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MUTUAL FUND
A
PROJECT REPORT
ON
MANAGEMENT OF FINANCIAL SERVICES
SUBMITTED TOWARDS PARTIAL FULFILLMENT
OF
POSTGRADUATE PROGRAMME IN MANAGEMENT
SUBMITTED TO SUBMITTED BY
PROF: SAMARJEET SEN D.RAVI H2-23
GUPTA
(3rd SEMESTER)
SPECIALIZATION MARKETING + FINANCE
EASTERN INSTITUTE FOR INTEGRATED LEARNING IN MANAGEMENT
GILANDER HOUSE
NOTICE
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THIS PROJECT IS SOLELY DONE BY ME , AND SHOULD BE TAKEN AS FOR
READING AND UNDERSTANDING PURPOSE ONLY. IT MAY BE WITH
RESULTS WHICH MAY ALTER FULLY OR PARTIALY. TAKE THIS PROJECTONL FOR UNDERSTAND PUPOSE.
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ACKNOWLEDGEMENT
We are thankful to MR. Samarjeet sen gupta who has given this opportunity
for doing a project work on MUTUAL FUND. From this study we have
gathered knowledge of services which are provided by the mutual fund
houses and also find out which of the firm is having good service.
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1)INTRODUCTION
Mutual funds works in the area of stocks and bonds.
Stocks
Stocks represent shares of ownership in a public company. Examples of public
companies include Reliance, ONGC and Infosys. Stocks are considered to be the
most common owned investment traded on the market.
Bonds
Bonds are basically the money which you lend to the government or a company,
and in return you can receive interest on your invested amount, which is back
over predetermined amounts of time. Bonds are considered to be the most
common lending investment traded on the market.
There are many other types of investments other than stocks and bonds
(including annuities, real estate, and precious metals), but the majority of
mutual funds invest in stocks and/or bonds.
Regulatory authorities
To protect the interest of the investors, SEBI formulates policies and regulatesthe mutual funds. It notified regulations in 1993 (fully revised in 1996) andissues guidelines from time to time. MF either promoted by public or by privatesector entities including one promoted by foreign entities is governed by theseRegulations.
SEBI approved Asset Management Company (AMC) manages the funds bymaking investments in various types of securities. Custodian, registered withSEBI, holds the securities of various schemes of the fund in its custody.
According to SEBI Regulations, two thirds of the directors of Trustee Company
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or board of trustees must be independent.The Association of Mutual Funds in India (AMFI) reassures the investors in unitsof mutual funds that the mutual funds function within the strict regulatory
framework. Its objective is to increase public awareness of the mutual fund
industry.
AMFI also is engaged in upgrading professional standards and in promoting
best industry practices in diverse areas such as valuation, disclosure,
transparency etc.
2) Mutual funds
What is mutual fund?
A mutual fund is just the connecting bridge or a financial intermediary that
allows a group of investors to pool their money together with a predetermined
investment objective. The mutual fund will have a fund manager who is
responsible for investing the gathered money into specific securities (stocks orbonds). When anyone invest in a mutual fund, the person is buying units or
portions of the mutual fund and thus on investing becomes a shareholder or unit
holder of the fund. Mutual funds are considered as one of the best available
investments as compare to others they are very cost efficient and also easy to
invest in, thus by pooling money together in a mutual fund, investors can
purchase stocks or bonds with much lower trading costs than if they tried to do
it on their own. But the biggest advantage to mutual funds is diversification, by
minimizing risk & maximizing returns
Types of mutual fund
Wide variety of Mutual Fund Schemes exists to cater to the needs such as
financial position, risk tolerance and return expectations etc. thus mutual funds
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has Variety of flavors, Being a collection of many stocks, an investors can go for
picking a mutual fund might be easy. There are over hundreds of mutual funds
scheme to choose from
Mutual fund category: BY STRUCTURE
i) Open ended scheme
An open-end fund is one that is available for subscription all through the year.
