Download - Final Report of MF
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CHAPTER- 1
COMPANY PROFILE
AND
FUNCTIONAL ANALYSIS
OF THE COMPANY
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THE KOTAK GROUP
Kotak Mahindra Bank
Established in 1985, the Kotak Mahindra group has been one of India's most reputedfinancial company. In February 2003, Kotak Mahindra Finance Ltd, the group's flagshipcompany has got the license by the Reserve Bank of India (RBI) to carry bankingbusiness and Kotak Mahindra Finance Ltd. is the first non-banking finance company inIndia to convert itself in to a bank as Kotak Mahindra Bank Ltd. And today, it is one ofthe fastest growing bank and among the most admired financial institutions inIndia.Kotak Mahindra Bank has over 245 branches and a customer base of over 8 lakhs.Spread all over India, not just in the metros but in Tier II cities and rural India as well.
Kotak Mahindra Old Mutual Life Insurance Ltd
Kotak Mahindra Old Mutual Life Insurance Ltd is a joint venture between KotakMahindra Bank Ltd. and Old Mutual. The company offers its customers a wide range ofinnovative life insurance products, helping them in taking important financial decisions atevery stage in life and stays financially independent. The company is one of the fastestgrowing insurance companies in India and has shown remarkable growth since itsinception in 2001. Kotak Life Insurance employs around 5,565 people in its variousbusinesses and has 197 branches across 141 cities.
Kotak Securities Ltd
Kotak Securities Ltd. is one of Indias largest brokerage and securities distribution housein India. Over the years Kotak Securities has been one of the leading investment broking
houses catering to the needs of both institutional and non-institutional investor categories
with presence all over the country through franchisees and co-coordinators. Kotak
Securities Ltd. offers online and offline services based on well-researched expertise and
financial finance to dealers products to the non-institutional investors.
Kotak Mahindra Capital Company
Kotak Investment Banking (KMCC) is a full-service investment bank in India offering awide suite of capital market and advisory solutions to leading domestic and multinationalcorporations, banks, financial institutions and government companies. The kotakservices encompass Equity & Debt Capital Markets, M&A Advisory, Private EquityAdvisory, Restructuring and Recapitalization services, Structured Finance services andInfrastructure Advisory & Fund Mobilization.
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Kotak Mahindra Prime Ltd
Kotak Mahindra Prime limited (KMPL) is a subsidiary of Kotak Mahindra Bank Limitedprimarily formed to finance all passenger vehicles. KMPL is Indias Leading car finance
company. The company is dedicated to financing and supporting automotivemanufacturers, dealers and retail customers. The company offers financing in the form ofloans for the entire range of passenger cars, multi utility vehicles and pre-owned cars.The company also offers Inventory funding and infrastructure funding to car dealers.KMPL has a robust delivery platform, which is critical for sustained growth. KMPL hada retail distribution network comprising 56 branches (including representative offices) in15 states in the country and a wide network of Direct Marketing Associates, brokers andagencies supporting its distribution network.
Kotak Mahindra Asset Management Company Ltd
Kotak Mahindra Asset Management Company Ltd. a wholly owned subsidiary of KotakMahindra Bank Ltd. Kotak Mahindra Mutual Fund launched its Schemes in December1998 and today manages over Rs.13,635.83 Crore of assets from close to 4,34,622investors in various schemes.Kotak Mahindra Asset Management Company offers a complete bouquet of assetmanagement products and services that are designed to suit the diverse risk returnprofiles of each and every type of investor. KMAMC and Kotak Mahindra Bank are thesponsors of Kotak Mahindra Pension Fund Ltd, which has been appointed as one of sixfund managers to manage pension funds under the New Pension Scheme (NPS)..
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KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LTD
Corporate Office
Kotak Mahindra Old Mutual Life Insurance Ltd.Unit nos. 901 & 902, 9th floor,Wing A & B, Godrej Coliseum,Lokmanya Pan Bazar,Behind Evrard Nagar,Sion (E), Mumbai - 400 022Tel : +91 22 6621 5999Fax : +91 22 6621 5757, 6621 5858
Email : [email protected]: www.kotaklifeinsurance.com
Back Office
Kotak Mahindra Old Mutual Life Insurance Ltd.Kotak Infiniti, Building no. 21, Infinity Park,Off Western Express Highway,General A K Vaidya Marg,Malad (E), Mumbai 400 097
Toll Free No: 1800 209 8800Email : [email protected]: www.kotaklifeinsurance.com
Branch Office
KOTAK LIFE INSURANCEC-31, 1st and 2nd floor,Community center, Janakpuri (near janak cinema),
New Delhi -110058Contact person: Gurmeet SinghTel No: 9999477780, 011-66084945Website: www.kotaklifeinsurance.com
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Headquarters: Mumbai, India
Industry: Insurance
Specialties: Life Insurance
Type: Privately Held
Status: Operating Subsidiary
Founded: 2001 (Entered in Insurance Sector)
Kotak Mahindra Old Mutual Life Insurance is a 74:26 ratio joint venture between Kotak
Mahindra Bank Ltd. and Old Mutual plc. Kotak Mahindra Old Mutual Life Insurance is
one of the fastest growing insurance companies in India and has shown remarkablegrowth since its inception in 2001.
Kotak Mahindra Old Mutual Life Insurance is the coming together of Kotak Mahindra
Finance Ltd., and Old Mutual plc to enter the Indian insurance arena to offer a wide range
of innovative life insurance products. Established in 1985, as Kotak Capital Management
Finance promoted by Uday Kotak, the company has come a long way since its entry into
corporate finance. It has dabbled in leasing, auto finance, hire purchase, investment
banking, consumer finance, broking etc. The company got its name Kotak Mahindra as
industrialists Harish Mahindra and Anand Mahindra picked a stake in the company.
Kotak Mahindra is today one of Indias leading Financial Institutions.
Old Mutual plc is an international financial services group based in London with
expanding operations in life assurance, asset management, banking and general
insurance. Old Mutual is listed on the London Stock Exchange (where it is included on
the FTSE 100 Index) and also on the South African, Namibian, Malawi and Zimbabwe
stock exchanges, with assets under management worth $ 400 Billion as on 30th June,
2006. For customers, this joint venture translates into a company that combines
international expertise with the understanding of the local market.
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INTRODUCTION OF INSURANCE SECTOR IN INDIA
The Insurance sector in India governed by Insurance Act, 1938, the Life InsuranceCorporation Act, 1956 and General Insurance Business (Nationalisation) Act, 1972,Insurance Regulatory and Development Authority (IRDA) Act, 1999 and other related
Acts. With such a large population and the untapped market area of this populationInsurance happens to be a very big opportunity in India. Today it stands as a businessgrowing at the rate of 15-20 per cent annually. Together with banking services, it addsabout 7 per cent to the countrys GDP .In spite of all this growth the statistics of the penetration of the insurance in the country is very poor. Nearly 80% of Indian populations are without Life insurance cover and the Health insurance. This is anindicator that growth potential for the insurance sector is immense in India. It was due tothis immense growth that the regulations were introduced in the insurance sector and incontinuation Malhotra Committee was constituted by the government in 1993 toexamine the various aspects of the industry. The key element of the reform process wasParticipation of overseas insurance companies with 26% capital. Creating a more
efficient and competitive financial system suitable for the requirements of the economywas the main idea behind this reform.Since then the insurance industry has gone through many sea changes .The competition
LIC started facing from these companies were threatening to the existence of LIC .sincethe liberalization of the industry the insurance industry has never looked back and todaystand as the one of the most competitive and exploring industry in India. The entry of theprivate players and the increased use of the new distribution are in the limelight today.The use of new distribution techniques and the IT tools has increased the scope of theindustry in the longer run.
