap IDFC premier

equity SBI Magnum

Emerging business

Analysis of some top performing MF’s

Investment type = General Equity Fund Category = Large Cap Fund Type = Open Ended Asset Size = 4261.77 cr Minimum investment = Rs. 5000 Exit Load = 1 % Crisil Rank = 1 Fund Manager = Anand Radhakrishnan

Franklin India Blue-chip Fund

Sector Wise AllocationSector % -- 1-Year --

High Low

Banking/

Finance17.25 19.83 17.12

Technology 13.70 13.70 8.42

Oil & Gas 11.12 13.10 9.63

Telecom 9.76 11.25 9.04

Utilities 8.50 8.55 6.56

Pharmaceutical

7.17 7.17 3.15

Asset Allocation (%) (Dec 30, 11)

Equity 93.28

Others 0.00

Debt 0.03

Mutual Funds N.A

Money Market 0.00

Cash / Call 6.69

Investment type = General Equity Fund Category = Large Cap Fund Type = Open Ended Asset Size = 3,370.77 crs. Minimum Investment = Rs.5000 Exit Load = 1% Crisil Rank = Rank 1 Fund mamager = Sandeep Kothari /

Subramanian Balakrishnan

Fidelity Equity Fund

Asset Allocation (%) (Oct 31, 11)

Equity 89.90

Others 0.71

Debt 0.00

Mutual Funds 0.86

Money Market 0.00

Cash / Call 8.53

Asset Allocation

Customer friendly Researched Fund Possibilities Should help the buyers with investment

and taxation basics of mutual funds Should have a BMO investment

professional to guide which scheme to be selected

Should be well balanced Should yeild good returns

Essentials for a good scheme

The Top 5

Inception Date – June 30th 2000

Trustee – HDFC Trustee Company Ltd.

Top Performing Schemes – AUM as on 30th April 11

+ HDFC Top 200 (2338 cr) + HDFC Equity (2759.30 cr) + HDFC MIP Long-term (887.90 cr)

1. HDFC Mutual Fund

Inception Date – June 30th 1995

Trustee – Tata Trustee Company Pvt. Ltd.

Top Performing Schemes – AUM as on 30th April 11

+ Tata Pure Equity (269.95 cr) + Tata Index Nifty (6.77 cr) + Tata Short-term Bond (292.08 cr)

2.Tata Mutual Fund

Inception Date – June 29th 1987

Trustee – SBI Mutual Fund Trustee Company Pvt. Ltd.

Top Performing Schemes – AUM as on 30th April 11

+ Magnum Contra (1,958.50 cr) + Magnum Balanced (333.11 cr) + Magnum Multiplier Plus (687.15 cr)

3. SBI Mutual Fund

Inception Date - June 30th 1995

Trustee – Reliance Capital Trustee Company Ltd.

Top Performing Schemes – AUM as on 30th April 11

+ Reliance MIP (168.52 cr) + Reliance Banking Retail (681.25 cr) + Reliance Diversified Power Sector Fund (3809.57 cr)

4. Reliance Mutual Fund

Inception Date – December 16th 1996

Trustee – DSP Merrill Lynch Trustee Company Pvt. Ltd.

Top Performing Schemes – AUM as on 30th April 11

+ DSPBR top 100 Equity (1167.08 cr) + DSPBR Equity (919.77 cr) + DSPBR GSF Longer Duration (425.67 cr)

5. DSP BlackRock Mutual Fund

PRIMARY DATA

Research design:The Research Design used here is Descriptive

Research DesignPrimary data collected through Personal

Interviews and QuestionnaireSecondary data collected through Internet

and Web Search

QUESTIONNAIRE1)Of the following what at present are your investment needs:• To build a corpus for retirement• To save for children education/marriage• To provide for medical emergencies• To provide for family financial security• To create wealth• All of the above

2)Which of the following you think as investment for tax-saving?• Mutual funds• Fixed Deposit• Insurance• PPF• All of the above

3) If you had Rs.1000, where you prefer to invest?• Mutual Fund• Fixed Deposit• Direct Equity• Life Insurance• Postal Office Deposit4) Do you think Mutual Funds are a risky Investment Option?• Yes• No5) On whose advise do you select a Mutual Fund Scheme?• Personal Decision• Financial Planner’s advise• Broker’s Advice • Friends & Family• Media

OCCUPATION

0

5

10

15

20

25

30

EMPLOYEE STUDENTS BUSINESS OTHERS

OCCUPATION

INVESTMENT NEEDS

Investment Needs

To build a Corpus for Retirement

To save for Children Education/Marriage

To provide for medical emergencies

To create wealth

All of above

TAX SAVINGS SCHEME

0

5

10

15

20

25

30

35

MUTUAL FUNDS

FIXED DEPOSITS

INSURANCE PPF

TAX SAVINGS SCHEME

RISKY v/s NON-RISKY

RESPONSE

RISKY

NON-RISKY27

23

MUTUAL FUND SELECTION

Fianancial PlanerBroker's adviseFriends & Fam-ilyMediaPersonal De-cision

11

9 4

5 21

SCOPE OF MUTUAL FUNDS

• Rising Disposable Income and Savings.• Investment in Banks are no longer attractive.• Increase in number of educated white collar

employees.• Foreign based asset management companies

are entering India.• SEBI has allowed introduction of Commodity

Mutual Funds.

Contd…• Mutual Funds industry is penetrating into rural & semi

urban areas.• Growth Rate of MF was 100% in the last 6 yrs & is

expected to grow even more.• It has been predicted that by March-end of 2012, the

MF Industry of India will reach Rs 99,90,000 crore, taking into account the total assets of the Indian commercial banks .

• Product innovation• Distribution channel innovation• Quality Financial Planning

• KPMG in India is of the view that the Indian mutual fund industry may grow at the rate of 22 to 25 percent in the period from 2010 to 2015.

• AUMs will grow at 15% to 25% between 2010-2015.

CONCLUSION