These do not have a fixed maturity. Investors can conveniently buy and sell units
at Net Asset Value ("NAV") related prices. The key feature of open-end schemesis liquidity
ii)Close ended scheme
These schemes have a pre-specified maturity period. One can invest directly in
the scheme at the time of the initial issue. Depending on the structure of the
scheme there are two exit options available to an investor after the initial offer
period closes. Investors can transact (buy or sell) the units of the scheme on the
stock exchanges where they are listed. The market price at the stock exchanges
could vary from the net asset value (NAV) of the scheme on account of demand
and supply situation, expectations of unit holder and other market factors.
Alternatively some close-ended schemes provide an additional option of selling
the units directly to the Mutual Fund through periodic repurchase at the
schemes NAV; however one cannot buy units and can only sell units during the
liquidity window. SEBI Regulations ensure that at least one of the two exit
routes is provided to the investor
iii) INTERVAL SCHEMES
Interval Schemes are that scheme, which combines the features of open-ended
and close-ended schemes. The units may be traded on the stock exchange or may
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be open for sale or redemption during pre-determined intervals at NAV related
prices
Mutual fund category: BY NATURE
i) EQUITY FUND
These funds invest a maximum part of their corpus into equities holdings. Thestructure of the fund may vary different for different schemes and the fundmanagers outlook on different stocks. The Equity Funds are sub-classifieddepending upon their investment objective, as follows:
y Diversified Equity Fundsy Mid-Cap Fundsy Sector Specific Fundsy Tax Savings Funds (ELSS)
Equity investments are meant for a longer time horizon, thus Equity funds rank
high on the risk-return matrix
ii) DEBT FUNDS
The objective of these Funds is to invest in debt papers. Government authorities,
private companies, banks and financial institutions are some of the major
issuers of debt papers. By investing in debt instruments, these funds ensure low
risk and provide stable income to the investors. Debt funds are further classified
as:
Gilt Funds: Invest their corpus in securities issued by Government,
popularly known as Government of India debt papers. These Funds carry
zero Default risk but are associated with Interest Rate risk. These schemes
are safer as they invest in papers backed by Government.
Income Funds: Invest a major portion into various debt instruments such
as bonds, corporate debentures and Government securities.
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MIPs: Invests maximum of their total corpus in debt instruments while
they take minimum exposure in equities. It gets benefit of both equity and
debt market. These scheme ranks slightly high on the risk-return matrix
when compared with other debt schemes.
Short Term Plans (STPs): Meant for investment horizon for three to sixmonths. These funds primarily invest in short term papers like Certificate
of Deposits (CDs) and Commercial Papers (CPs). Some portion of the
corpus is also invested in corporate debentures.
Liquid Funds: Also known as Money Market Schemes, These funds
provides easy liquidity and preservation of capital. These schemes invest
in short-term instruments like Treasury Bills, inter-bank call money
market, CPs and CDs. These funds are meant for short-term cash
management of corporate houses and are meant for an investmenthorizon of 1day to 3 months. These schemes rank low on risk-return
matrix and are considered to be the safest amongst all categories of
mutual funds.
iii) BALANCED FUND
As the name suggest they, are a mix of both equity and debt funds. They invest in
both equities and fixed income securities, which are in line with pre-definedinvestment objective of the scheme. These schemes aim to provide investors with
the best of both the worlds. Equity part provides growth and the debt part
provides stability in returns
Further the mutual funds can be broadly classified on the basis of
investment parameter viz,
Each category of funds is backed by an investment philosophy, which is pre-defined in the objectives of the fund. The investor can align his own investment
needs with the funds objective and invest accordingly.
Mutual fund By investment objective
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Growth Schemes: Growth Schemes are also known as equity schemes. The aim
of these schemes is to provide capital appreciation over medium to long term.
These schemes normally invest a major part of their fund in equities and are
willing to bear short-term decline in value for possible future appreciation.
Income Schemes: Income Schemes are also known as debt schemes. The aim of
these schemes is to provide regular and steady income to investors. These
schemes generally invest in fixed income securities such as bonds and corporate
debentures. Capital appreciation in such schemes may be limited.
Balanced Schemes: Balanced Schemes aim to provide both growth and income
by periodically distributing a part of the income and capital gains they earn.
These schemes invest in both shares and fixed income securities, in the
proportion indicated in their offer documents (normally 50:50).