Important milestones in the Indian life insurance business
y 1912: The Indian Life Assurance Companies Act came into force for regulatingthe life insurance business.
y 1928: The Indian Insurance Companies Act was enacted for enabling thegovernment to collect statistical information on both life and non-life insurancebusinesses.
y 1938: The earlier legislation consolidated the Insurance Act with the aim ofsafeguarding the interests of the insuring public.
y 1956: 245 Indian and foreign insurers and provident societies were taken over bythe central government and they got nationalized. LIC was formed by an Act ofParliament, viz. LIC Act, 1956. It started off with a capital of Rs. 5 crore and thattoo from the Government of India.
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Important milestones in the Indian general insurance business
y 1907: The Indian Mercantile Insurance Ltd. was set up which was the firstcompany of its type to transact all general insurance business.
y 1957: General Insurance Council, an arm of the Insurance Association of India,
framed a code of conduct for guaranteeing fair conduct and sound businesspatterns.y 1968: The Insurance Act improved for regulating investments and set minimal
solvency levels and the Tariff Advisory Committee was set up.y 1972: The General Insurance Business (Nationalization) Act, 1972 nationalized
the general insurance business in India. It was with effect from 1st January 1973.
107 insurers integrated and grouped into four companies viz. the National InsuranceCompany Ltd., the New India Assurance Company Ltd., the Oriental Insurance CompanyLtd. and the United India Insurance Company Ltd. GIC was incorporated as a company.
LIST OF INSURANCE COMPANIES IN INDIA
Life Insurer in Public Sector
1. Life Insurance Corporation of India
Life Insurers in Private Sector
2. MetLife India Life Insurance
3. ICICI Prudential
4. Bajaj Allianz Life Insurance
5. Max New York Life Insurance
6. Sahara Life Insurance
7. TATA AIG Life Insurance
8. HDFC Standard Life
9. Birla Sunlife
10.SBI Life Insurance
11.Kotak Life Insurance
12.Aviva Life Insurance
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13.Reliance Life Insurance Company Limited - Formerly known as AMP Sanmar
LIC
14.ING Vysya Life Insurance
15.Shriram Life Insurance
16.Bharti AXA Life Insurance Co Ltd
17.Future Generali Life Insurance Co Ltd
18.IDBI Fortis Life Insurance
19.AEGON Religare Life Insurance
20.DLF Pramerica Life Insurance
21.CANARA HSBC Oriental Bank of Commerce Life Insurance
22.Star Union Dai-ichi Life Insurance Co. Ltd.
23.INDIA First Life Insurance
Mission And Vision of the Company
Mission
We focus on the needs of our customers and create confidence, trust and loyalty byoffering a wide range of innovative insurance solutions.
Strengthened by our commitment to professional management, we ensure the continuedgrowth and advancement of our employees.
Vision
Kotak Life Insurance has a deep rooted commitment to improve the quality of life of its
customers, employees and stakeholders. We aim at improving the long term value in ourrelationship by continuous innovation and improvements.We do this by our three-prongeffort which strives to make Kotak Life Insurance a corporate with values.
y IncreaseCustomerValueKotak Life Insurance has gone to the heart of its customer's requirements anddeveloped products which are unique and serve the customer needs perfectly. We
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built a relationship of mutual trust and benefit to serve the Indian customer. AtKotak Life Insurance the customer always comes first.
y Cohesive Work Environment
We form long-term partnership with our employees by offering them an invigoratingwork experience. We not only demand loyalty, sincerity and values but also give itback in equal measures. Kotak Life Insurance will like to offer its employees spaceto grow, innovate and build a long-term career.
y Work with Honour
Kotak Life Insurance delivers everyday services in the marketplace with the highsense of duty and commitment. Our employees strive to build the long-term value
for all those come in contact with Kotak Life Insurance. Our consumers,distributors, employees, shareholders and the nation have our commitment that wewill uphold the values of trust, integrity and a Sense of Honour in every thought, actand deed in order to positively contribute to individual, society and nation growth.
PRODUCTS RANGE
Kotak Life Insurance offers a range of innovative, customer-centric products that meetthe needs of customers at every life stage. Its products can be enhanced with up to 4riders, to create a customized solution for each policyholder.
Protection Plans:- Helping you to grow and protect your wealth.
Savings & Investments Plans:- Manage today for a better tomorrow.
Retirement Plans:- The road to retirement, Make it easy.
Child Plans:- Plan a good future for your child.
PROTECTION PLANS
Kotak Loan Protection Plan -Kotak Loan Protection Plan is a protection plan
that helps share the burden of your loan.
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Kotak Eternal Life Plans -Kotak Eternal Life Plans are participating whole life
plans that provide enhanced protection till the golden age of 99.
Kotak Term/Preferred Term Plan - The Kotak Term/Preferred Term Plan is a
pure risk cover plan that provides you with a high level of protection at nominal
costs.
SAVING AND INVESTMENT PLANS
Kotak Super Advantage -Kotak Super Advantage is a smart investment plan that
addresses your current financial needs while building long term savings for your
future.
Kotak Platinum Edge -You've lived life on your own terms; always done what
you've believed in. You are used to having the luxury of choice and the power to
control.
Kotak Endowment Plan -Kotak Endowment Plan is a participating endowment
plan that provides you an avenue for long term regular investments to accumulate
a lump sum on maturity.
Kotak Surakshit Jeevan -Kotak Surakshit Jeevan, an enhanced protection andlong-term savings plan, makes sure your family remains financially independent
even if you are not around.
Kotak Safe Investment Plan II -Equity investments although attractive are
given to volatility and can often result in loss of capital. Therefore, as a prudent
investor you would be inclined to avoid such investments or limit your exposure
to them.
Kotak Single Invest -Life has the ability to surprise you pleasantly with financial
windfall and surplus. As an individual, who is aware of his responsibilities and
aspirations, it is now up to you to make the best use of it.
Kotak Money Back Plan -This plan offers the key benefit of cash lump sums at
periodic intervals of five years ensuring that you are able to meet any of your
financial obligations.
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Kotak Premium Return Plan -The premium Return Plan will get you the dual
benefit of a risk cover and savings, with minimal paperwork and procedures.
RETIREMENT PLANS
Kotak Long Life Wealth Plus -Life has several shades. Some known, some
unknown; some planned, some unplanned. Life may not always be the way you
want it to be.
Kotak Second Innings Plan -With a comfortable lifestyle and a happy family,
today you are enjoying life to the full.
Kotak Capital Multiplier Plan -The Kotak Capital Multiplier Plan is the only
plan of its kind that allows you to enjoy returns even beyond maturity.
Kotak Long Life Secure Plus - Protecting your family and ensuring their
comfort has always been your primary concern and key responsibility.