Money Market Schemes: Money Market Schemes aim to provide easy liquidity,
preservation of capital and moderate income. These schemes generally invest in
safer, short-term instruments, such as treasury bills, certificates of deposit,
commercial paper and inter-bank call money.
Other scheme
Tax schemeTax-saving schemes offer tax rebates to the investors under tax laws prescribed
from time to time. Under Sec.88 of the Income Tax Act, contributions made to
any Equity Linked Savings Scheme (ELSS) are eligible for rebate.
Index scheme
Index schemes attempt to replicate the performance of a particular index such
as the BSE Sensex or the NSE 50. The portfolio of these schemes will consist of
only those stocks that constitute the index. The percentage of each stock to thetotal holding will be identical to the stocks index weightage. And hence, the
returns from such schemes would be more or less equivalent to those of the
Index.
Sector scheme
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These are the funds/schemes which invest in the securities of only those sectors
or industries as specified in the offer documents. E.g. Pharmaceuticals, Software,
Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in
these funds are dependent on the performance of the respective
sectors/industries. While these funds may give higher returns, they are morerisky compared to diversified funds. Investors need to keep a watch on the
performance of those sectors/industries and must exit at an appropriate time.
Types of return
There are three ways, where the total returns provided by mutual funds can be
enjoyed by investors:
Income is earned from dividends on stocks and interest on bonds. A fund pays
out nearly all income it receives over the year to fund owners in the form of a
distribution.
If the fund sells securities that have increased in price, the fund has a capital
gain. Most funds also pass on these gains to investors in a distribution.
If fund holdings increase in price but are not sold by the fund manager, the
fund's shares increase in price. You can then sell your mutual fund shares for aprofit. Funds will also usually give you a choice either to receive a check for
distributions or to reinvest the earnings and get more shares
3)Different plans that Mutual fund offers?
Dividend Plan: Under the Dividend Plan, the fund distributes a substantial partof the surplus to investors in the form of dividend (income distribution).
Growth Plan: Under the Growth Plan, an investor realizes only the capital
appreciation on the investment (by an increase in NAV) and normally does not
get any income in the form of income distribution.
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Re-investment Plan: Here the income distribution accrued on a mutual fund
scheme is automatically re-invested in purchasing additional units under the
scheme. In most cases mutual funds offer the investors an option of collecting
income distribution or re-invest in the same scheme at scheme NAV/NAV based
price.
4)What is a mutual fund's NAV?Net asset value (NAV) represents a fund's per share market value. This is the
price at which investors buy ("bid price") fund shares from a fund company and
sell them ("redemption price") to a fund company. It is derived by dividing the
total value of all the cash and securities in a fund's portfolio, less any liabilities,by the number of shares outstanding. An NAV computation is undertaken once
at the end of each trading day based on the closing market prices of the
portfolio's securities.
For example, if a fund has assets of $50 million and liabilities of $10 million, it
would have a NAV of $40 million.
This number is important to investors, because it is from NAV that the price per
unit of a fund is calculated. By dividing the NAV of a fund by the number of
outstanding units, you are left with the price per unit. In our example, if the fund
had 4 million shares outstanding, the price-per-share value would be $40 million
divided by 4 million, which equals $10.
This pricing system for the trading of shares in a mutual fund differs
significantly from that of common stock issued by a company listed on a stock
exchange. In this instance, a company issues a finite number of shares through
an initial public offering (IPO), and possibly subsequent additional offerings,
which then trade in the secondary market. In this market, stock prices are set by
market forces of supply and demand. The pricing system for stocks is based
solely on market sentiment.
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Because mutual funds distribute virtually all their income and realized capital
gains to fund shareholders, a mutual fund's NAV is relatively unimportant in
gauging a fund's performance, which is best judged by its total return.
5)ADVANTAGE & DISADVANTAGE OF MUTUAL FUND.
Advantage of mutual funds.
1. Professional Management - The basic advantage of funds is that, they are
professional managed, by well qualified professional. Investors purchase funds
because they do not have the time or the expertise to manage their own
portfolio. A mutual fund is considered to be relatively less expensive way to make
and monitor their investments
2. Diversification - Purchasing units in a mutual fund instead of buying
individual stocks or bonds, the investors risk is spread out and minimized up to
certain extent. The idea behind diversification is to invest in a large number of
assets so that a loss in any particular investment is minimized by gains in others.
3. Economies of Scale - Mutual fund buy and sell large amounts of securities at
a time, thus help to reducing transaction costs, and help to bring down the
average cost of the unit for their investors.
4. Liquidity -Just like an individual stock, mutual fund also allows investors to
liquidate their holdings as and when they want.
5. Simplicity - Investments in mutual fund is considered to be easy, compare to
other available instruments in the market, and the minimum investment is
small. Most AMC also have automatic purchase plans whereby as little as Rs.
2000, where SIP start with just Rs.50 per month basis.
Disadvantages of Investing Mutual Funds:
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1.Professional Management- Some funds doesnt perform in neither the
market, as their management is not dynamic enough to explore the available
opportunity in the market, thus many investors debate over whether or not the
so-called professionals are any better than mutual fund or investor himself, for
picking up stocks.
2. Costs The biggest source of AMC income, is generally from the entry & exit
load which they charge from an investors, at the time of purchase. The mutual
fund industries are thus charging extra cost under layers of jargon
3. Dilution - Because funds have small holdings across different companies, high
returns from a few investments often don't make much difference on the overall
return. Dilution is also the result of a successful fund getting too big. When
money pours into funds that have had strong success, the manager often hastrouble finding a good investment for all the new money.
4. Taxes - when making decisions about your money, fund managers don't
consider your personal tax situation. For example, when a fund manager sells a
security, a capital-gain tax is triggered, which affects how profitable the
individual is from the sale. It might have been more advantageous for the
individual to defer the capital gains liability.
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6)MUTUAL FUND CHOOSEN FOR STUDY
BIRLA SUNLIFE MUTUAL FUND
BIRLA SUN LIFE ADVANTAGE FUND GROWTH
Birla Sun Life ADVANTAGE Fund is a diversified equity fund enabling
investors to capitalize on the immense growth opportunities provided by the
stock market while at the same time minimizing the risk.
Launched in Feb 24, 1995, the fund is an open-ended growth scheme with a
LARGE CAP theme.
OBJECTIVE
Aims to achieve long term growth of capital at relatively moderate levels of
risk through a diversified research based investment approach.
Fund features
Type of scheme Open ended
Nature Equity
Option Growth
Inception date Feb24-1995
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Face value( rs/unit) 10
Fund size in (rs crore) 405.44 as on nov 30, 2009
Last dividend declared 80 % as on march 30,2000
Minimum investment(rs) 5000/-
Purchase redemption daily
nav Daily
Entry load 0%
Exit load If redeemed between 0 days to 7
days exit load is 0.5%
Increase or decrease in fund size as
on oct 30,2009(in rs crore)
-4.8
Mutual fund
Birla Sun Life Mutual Fund
Ahura Centre , 2nd Floor, A. 96/A-D,
Mahakali Caves Road, Andheri (E)
Mumbai
Tel.-56928000
Asset Management Company
Birla Sun Life Asset Management Company Ltd.
One India Bulls Centre , Tower 1, 17th Flr
841, Senapati Bapat Marg, Elphinstone Road
Mumbai - 400013 Tel.- 66928000
Registrar
Computer Age Management Services Private Limited
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A&B, Lakshmi Bhavan
609, Anna Salai
Chennai
NAV
Latest nav 146.80 as on dec 2009
Bench mark index-bse sensex 16,719.83 as on dec 18, 2009
52 week high 150.76 as on dec 8, 2009
52 week low 66.01 as on mar 9, 2009
Risk and return
Scheme performance as on dec 18,2009
1 month 3 month 6 month 1 year 3 year 5year Since
inception
-1.18 2.22 22.41 77.10 6.04 18.90 20.40
Risk
mean -0.55
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Standard deviation 5.51
beta 0.93
Portfolio
P/E 26.43 AS ON NOV 2009
P/B 4.36 AS ON NOV 2009
Dividend yielded 0.87 as on Nov - 2009
Market capital(Rs in crore)
Large
Mid
small
71,009.95 as on Nov - 2009
63.25 AS ON NOV 2009
33.28 AS ON NOV 2009
NA AS ON NOV 2009
Top 5 holding percentage 20.29 AS ON NOV 2009
No of stocks 47
Expense ratio 2.32
Whats in?