Kotak Guaranteed Pension Builder -Kotak Guaranteed Pension Builder works
for your security and financial independence by allowing you to save
systematically for your golden years.
Kotak Retirement Income Plan -The Kotak Retirement Income Plan is a
savings plan designed to meet your post-retirement needs. It is a plan that gives
you "Jeene ki azaadi".
CHILD PLANS
Kotak Headstart Child Plans -The head start child plans are specially tailored,
cost effective plans that aim to give your children the financial means to pursue
his or her dreams.
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Kotak Child Advantage Plan -The Kotak Child Advantage Plan is an
investment plan designed to meet your child's future financial needs.
SIZE OF ORGANIZATION
Kotak Life Insurance employs around 5,565 people in its various businesses and has 197
branches across 141 cities. Kotak Mahindra Old Mutual Life Insurance Ltd. reported
earnings results for the fourth quarter and full year ended March 31, 2010. For the
quarter, the company reported profit after tax of INR 440 million compared to INR 400
million for the same period last year. For the full year, the company reported profit after
tax of INR 690 million compared to INR 140 million for the same period last year. Kotak
Life Insurance is one of the best private insurance players in the market, in the latest
IRDA annual report of 2009-2010, Kotak is one of the four insurance companies which
have booked profit for the financial year.
MANAGEMENT OVERVIEW
In Kotak Life Insurance work as a team and have a flat management structure and the
top management has many years of experience which has helped guide the company into
a position of leadership.
yMr. Uday Kotak CEO of the company
yMr. Gaurang Shah Director
yMr. Pankaj Desai - Managing Director
yMr. G Muralidhar - Chief Operating Officer
yMr. Subhasish Ghosh - Sr. VP, Financial Institutions Group
yMr. Sugata Dutta - Head Human Resources
yMs. Elizabeth Venkataraman - Senior Vice President Marketing
yMr. Andrew Cartwright - Appointed Actuary
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yMr. Suresh Agarwal - Head of Alternate channel
yMr. Shekhar Bhandari - Head of Tied channel
yMr. Anand Dewan - Head Business Impact Group (BIG)
yMr. Sandip Shrikhande - Head of Group Business
yMr. Dhiresh Rustogi - Chief Technology Officer
yMr. Sudhakar Shanbag - Chief Investment Officer
Hierarchy in Kotak Life Insurance Branch
Country head
Regional Manager
Senior Branch Manager
Branch Manager
Assistant Branch Manager Branch Operation Incharge
(ABM) (BOE)
Sales Manager Operation Executive
Assistant Sales Manager Operation
Life Advisors
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MARKET SHARE & POSITION OF THE COMPANY IN THE INDUSTRY
The introduction of private players in the industry has added value to the industry. The
initiatives taken by the private players are very competitive and have given immense
competition to the on time monopoly of the market LIC. Since the advent of the private
players in the market the industry has seen new and innovative steps taken by the players
in this sector. The new players have improved the service quality of the insurance. As a
result LIC down the years have seen the declining phase in its career. The market share
was distributed among the private players. Though LIC still holds the 75% of the
insurance sector but the upcoming natures of these private players are enough to give
more competition to LIC in the near future. LIC market share has decreased from 95%
(2002-03) to 81 %( 2004-05).The following companies has the rest of the market share of
the insurance industry. Table 3 shows the mane of the player in the market.
Kotak Life Insurance is one of the best private insurance players in the market, in the
latest IRDA annual report of 2009-2010, Kotak is one of the four insurance companies
which have booked profit for the financial year.
JOURNEY SO FAR
The Kotak Mahindra Group was born in 1985 as Kotak Capital Management Finance
Limited. This company was promoted by Uday Kotak, Sidney A.A. Pinto, and Kotak and
Company. Industrialist Harish Mahindra and Anand Mahindra took a stake in 1986, and
that's when the company changed its name to Kotak Mahindra Finance Limited. Since
then its been steady and confident journey to growth and success.
1986 Kotak Mahindra Finance Limited starts the activity of Bill Discounting
1987 Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market
1990 The Auto Finance division is started
1991 The Investment Banking Division is started. Takes over FICOM, one of India's
largest financial retail marketing networks
1992 Enters the Funds Syndication sector
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1995 Brokerage and Distribution businesses incorporated into a separate company -
Kotak Securities. Investment Banking division incorporated into a separate
company - Kotak Mahindra Capital Company
1996 The Auto Finance Business is hived off into a separate company - Kotak
Mahindra Prime Limited (formerly known as Kotak Mahindra Primus Limited).
Kotak Mahindra takes a significant stake in Ford Credit Kotak Mahindra Limited,
for financing Ford vehicles. The launch of Matrix Information Services Limited
marks the Group's entry into information distribution.
1998 Enters the mutual fund market with the launch of Kotak Mahindra Asset
Management Company.
2000 Kotak Mahindra ties up with Old Mutual plc for the Life Insurance business.
Kotak Securities launches its on-line broking site (now
www.kotaksecurities.com). Commencement of private equity activity through
setting up of Kotak Mahindra Venture Capital Fund.
2001 Matrix sold to Friday Corporation. Launches Insurance Services
2003 Kotak Mahindra Finance Ltd. converts to a commercial bank - the first Indian
company to do so.
2004 Launches India Growth Fund, a private equity fund.
2005 Kotak Group realigns joint venture in Ford Credit; Buys Kotak Mahindra Prime
(formerly known as Kotak Mahindra Primus Limited) and sells Ford credit Kotak
Mahindra. Launches a real estate fund
2006 Bought the 25% stake held by Goldman Sachs in Kotak Mahindra Capital
Company and Kotak Securities
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RESEARCH METHADOLOGY
PROBLEM STATEMENT
The investment strategy and management style are qualitative but the fund return is thequantitative indicators to judge the performance of mutual funds. Return alone should notbe considered as the basis of measurement of the performance of a mutual fund scheme,it should also include the risk taken by the fund manager because different funds willhave different levels of risk attached to them.
OBJECTIVES OF THE STUDY
To project Mutual Fund as the productive avenue for investing activities To show the wide range of investment options available in Mutual Funds by
explaining its various schemes.
To help an investor make a right choice of investment while considering theinherent risk factors to understand the recent trends in Mutual Fund..
Comparative study between the other leading Mutual funds in the present market
To get the insight knowledge about the Mutual Funds
SCOPE OF THE STUDY
The study here has to analysis open-ended equity Growth Schemes offered by the Kotak MutualFund and other major Assets Management Companies. Each scheme is analyzed according to its
performance against the other, based on factors like Sharpes Ratio, F(Beta) Co-efficient, andReturns..
SOURCES OF DATA COLLECTION
The Methodology involves randomly selecting Open-Ended equity schemes of differentfund houses of the country. The data collected for this project is basically from
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1. Secondary sources: The monthly fact sheets and annexure collected from
different mutual fund companies, newspaper, Internet and web search.
DURATION OF STUDY
The duration of study for a period of two months from 1st June 2010 to 31st July 2010.
HYPOTHESIS
1)
The portfolios are well diversified and fund managers are able to generate returnsmore than that of the market because of their knowledge and stock selectionskills.
2) Consider all the qualities of AMC important in the selection of the scheme.3) The investors services are important in the selection of the funds/ schemes.4) Limited Mutual funds are selected for the study.