Housing Development Finance Corporation Ltd.
Mahindra & Mahindra Ltd
Cipla Ltd
Tata Steel Ltd.
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Whats out?
Hindustan Petroleum Corporation Ltd
Housing Development Finance Corporation Ltd
Indian Oil Corporation Ltd
Dharti Dredging
Asset allocation
Equity Debt Cash & equivalent
96.62 0.0 3.38
equty
debt
cash & equivalent
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7)MUTUAL FUNDS CHOOSEN FOR COMPARISION
i)FRANKLIN ASIAN EQUITY FUND GROWTH
OBJECTIVE
An open-end diversified equity fund that seeks to provide medium to longterm appreciation through investments primarily in Asian Companies /
sectors (excluding Japan) with long term potential across market
capitalization
Fund features
Type of scheme Open ended
Nature Equity
Option Growth
Inception date Jan 16,2008
Face value( rs/unit) 10
Fund size in (rs crore) 416.45 as on nov 30, 2009
Last dividend declared NA
Minimum investment(rs) 5000/-
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Purchase redemption daily
nav Daily
Entry load 0%
Exit load If redeemed between 0 year to 1
year exit load is 1%
Increase or decrease in fund size as
on oct 30,2009(in rs crore)
1.62
Mutual fund
Franklin Templeton Mutual Fund
Level 4, Wockhardt Towers
Bandra Kurla Complex, Bandra (East).
Mumbai
Tel.-67519100
Asset Management Company
Franklin Templeton Asset Management (India) Pvt. Ltd.
Wockhardt Towers, 4th Floor,
Bandra Kurla Complex,
Mumbai - 400051 Tel.- 67519100
Registrar
Franklin Templetion Asset Managment (India) Pvt. Ltd.
Franklin Templetion Centre, no.7,
3rd Cross Street, Adyar
Chennai
Tel.-24407000
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NAV
Latest nav 10.06 as on dec 18, 2009
Bench mark index-bse sensex NA
52 week high 10.29 as on dec 7, 2009
52 week low 6.23 as on mar 9, 2009
Risk and return
Scheme performance as on dec 18, 2009
1 month 3 month 6 month 1 year 3 year 5year Since
inception
-0.61 -0.54 17.28 46.57 NA NA 0.32
Risk
mean -0.28
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Standard deviation 4.11
beta 7.87
Portfolio
P/E 2.14 AS ON NOV 2009
P/B 0.86 AS ON NOV 2009
Dividend yielded 0.13
Market capital(Rs in crore)
Large
Mid
small
2,866.02
4.80 AS ON NOV 2009
4.97 AS ON NOV 2009
NA AS ON NOV 2009
Top 5 holding percentage 26.30
No of stocks 58
Expense ratio 2.30
Whats in?
HDFC Bank Ltd.
Great Eastern Shipping Company Ltd
Hyundai Engineering & Construction (South Korea)
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Whats out?
Hankook Tire America Corp.
HDFC Bank Ltd
Oil & Natural Gas Corpn Ltd
KT&G Corp
Asset allocation
Equity Debt Cash & equivalent
95.52 0.0 4.48
ii) ING CORE EQUITY FUND GROWTH
OBJECTIVE
Seeks to provide long term capital appreciation by investing pre- dominantly
in a portfolio of high quality equity and equity related securities
Fund features
Type of scheme Open ended
Nature Equity
Option Growth
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Inception date May 6,1999
Face value( rs/unit) 10
Fund size in (rs crore) 58.44 as on nov 30, 2009
Last dividend declared NA
Minimum investment(rs) 5000/-
Purchase redemption daily
Nav Daily
Entry load 0%
Exit load If redeemed between 0 days to 365
days exit load is 1%
Increase or decrease in fund size as
on oct 30,2009(in rs crore)
2.8
Mutual fund
ING Mutual Fund
101 Windsor ,
1st Floor,Off C.S.T.Road, Santacruz E
Mumbai
Tel.-3982 7999
Asset Management Company
ING Investment Management (India) Pvt Ltd.
601/602,"Windsor", Off CST Road,
Kalina, Santacruz (E),
Mumbai - 400098 Tel.- 40827999
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Registrar
Computer Age Management Services Private Limited
A&B, Lakshmi Bhavan
609, Anna Salai
Chennai
Nav
Latest nav 33.14 as on Dec 21, 2009
Bench mark index-bse sensex 8,809.14 as on Dec 21, 2009
52 week high 33.97 as on Dec 10, 2009
52 week low 16.48 as on Mar 9, 2009
Risk and return
Scheme performance as on dec 18, 2009
1 month 3 month 6 month 1 year 3 year 5year Since
inception
1.09 3.51 21.97 69.34 7.74 21.51 11.99
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Risk
Mean -0.54
Standard deviation 5.44
Beta 0.92
Portfolio
P/E 30.65 AS ON NOV 2009
P/B 4.73 AS ON NOV 2009
Dividend yielded 1.77
Market capital(Rs in crore)
Large
Mid
Small
90,863.16
74.55 AS ON NOV 2009
18.43 AS ON NOV 2009
NA AS ON NOV 2009
Top 5 holding percentage 26.59 AS ON NOV 2009
No of stocks 41
Expense ratio 2.50
Whats in?
Maruti Suzuki India Ltd
Financial Technologies
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Whats out?
Reliance Communication Ventures Ltd.
JaiPrakash Associates Ltd.
Asset allocation
Equity Debt Cash & equivalent
92.98 0.0 7.02
iii) MORGAN STANLEY A.C.E FUND - GROWTH
OBJECTIVE
The investment objective of the scheme is to generate long-term capital
growth from an actively managed portfolio of equity and equity-related
securities including equity derivatives.
Fund features
Type of scheme Open ended
Nature Equity
Option Growth
Inception date Apr 3,2008
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Face value( rs/unit) 10
Fund size in (rs crore) 131.67 as on nov 30, 2009
Last dividend declared NA
Minimum investment(rs) 5000/-
Purchase redemption Daily
nav Daily
Entry load 0%
Exit load If redeemed between 0 year to 1
year exit load is 1%
Increase or decrease in fund size as
on oct 30,2009(in rs crore)
13.16
Mutual fund
Morgan Stanley Mutual Fund
Forbes Building, 5th Floor,
Charanjit Rai Marg,
Mumbai
Tel.-2209 7045 ,22096600
Asset Management Company
Morgan Stanley Asset Management (I) Pvt. Ltd.
Office No. 201, 2nd Floor,
DBS House, Prescott Street, Fort,
Mumbai - 400001 Tel.- 40779226 ,40779227
Registrar
Karvy Computershare Pvt. Ltd.
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21, Avenue 4,
Street No 1, Banjara Hills
Hyderbad
NAV
Latest nav 12.72 as on dec 18, 2009
Bench mark index-bse sensex 2097.18
52 week high 12.85 as on dec 7, 2009
52 week low 5.29 as on mar 9, 2009
Risk and return
Scheme performance as on dec 18, 2009
1 month 3 month 6 month 1 year 3 year 5year Since
inception
1.53 11.05 37.49 93.84 NA NA 15.09
Risk
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mean -0.47
Standard deviation 5.50
beta 0.93
Portfolio
P/E 24.29 AS ON NOV 2009
P/B 4.53 AS ON NOV 2009
Dividend yielded 0.75
Market capital(Rs in crore)
Large
Mid
small
53,415.21
54.38 AS ON NOV 2009
34.28 AS ON NOV 2009
5.16 AS ON NOV 2009
Top 5 holding percentage 19.10
No of stocks 49
Expense ratio 2.48
Whats in?
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Power Finance Corporation Ltd
I-Flex Solutions Limited
Cox & Kings Ltd.
Whats out?
Reliance
Infrastructure
Ltd.
Exide
Industries Ltd
Jindal Steel
and Power
Ltd.