ANALYTICAL TOOL
The following tools are used for this study to draw meaningful analysis andinterpretation of various data collected.
Ratio analysis includes Sharpe Ratio, Portfolio Turnover ratio Standard Deviation
Beta(F) co-efficient analysis and R-squared.
The Sharpes Measure:-
In this model, performance of a fund is evaluated on the basis of Sharpe Ratio, which isa ratio of returns generated by the fund over and above risk free rate of return and thetotal risk associated with it.According to Sharpe, it is the total risk of the fund that the investors are concerned
about. So, the model evaluates funds on the basis of reward per unit of total risk.Symbolically, it can be written as:
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Sharpe Index (Si) = (Ri - Rf)/Si
Where,
Si = Standard Deviation of the fund.
While a high and positive Sharpe Ratio shows a superior risk-adjusted performance of afund, a low and negative Sharpe Ratio is an indication of unfavorable performance.
F(Beta) Co-efficient:-
Systematic risk is measured in terms of Beta, which represents fluctuations in the NAVof the fund vis--vis market. The more responsive the NAV of a Mutual Fund is to thechanges in the market; higher will be its beta. Beta is calculated by relating the returnson a Mutual Fund with the returns in the market. While unsystematic risk can be
diversified through investments in a number of instruments, systematic risk cannot. Byusing the risk return relationship, we try to assess the competitive strength of theMutual Funds vis--vis one another in a better way.
F(Beta) is calculated as N (7XY) 7X7Y
N (7X2) (7X)
2
Standard Deviation
in the fund analysis activity lie the twin pursuits of judging returns and risk. It involves
determing a funds average performance over a period of time. Standard Deviation
gives quality rating of an average. The standard Deviation of an average is the amount
by the numbers that go into an average deviate from that average. If the performance
are very different from the average, then that fund is risky and delivering high return in
some months and poor returns in others.
R-Squared
R-squared values ranges from 0 to 1. An R-squared of 1 means that all movement of
security are completely explained by movements in the index. A high R-squared
(between 0.85 and 1) indicates the funds performance patterns have been in line with
the index. A fund with a low R-squared (0.70 or less ) doesnt act much like the index.
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Portfolio Returns: -
Returns of the different schemes are taken for the comparison and analysis part.
REVIEW OF LITERATURE
Reference to previous research work done on the related topic, findings and suggestions.S.Narayan Rao evaluated performance of Indian mutual funds in a bear market throughrelative performance index, risk-return analysis, Treynors ratio, Sharpes ratio, Sharpesmeasure. The study used 269 open-ended schemes (out of total schemes of 433) forcomputing relative performance index. Then after excluding funds whose returns are lessthan risk-free returns, 58 schemes are finally used for further analysis. The results of performance measures suggest that most of mutual fund schemes in the sample of 58were able to satisfy investors expectations by giving excess returns over expected
returns. Reference to previous research work done on the related topic, findings andsuggestions.
Mishra, (2002) measured mutual fund performance using lower partial moment. In thispaper, measures of evaluating portfolio performance based on lower partial moment aredeveloped. Risk from the lower partial moment is measured by taking into account onlythose states in which return is below a pre-specified target rate like risk-free rate.
CURRENT SCENARIO
The Indian mutual fund industry can now boast on that. With the total Asset UnderManagement (AUM) increasing from Rs.1,01,565 Crores in Jan 2000 to Rs.5,67,601.98Crores by April 2008, according to the Association of Mutual Funds in India (AMFI).
Last six years have been the most turbulent as well as exiting ones for the industry. Newplayers have come in, while others have decided to close shop by either selling off ormerging with others. Product innovation is now pass with the game shifting toperformance delivery in fund management as well as service. Those directly associatedwith the fund management industry like distributors, registrars and transfer agents, andeven the regulators have become more mature and responsible.
The industry is also having a profound impact on financial markets. While UTI hasalways been a dominant player on the bourses as well as the debt markets, the newgeneration of private funds which have gained substantial mass are now seen flexing theirmuscles. Fund managers, by their selection criteria for stocks have forced corporate
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governance on the industry. By rewarding honest and transparent management withhigher valuations, a system of risk-reward has been created where the corporate sector ismore transparent then before.
Funds have shifted their focus to the recession free sectors like pharmaceuticals, FMCG
and technology sector. Funds performances are improving. Funds collection, whichaveraged at less than Rs.100bn per annum over five-year period spanning 1993-98doubled to Rs.210bn in 1998-99. Total collection for the financial year ending March2000 is expected to reach Rs.450bn.
What is particularly noteworthy is that bulk of the mobilization has been by the privatesector mutual funds rather than public sector mutual funds. Indeed private MFs saw a netinflow of Rs.7819.34 crore during the first nine months of the year as against a net inflowof Rs.604.40 crore in the case of public sector funds.
Mutual funds are now also competing with commercial banks
in the race for retail investors savings and corporate float money. The power shifttowards mutual funds has become obvious. The coming few years will show that thetraditional saving avenues are losing out in the current scenario. Many investors arerealizing that investments in savings accounts are as good as locking up their deposits ina closet. The fund mobilization trend by mutual funds in the current year indicates thatmoney is going to mutual funds in a big way.
India is at the first stage of a revolution that has already peaked in the U.S. The U.S.boasts of an Asset base that is much higher than its bank deposits. In India, mutual fundassets are not even 10% of the bank deposits, but this trend is beginning to change.Recent figures indicate that in the first quarter of the fiscal year mutual fund assets went
up by 115% whereas bank deposits rose by only 17%. (Source: Thinktank, The FinancialExpress September) This is forcing a large number of banks to adopt the concept ofnarrow banking wherein the deposits are kept in Gilts and some other assets whichimproves liquidity and reduces risk. The basic fact lies that banks cannot be ignored andthey will not close down completely. Their role as intermediaries cannot be ignored. It isjust that Mutual Funds are going to change the way banks do business in the future.
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MAJOR MUTUAL FUND COMPANIES IN INDIA
Reliance Mutual Fund - Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai
Ambani Group, is one of the fastest growing mutual funds in the country. RMF offers
investors a well-rounded portfolio of products to meet varying investor requirements and
has presence in 159 cities across the country.
The main objectives are:
y To carry on the activity of a Mutual Fund as may be permitted at law andformulate and devise various collective Schemes of savings and investments forpeople in India and abroad and also ensure liquidity of investments for the Unitholders;
y To deploy Funds thus raised so as to help the Unit holders earn reasonable returnson their savings and
y To take such steps as may be necessary from time to time to realise the effectswithout any limitation.
Trustee Reliance Capital Trustee Company Ltd.
Average Asset under Management -Rs.1, 01,320 Crores as on 30 June 2010No. of investors- Over 74 Lakh
Reliance Equity Opportunity Fund
Investment Objective
The primary investment objective of the scheme is to seek to generate capitalappreciation & provide long-term growth opportunities by investing in a portfolioconstituted of equity securities & equity related securities and the secondary objective isto generate consistent returns by investing in debt and money market securities.