Asset allocation
Equity Debt Cash & equivalent
94.94 0.0 5.06
iv) Reliance mutual fund
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OBJECTIVE
The primary investment objective of the scheme is to seek to generate capital
appreciation & provide long-term growth opportunities by investing in a
portfolio constituted of equity & equity related securities of top 100companies by market capitalization & of companies which are available in the
derivatives segment from time to time and the secondary objective is to
generate consistent returns by investing in debt and money market securities.
Fund features
Type of scheme Open ended
Nature Equity
Option Growth
Inception date Mar 28,2006
Face value( rs/unit) 10
Fund size in (rs crore) 2254.11 as on nov 30, 2009
Last dividend declared NA
Minimum investment(rs) 5000/-
Purchase redemption Daily
nav Daily
Entry load 0%
Exit load If redeemed between 0 year to 1
year exit load is 1%
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Increase or decrease in fund size as
on oct 30,2009(in rs crore)
65.71
Mutual fund
Reliance Mutual Fund
Kamala Mills Compound, Trade World, B - Wing
7th Floor, Senapati Bapat Marg, Lower parel (West)
Mumbai
Tel.-30414800Asset Management Company
Reliance Capital Asset Management Ltd.
11th & 12th Flr One India Bull Centre, Tower 1
841 Senapati Bapat Marg, Elphinstone Rd
Mumbai - 400013 Tel.- 30414800 ,30301111
Registrar
Karvy Computershare Pvt. Ltd.
21, Avenue 4,
Street No 1, Banjara Hills
Hyderbad
NAV
Latest nav 14.80 as on dec 18, 2009
Bench mark index-bse sensex 4987.70
52 week high 15.24 as on dec 7, 2009
52 week low 8.21 as on mar 9, 2009
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Risk and return
Scheme performance as on dec 18, 2009
1 month 3 month 6 month 1 year 3 year 5year Since
inception
-0.91 0.35 16.68 49.27 8.64 NA 11.09
Risk
mean -0.40
Standard deviation 4.33
beta 0.73
Portfolio
P/E 29.56 AS ON NOV 2009
P/B 3.99 AS ON NOV 2009
Dividend yielded 0.72
Market capital(Rs in crore) 76,849.00
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Large
Mid
small
62.50 AS ON NOV 2009
13.27 AS ON NOV 2009
NA AS ON NOV 2009
Top 5 holding percentage 34.07
No of stocks 21
Expense ratio 1.86
Whats in?
BharatHeavy Electricals Ltd
Whats out?
HindustanPetroleum
Corporation
Ltd
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Asset allocation
Equity Debt Cash & equivalent
87.20 0.0 12.80
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Comparative analysis of different mutual funds
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Exit Load If
redeemed
between 0
days to 7
days exitload is
0.5%
If
redeemed
between 0
year to 1
year exitload is 1%
If
redeemed
between 0
days to
365 daysexit load is
1%
If
redeemed
between 0
year to 1
year exitload is 1%
If
redeemed
between 0
year to 1
year exitload is 1%
Increase or
decrease in
funds since
oct
30,2009(rscrore)
-4.8 1.62 2.8 13.16 65.71
Findings
a) All funds are open ended, growth equity funds.
b)Fund size of RELIANCE MUTUAL fund is maximum.c) Minimum requirement of fund for investment in any of the scheme is
5000/- Rs.
d)NAV is calculated on daily basis.
e) Exit load ofBIRLA SUNLIFE ADVANTAGE fund is very low 0.5% for the
first week.
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f) Reliance mutual fund has the highest increase in funds since oct,2009.
g) All funds are showing positive growth but birla sunlife is showing
negative growth.