Latest NAV 34.422 (23/07/10)
52-Week High 34.7234 (23/07/10)
52-Week Low 21.2758 (10/08/09)
Fund Category Equity: Diversified
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Type Open -End
Inception Date March 31, 2005
Risk Grade Average
Return Grade Above Average
Net Assets (Cr) 2,112.97 (30/06/10)
Benchmark Index BSE 100
Minimum Investment Rs.- 5000 and additional purchaseamount-1000
Asset allocation
InstrumentIndicative assetallocation (%)
Risk Profile
Maximum MinimumEquity and Equity related Instruments
100% 75%Medium toHigh
Debt Instruments & Money Marketsecurities (including investments insecuritised debt)
25% 0%Medium toLow
Comparative Performance
Performance as on 30/6/2010
Absolute(%)
Compounded Annualized Return (%)
6months 1year 3year 5year SinceInception
Reliance Equity Opportunities FundGrowth
12.48 63.40 12.03 25.23 25.63
BSE 100 Index (Benchmark) 2.87 24.71 7.46 19.95 20.92
NAV as on June 30, 2010 Rs. 32.9375 per unit
Returns 1 year : CAGR
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0
10
20
30
40
50
60
70
6month
s
1Ye
ar
3Ye
ars
5ye
ars
SinceIn
ception
Reliance Equity
Opportunities Fund -
Retail Plan - Growth
BSE100
Volatility Measures
Portfolio Turnover Ratio 93%Standard Deviation - 4.43%Beta - 0.8609R Squared - 0.8753Sharpe Ratio - 0.0554
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DSP Black Rock Mutual Fund- The philosophy of DSP BlackRock Investment
Managers Pvt. Ltd. has been grounded in the belief that experienced investment
professionals, using a disciplined process and sophisticated analytical tools, can
consistently add value to client portfolios. With the three-dimensional approach
(Functional Dimension, Product Dimension, and Region Dimension) to managing the
organization, seek to:
y Ensure consistency on a global basis;y Allow for the tailoring of products and services according to client or local needs;y Promote teamwork among our employees worldwide; andy Facilitate operational integrity and efficiency
Trustee DSP Merrill Lynch Trustee Company Pvt. Ltd.
Average Asset under Management excess US$ 1.3 trillion
DSP ML Opportunities Fund
Investment Objective
An Open Ended growth Scheme, seeking to generate long term capital appreciation andwhose secondary objective is income generation and the distribution of dividend from a
portfolio constituted of equity and equity related securities concentrating on theinvestment focus of the Scheme
Latest NAV 83.931 (23/07/10)
52-Week High 84.456 (23/07/10)
52-Week Low 62.085 (10/08/09)
Fund Category Equity: Diversified
Type Open -End
Inception Date May 16, 2000
Risk Grade Below Average
Return Grade Average
Net Assets (Cr) 886.42 (30/06/10)
Benchmark Index S&P CNX Nifty
Minimum Investment Rs.- 5000 and additional purchaseamount-1000
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Comparative Performance
Performance as on 30/6/2010
Absolute
(%)
Compounded Annualized Return (%)
6months 1year 3year 5year SinceInception
DSP Black Rock Opportunity Fund 8.68 39.82 10.22 24.16 23.05
S&P CNX Nifty (Benchmark) 2.14 23.80 7.14 19.05 14.85
NAV as on June 30, 2010 Rs. 81.770 per unitReturns 1 year : CAGR
0
510
15
20
25
30
35
40
45
6months 1year 3year 5year Since
Inception
DSP Black Rock
Opportunity Fund
S&P CNX Nifty
(Benchmark)
Volatility Measures
Portfolio Turnover Ratio: 65 %Standard Deviation: 26.29%Beta: 0.89R-Squared: 0.8483Sharpe Ratio: 0.70
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HDFC Mutual Fund -HDFC Mutual Fund is belief to give the investor the chance to
profitably invest in the financial market, without constantly worrying about the market
swings. To realize this belief, HDFC Mutual Fund has set up the infrastructure required
to conduct all the fundamental research and back it up with effective analysis. Its strong
emphasis on managing and controlling portfolio risk avoids chasing the latest fads and
trends.
Trustee HDFC Trustee Company Ltd.
Average Asset under Management-: Rs. 86648.10 Crs. as on 30 June 2010
No. of investors: - 40, 47,001
HDFC Core & Satellite Fund
Investment Objective
To generate capital appreciation through equity investment in companies whose sharesare quoting at prices below their true value.
Latest NAV 39.383 (23/07/10)
52-Week High 39.383 (23/07/10)
52-Week Low 26.219 (10/08/09)
Fund Category Equity: Diversified
Type Open -End
Inception Date September 17, 2004
Risk Grade Below Average
Return Grade Average
Net Assets (Cr) 427.11 (30/06/10)
Benchmark Index BSE 200
Minimum Investment Rs.- 5000 and additional purchaseamount-1000
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Investment Pattern
Instrument
Indicative asset
allocation(% of total assets)
Risk Profile
Minimum- MaximumEquity and Equity related Instruments 90% -95% High
Fixed Income Securities Debt (includingsecuritised debt of upto 10% of net assets &Money Market instruments)
5% -10%Low toMedium
Comparative Performance
Performance as on 30/6/2010
Absolute(%)
Compounded Annualized Return (%)
6months 1year 3year 5year SinceInception
HDFC Core & Satellite Fund 9.88 49.58 11.29 22.73 25.52BSE 200 (Benchmark Return) 3.64 27.22 7.58 19.47 21.61
NAV as on June 30, 2010 Rs. 37.251 per unit
Date of Inception September 17, 2004Returns 1 year : CAGR
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0
10
20
30
40
50
60
6 months 1 Year 3 Years 5 years Since
Inception
HDFC Core & Satellite Fund
BSE 200 (Benchmark Return)
Volatility Measures
Portfolio Turnover Ratio: 44.68%Standard Deviation: 10.40%Beta: 0.9490R-Squared: 0.92Sharpe Ratio: 0.11
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Franklin Templeton Mutual Fund- Franklin Templeton is one of the largest financial
services groups in the world, based in San Mateo, California, USA. Franklin Templeton
has over 50 years of experience in investment management. It also provides investment
management and advisory services. it is Franklin belief that investors differ in their
investment needs based on their personal financial goals. It is recommended that you
should, at the very beginning, identify your own financial goals,
Trustee Franklin Templeton Trustee Services Pvt. Ltd.
Average Asset under Management- Rs. 35774.78 crores as on 31 May 2010
No. of investors- Over 22 lakh
Franklin India Flexi Cap Fund
Investment Objective
Franklin India Flexi Cap Fund (FIFCF) seeks to provide medium to long-term capitalappreciation by investing in stocks across the entire market capitalization range.
& ProfileLatest NAV 31.0664 (23/07/10)
52-Week High 31.0664 (23/07/10)
52-Week Low 23.1452 (10/08/09)
Fund Category Equity: Diversified
Type Open -End
Inception Date March 02, 2005
Risk Grade Below Average
Return Grade Average
Net Assets (Cr) 2,174.06 (30/06/10)
Benchmark S&P CNX 500Minimum Investment Rs.- 5000
.
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Assets Allocation
Instrument
Indicative asset
allocation(% of total assets)
Risk Profile
Minimum- MaximumEquity and Equity related Instruments 90% -95% High
Fixed Income Securities Debt5% -10%
Low toMedium
Comparative Performance
Performance as on 30/6/2010
Absolute(%)
Compounded Annualized Return (%)
6months 1year 3year 5year SinceInception
I C 4.07 33.75 9.15 23.04 22.75
& CNX 00 (Benchmark) 2.12 27.41 6.82 18.31 18.05
NAV as on June 30, 2010 Rs. 30.93 per unitReturns 1 year : CAGR
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0
5
10
15
20
25
30
35
40
6 months 1 Year 3 Years 5 years Since
inception
Franklin India Flexi CapFund
S&P CNX 500 (Benchmark
Return)
Volatility Measures
Portfolio Turnover Ratio:- 254.56%Standard Deviation:-9.9 %Beta: 0.84R-Squared: 0.91Sharpe Ratio: 0.84
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SBI Mutual Fund -SBI Mutual Fund is Indias largest bank sponsored mutual fund and
has an enviable track record in judicious investments and consistent wealth creation. At
SBIMF they devote considerable resources to gain, maintain and sustain our profitable
insights into market movements and, consistently push the envelope to ensure our
investors get the maximum benefits year after year.
Trustee SBI Mutual Fund Trustee Company Pvt. Ltd.
Average Asset under Management- Over Rs.38, 782 crores Crs as on 30 June 2010
No. of investors- over 5.8 million.
SBI Magnum Contra Fund
Investment Objective
To provide the investors maximum growth opportunity through equity investments instocks of growth oriented sectors of the economy. There are five sub-funds dedicated tospecific investment themes viz. Information Technology, Pharmaceuticals, FMCG,Contrarian (investment in stocks currently out of favour) and Emerging Businesses
Latest NAV 57.86 (23/07/10)
52-Week High 57.91 (23/07/10)
52-Week Low 46.2 (17/08/09)
Fund Category Equity: Diversified
Type Open -End
Inception Date July 14, 1999
Risk Grade Average
Return Grade Average
Net Assets (Cr) 3586.05 (30/06/10)
Benchmark BSE 100
Minimum Investment Rs.- 5000 and Additional Purchase Rs.1000
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Assets Allocation
InstrumentIndicative asset allocation(% of total assets)
Minimum- Maximum
Equity and Equity related Instruments 94%Debt and Others
6%
Comparative Performance
Performance as on 30/6/2010
Absolute(%)
Compounded Annualized Return (%)
6months 1year 3year 5year SinceInception
SBI M g C t 6.1 29.14 10.74 26.41 27.48BSE100 I x (Benchmark) 4.23 24.71 7.46 19.95 15.04
NAV as on June 30, 2010 Rs. 57.03 per unitReturns 1 year : CAGR
0
5
10
15
20
25
30
35
6mont 1year 3year 5year Since
Inception
SBI Magnum Contra und
BSE100 Index
(Benchmark)
Volatility Measures
Portfolio Turnover Ratio- 92%Standard Deviation: 35.69%Beta: 0.91R-Squared: 0.98Sharpe Ratio: 0.31
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HSBC Mutual Fund HSBC Asset Management (India) Private Limited is theInvestment Manager to HSBC Mutual Fund, set up locally by the HSBC Group. HSBCMutual Fund is the brand name adopted by HSBC Asset Management (India) PrivateLimited. The business is working on ambitious plans to position itself as one of theleading Private Sector Fund Managers in the Indian financial market - one of the most
promising markets in Asia. It also aims to expand its customer base by extending itsproduct range to include a wide variety of investment products and enhance its reputationin India of being a provider of international quality investment products and services.
Trustee HSBC Asset Management (India) Private LimitedAverage Asset under Management- Rs.19792 crores as on 31 May 2010
HSBC India opportunities Fund
Investment Objective
To seek long term capital growth through investments across all market capitalisations,including small, mid and large cap stocks. It aims to be predominantly invested in equity& equity related securities.
Latest NAV 33.4417 (23/07/10)
52-Week High 33.4907 (23/07/10)
52-Week Low 27.6163 (17/08/09)
Fund Category Equity: DiversifiedType Open -End
Inception Date February 24, 2004
Risk Grade Below Average
Return Grade Below Average
Net Assets (Cr) 258.83 (30/06/10)
Benchmark BSE 500
Minimum Application Amount Rs 10,000 per application
Assets Allocation
Instrument Indicative asset allocation (%)Equity 90%
Debt 5.01%
Others 4.99%
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Comparative Performance
Performance as on 30/6/2010
Absolute
(%)
Compounded Annualized Return (%)
6months 1year 3year 5year SinceInception
HSBC India Opportunities Fund 1.98 22.35 1.79 19.38 20.62
BSE 00 Index (Benchmark) 3.65 29.14 7.04 19.34 19.78
NAV as on June 30, 2010 Rs. 32.8912 per unitReturns 1 year : CAGR
0
0
0
0
nt s
e
e
s
e
s Sin
e
ins e
tion
HSBC India
ort nit
nd
Ben
ark BSE
00 Index
Returns 1 year : CAGR
Volatility Measures
Portfolio Turnover Ratio- 154%Standard Deviation: 1.39 %Beta: 0.7794R-Squared: 0.9357Sharpe Ratio: -0.0047
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Tata Mutual Fund - The Tata Asset Management philosophy is centred on seeking
consistent, long-term results. Tata Asset Management aims at overall excellence, within
the framework of transparent and rigorous risk controls. Tata constantly benchmark its
efforts against these tenets of performance: Consistency , Flexibility, Stability and
Service.
Trustee Tata Trustee Company Pvt. Ltd.
Average Asset under Management- Rs.18, 464 crores as on 30 June 2010
Tata Equity Opportunity Fund
Investment Objective
To provide Income distribution and long term capital gain while at all times emphasizingthe importance of capital appreciation.
Latest NAV 80.8531 (23/07/10)
52-Week High 82.2445 (14/01/10)
52-Week Low 60.5061 (13/07/09)
Fund Category Equity: Diversified
Type Open -End
Inception Date February 25, 1993
Risk Grade Above Average
Return Grade Below Average
Net Assets (Cr) 442.90 (30/06/10)
Benchmark BSE 500
Minimum investment Rs. 5000
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Assets Allocation
Instrument Indicative asset allocation(% of total assets)
Minimum- MaximumEquity and Equity related Instruments 95%
Debt and Others5%
Comparative Performance
Performance as on 30/6/2010
Absolute(%)
Compounded Annualized Return (%)
6months 1year 3year 5year SinceInception
TataEquit O ortunit und 2.13 41.95 6.20 21.11 12.72BSESen ex (Benchmark) 1.35 22.13 6.50 19.72 11.21
NAV as on June 30, 2010 Rs. 79.86 per unitReturns 1 year : CAGR
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0
5
10
15
20
25
30
35
40
45
6 months 1 Year 3 Years 5 years Since
inception
ata Equity Opportunities Fund
BSE Sensex
Volatility Measures
Portfolio Turnover Ratio- 136.28Standard Deviation: 37.40Beta: 1.05R-Squared: 0.93Sharpe Ratio: -0.06
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Sundaram BNP Paribas Mutual Fund - At Sundaram BNP Paribas Mutual, identifying
an investment opportunity long before it manifests as one, is the heart of our business
belief. So, constant updating of investors' knowledge base is just part of the service
package we offer our customers. At the core of our investment philosophy lies our
commitment to providing consistent returns through sensible investment management
practices, because your money is precious. Investment philosophy of Sundaram BNP
Paribas Mutual Fund:-
A greater level of neglect in the Indian equity universe leaves fund managers with a
wider array of opportunities to exploit through an active fundamental approach.
An extensive fundamental quantitative analysis, regular company visits with top
management allow us to assess these markets, thus giving us access to attractive and
relatively unknown companies with strong financial characteristics.
Long term outperformance is achieved by investing in large and medium/small sized
companies with unique business strength in attractive sectors, sound and transparent
management, visibility and durable growth at a reasonable price. The risk
management is also crucial.
The local presence and expertise of the fund management team is key to exploiting
market mispricings due to the lower level of research resulting in an inefficiency of
information in Indian equities.
Trustee Sundaram BNP Paribas Trustee Company Limited
Average Asset under Management- Rs.13, 976 crores as on 31 May 2010
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Sundaram BNP Paribas Leadership Fund
Investment Objective
To achieve capital appreciation by investing in select stocks of companies. The leaders
are identified as top 2/3 companies in any sector/sub-sector in terms of net revenue ortotal income.
Latest NAV 40.5261 (23/07/10)
52-Week High 40.6074 (23/07/10)
52-Week Low 31.1097 (17/08/09)
Fund Category Equity: Diversified
Type Open -End
Inception Date June , 2004
Risk Grade Above AverageReturn Grade Average
Net Assets (Cr) 164.42 (30/06/10)
Benchmark S&P CNX Nifty
Minimum Application Amount Rs 5000
Assets Allocation
Instrument Indicative asset allocation (%)Equity 97%
Debt & Others 3%
Comparative Performance
Performance as on 30/6/2010
Absolute(%)
Compounded Annualized Return (%)
6months 1year 3year 5year Since
InceptionSundaram Paribas Leadership Fund 4.27 31.0 8.1 21.6 25.7
S&P CNX Nifty (Benchmark) 2.73 23.8 7.1 19.0 23.0
NAV as on June 30, 2010 Rs. 39.4407 per unitReturns 1 year : CAGR
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0
5
10
15
20
25
30
35
6 months 1 Year 3 Years 5 years Since
inspection
Sundaram BNP Paribas
Leadership Fund
S&P CNX Nifty
Volatility Measures
Portfolio Turnover Ratio- 154%Standard Deviation: 31.56%Beta: 1.03R-Squared: 0.94Sharpe Ratio: -0.65
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Kotak Mahindra Mutual Fund- Kotak Mahindra is one of India's leading financial
institutions, offering complete financial solutions that encompass every sphere of life.
From commercial banking, to stock broking, to mutual funds, to life insurance, to
investment banking, the group caters to the financial needs of individuals and corporates.
KMMF offers schemes catering to investors with varying risk - return profiles and was
the first fund house in the country to launch a dedicated gilt scheme investing only in
government securities.
Trustee Kotak Mahindra Trustee Company Ltd.
Average Asset under Management - Rs.28, 636.86 crores as on 30 June 2010
No. of investors- Around 9.77 Lakhs
Kotak Opportunities Fund
Investment objective
To generate capital appreciation from a diversified portfolio of equity & equity relatedinstruments
Latest NAV 45.281 (2307/10)52-Week High 45.532 (22/07/10)
52-Week Low 34.74 (17/08/09)
Fund Category Equity: Diversified
Type Open -End
Inception Date September 9, 2004
Risk Grade Above Average
Return Grade Average
Net Assets (Cr) 1111.21(3006/2010)
Benchmark S&P CNX 500
Minimum Application Amount Rs 5,000 per application and AdditionalRs.1000
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Assets Allocation
Instrument Indicativeasset
allocation (%)
RiskProfil
Equity and equity related securities 97% Medium to high
Debt and Money Market Instruments 3% Low
Comparative Performance
Performance as on 30/6/2010
Absolute(%)
Compounded Annualized Return (%)
6months 1year 3year 5year SinceInception
Kotak Opportunity Fund 5.60 32.63 11.40 24.84 29.33
S&P CNX 500 (Benchmark) 2.12 27.41 6.82 18.31 21.92
NAV as on June 30, 2010 Rs. 44.549 per unitReturns 1 year : CAGR
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0
5
10
15
20
25
30
35
6 onth 1year 3year 5 year S n e
In eptton
Kotak pportun ty fund
S&P 500
Volatility Measures
Portfolio Turnover Ratio- 332.69%Standard Deviation: 38.74%Beta: 1.05R-Squared: 0.93Sharpe Ratio: -0.35
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Birla Sun Life Mutual Fund- Birla Sun Life Asset Management Company follows a
long-term, fundamental research based approach to investment. The approach is to
identify companies, which have excellent growth prospects and strong fundamentals. The
fundamentals include the quality of the companys management, sustainability of its
business model and its competitive position, amongst other factors.
Trustee Birla Sun Life Trustee Co. Ltd.
Average Asset under Management- Rs. 62, 343 crores as on 31 March 2010No. of investors- Over 23 lakh
Birla Sun Life '95 Fund
Investment objective
An open-ended balanced scheme with the objective of long term growth of capital andcurrent income, through a portfolio of equity and fixed income securities
Latest NAV 298.83 (2307/10)
52-Week High 299.71 (22/07/10)
52-Week Low 229.43(17/08/09)
Fund Category Hybrid: Equity-Oriented
Type Open -End
Inception Date February 10, 1995
Risk Grade Average
Return Grade Above Average
Net Assets (Cr) 302.58 (3006/2010)
Benchmark Crisil Balanced
Minimum Application Amount Rs 5,000 per application and Additional
Rs.1000
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Assets Allocation
Instrument Indicative
asset
allocation (%)
RiskProfil
Equity and equity related securities 69% Medium
Debt and Money Market Instruments &others
31% Low
Comparative Performance
Performance as on 30/6/2010
Absolute(%)
Compounded Annualized Return (%)
6months 1year 3year 5year SinceInception
Birla Sun Life '95 Fund 13.5 27.67 13.33 20.67 24.91
Crisil Balanced index (Benchmark) 8.26 16.56 8.12 15.96 22.56
NAV as on June 30, 2010 Rs. 289.59 per unitReturns 1 year : CAGR
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0
10
1
0
0
!
"ont
#
$
1%
ear
%
ear
%
ear&
'n
(
e
In(
e ) t '0
n
1 ' rla&
un L ' fe '9
2 und
Cr'
$
'l
1alan
(
ed'ndex
3 1en
(
# "ar
4 5
Volatility Measures
Portfolio Turnover Ratio- 51%Standard Deviation: 27.83%Beta: 1.00R-Squared: 0.86
Sharpe Ratio: -0.41
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OBSERVATION
Observations are made from the data analysis.
The following observations are drawn from the analysis of schemes:
Funds
Sharpe
Ratio
Portfolio
Turnover
Ratio %
Standard
Devitation
%
Beta
coefficient
R
squared
Reliance
Equity
Opportunity
Fund
0.0554 93 4.4376 0.8609 0.8753
DSP MLOpportunities
Fund
0.70 65 26.29 0.89 0.8483
HDFC Core
and Satellite
Fund
0.11 44.68 10.40 0.9490 0.92
Flenklin
India Flexi
Cap Fund
0.84 254.56 9.9 0.84 0.91
SBI Magnum
Contra Fund
0.31 92 35.69 0.91 0.98
HSBC IndiaOpportunity
Fund
0.0047 154 1.39 0.7794 0.9357
Tata Equity
Opportunity
Fund
0.06 136.28 37.40 1.05 0.93
Sundram
BNP Paribas
Leadership
Fund
0.65 84 31.56 1.03 0.94
Kotak
OpportunityFund
0.35 332.69 38.74 1.07 0.96
Birla Sun
Life '95 Fund
0.41 51 27.83 1.00 0.86
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00.10.20.3
Reliance
Fund
DSP Fund
HDFCFund
FlenklinCap Fund
SBI Fund
HSBC IndiaFund
Tata Fund
SundramLeadership
Fund
Kotak Fund
Birla SunLife Fund
050
100
150
200
250
300
350
Reliance
Fund
DSP Fund
HDFCFund
FlenklinCap Fund
SBI Fund
HSBC IndiaFund
Tata Fund
SundramLeadership
Fund
Kotak Fund
Birla SunLife Fund
PortfolioTurnoverRatio%offunds
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0 510
15
20
Reliance
Fund
DSP Fund
HDFCFund
FlenklinCap Fund
SBI Fund
HSBC IndiaFund
Tata Fund
SundramLeadership
Fund
Kotak Fund
Birla SunLife Fund
00.2
0.4
0.6
0.8 1
1.2
Reliance
Fund
DSP Fund
HDFCFund
FlenklinCap Fund
SBI Fund
HSBC IndiaFund
Tata Fund
SundramLeadership
Fund
Kotak Fund
Birla SunLife Fund
Beta
coefficientofunds
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0. 0
.
0. 0
.
0.
SP
SBI
SB I
T t
S m
K t
B Sf
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FINDINGS
RELIANCE EQUITY OPPORTUNIY FUND
o It is an equity-diversified fund.o It is an open ended equity scheme.
o Since the beta (F) ratio is less than 1, it implies that the securities is less volatilethan the market.
o R squared is lies between 0.85 to1 that indicates that the fund performance patternhave been in line with the index.
o It is suitable for investors looking for medium risk and above average return.
DSP ML OPPORTUNITIES FUND
o It is an open ended equity diversified growth scheme.o The beta coefficient is less than 1, that implies the security is less volatile than the
marketo The risk grade of this security is below average and overall return grade is
average.o It is suitable for those investors who are looking less risk.
HDFC CORE AND SATELLITE FUND
o
It is equity -diversified fund.o It is an open ended growth schemeo The beta coefficient is less than 1, that implies the security is less volatile than the
marketo The risk grade of this security is medium and overall return grade is average.o In HFFC one year return is 49.58% which is more as compare to other fund
scheme and lower from Reliance Equity opportunity fund.
o R squared is lies between 0.85 to1 that indicates that the fund performance patternhave been in line with the index.
FLENKLIN INDIA FLEXI CAP FUND
o It is an equity- diversified fund.o It is an open -ended equity scheme.o The beta coefficient is less than 1, that implies the security is less volatile than the
market
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o R squared is lies between 0.85 to1 that indicates that the fund performance patternhave been in line with the index
o The risk grade of this security is medium and overall return grade is average.o Portfolio turnover ratio is higher so that this fund is costlier in term of
commission, fee etc.
SBI MAGNUM CONTRA FUND
o It is an equity- diversified fund.o It is an open -ended equity schemeo The beta coefficient is less than 1, that implies the security is less volatile than the
marketo Its standard deviation is 35.69% and R squared is lies between 0.85 to1 that
indicates that the fund performance pattern have been in line with the indexo The risk grade of this security is less and overall return grade is average
HSBC INDIA OPPORTUNITY FUND
o It is an equity diversified open- ended scheme.o In HSBC the returns are lesser than other AMCso It standard deviation is 1.59% and beta is 0.7794 and R-squared is less than 1o It is low risky fund.o Portfolio turnover ratio is higher so that this fund is costlier in term of
commission, fee etc.
TATA EQUITY OPPORTUNITY FUND
o It is an equity-diversified fund.o It is an open -ended equity schemeo The beta coefficient is more than 1, that implies the security is more volatile than
the market.
o This fund is risky and overall return grade is below average.o Portfolio turnover ratio is higher so that this fund is costlier in term of
commission, fee etc.
SUNDARAM BNP PARIBAS LEADERSHIP FUND
o It is an equity-diversified fund.o It is an open -ended equity schemeo The beta coefficient is more than 1, that implies the security is more volatile than
the market.
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o This fund is risky and overall return grade is average.o R squared is lies between 0.85 to1 that indicates that the fund performance pattern
have been in line with the index
KOTAK OPPORTUNITY FUND
o It is an equity diversified open- ended schemeo R squared is lies between 0.85 to1 that indicates that the fund performance pattern
have been in line with the index.o Portfolio turnover ratio is higher so that this fund is costlier in term of
commission, fee etc.o The beta coefficient is more than 1, that implies the security is more volatile than
the market.
o This funds risk grade is above average and overall return is average.
BIRLA SUN LIFE '95 FUND
o It is an equity oriented open- ended scheme.o The beta coefficient is equal to 1, that implies the security is more volatile than
the market.o This funds risk grade is above average and overall return is average.o The fund performance pattern have been in line with the index.
RECOMMENDATION
After going through a two months summer training and survey, I have come to knowabout different aspects of mutual funds and mutual funds industry. India is an emergingmarket. Consumption level is rising with rising earning level. Economic indicators microand macro both show a sky facing arrows. Data shows that there will be more number ofbillionaires from India than any of other country.
We know that Indians are earning more therefore spending more, but how much theysave/invest in order to secure future. There are numbers of traditional ways of saving.They give guaranteed return with low risk. High risk associated investment options wasnot considered a right decision. India is a young country having a considerably big part ofyoung people. They are more risk taker. They need a right direction for investmentoptions. This study and survey on mutual funds is a small eye hole to see the picture ofmutual funds industry in India. This provides almost clear view to the readers.
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8/9/2019 Final Report of MF
55/55
Mutual funds industry is enlarging its size in India. JVs, foreign JVs and acquisitions arein trend. AUM has gone to $8 trillion, number of investors is rising, and number ofAMCs is going up. These changes are likely to happen. Indian monetary policy issupporting new business. Private sector is aggressively participating in mutual fundsbusiness. Numbers of schemes are much more than earlier.
With such shining sides, double digit inflation rate, bearish stock market, RBIs high bank rates, squeezing liquidity and other dark sides putting pressure on consumerssaving. This situation pushes investors back from investment. They wait and hold cashrather than investing. This study found that investors are willing to invest with high rateof return. They know high return always adhere to high risk but market still is not incorrection mode. It will take time.
Indian market potential is high, investors are willing to pour money in mutual funds,despite some temporary restraints, and other economic factors are in favorable mode.Thus we need proper management of advisory services, more schemes, financial advisors
and institutions to cater untouched markets.
Industry need to revise its business strategy. Investors perception is not prioritized yet.Instead of completing targets, advisors working under institutions should consider therequirement of investors. We need to change pattern of selling mutual funds schemes.I hope this study will help readers to identify industrys unidentified areas where theyneed to work out.