-10
0
10
20
30
40
50
60
70
Increase or decrease in funds
since oct 30,2009(rs crore)
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2)On the basis of NAVcompany Birla
sunlife
advantage
FRANKLIN
ASIAN
EQUITY
INGCore
Equity
Fund
Morgan
Stanley A
Reliance
Equity
Fund
Latest NAV 146.80 as
on Dec ,
2009
10.06 as on
dec 18,
2009
33.14 as
on Dec
21, 2009
12.72 as on
dec 18,
2009
14.80 as on
dec 18,
2009
Benchmark
Index - S&P
Nifty
16,719.83
as on dec
18, 2009
NA 8,809.14as on Dec
21, 2009
2097.18 4987.70
52 - Week
High
150.76 as
on dec 8,
2009
10.29 as on
dec 7, 2009
33.97 as
on Dec
10, 2009
12.85 as
on dec 7,
2009
15.24 as
on dec 7,
2009
52 - Week
Low
66.01 as on
mar 9,
2009
6.23 as on
mar 9,
2009
16.48 as
on Mar 9,
2009
5.29 as on
mar 9,
2009
8.21 as on
mar 9,
2009
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findings:
1)Nav of birla sunlife fund has much fluctuation
2)RELIANCE mutual fund has less fluctuauion in NAV.
0
50
100
150
200
250
Birla
sunlife
advantage
Franklin
Asian
Equity
ING Core
Equity
Fund
Morgan
Stanley A
Reliance
Equity
Fund
52- Week Low
52- Week High
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3)On the basis of Risk & return
SCHEME PERFORMANCE (%) AS ON DEC 18, 2009
company 1
MONT
H
3
MONTH
S
6
MONTH
S
1
YEA
R
3
YEA
R
5
YEA
R
SINCE
INCEPTIO
N
Birla
sunlife
advantag
-1.18 2.22 22.41 77.10 6.04 18.9 20.40
FRANKLI
N ASIAN
EQUITY
-0.61 -0.54 17.28 46.57 NA NA 0.32
INGCore
Equity
Fund
1.09 3.51 21.97 69.34 7.74 21.51 11.99
Morgan
Stanley A
1.53 11.05 37.49 93.84 NA NA 15.09
Reliance
Equity
Fund
-0.91 0.35 16.68 49.27 8.64 NA 11.09
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f)The second good performer is BIRLA SUNLIFE ADVANTAGE MUTUAL FUND.
g)Franklin Asian equity fund is the lowest performer of all.
4)On the basis of Risk
company Birla
sunlifeadvantage
FRANKLIN
ASIANEQUITY
INGCore
EquityFund
Morgan
Stanley A
Reliance
EquityFund
Mean -0.55 -0.28 -0.54 -0.47 -0.40
Standard
deviation
5.51 4.11 5.44 5.50 4.33
Beta 0.93 7.87 0.92 0.93 0.73
-1
0
1
2
3
4
5
6
7
8
9
mean
Standard deviation
beta
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Dividend
yield
0.87 0.13 1.77 0.75 0.72
Market
capital(inRs crore)
71,009.95 2,866.02 90,863.16 53,415.21 76,849.00
large 63.25 4.80 74.55 54.38 62.50
mid 33.28 4.97 18.43 34.28 13.27
small NA NA NA 5.16 AS ON
NOV 2009
NA
Top 5
holding %
20.29 26.30 26.59 19.10 34.07
No of
stocks
47 58 41 49 21
Expense
ratio (%)
2.32 2.30 2.50 2.48 1.86
( P/E ratio, P/B ratio, market capital all are takenAS ON NOV 2009)
{p/e ratio= market value of share/ earning per share.
p/b ratio= stock price/ (total assets- intangible assets and liabilities.)}
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Graph on p/e & p/b ratio
Graph on no of stocks each fund has.
0
5
10
15
20
25
30
35
Birla sunlife
advantage
Franklin Asian
Equity
ING Core Equity
Fund
Morgan Stanley
A
Reliance Equity
Fund
P/E
P/B
0
10
20
30
40
50
60
Birla sunlife
advantage
Franklin
Asian Equity
ING Core
Equity Fund
Morgan
Stanley A
Reliance
Equity Fund
No of stocks
No of stocks
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Findings:
a) P/E ratio of ING Core Equity Fund is maximum, while the minimum is of
FRANKLIN ASIAN EQUITY.
b) P/B ratio of ING Core Equity Fund is maximum, while the minimum is of
FRANKLIN ASIAN EQUITY.
c) MARKET CAPITAL OF ING Core Equity Fund is much higher 90,863.16
d) Expense ratio of all mutual funds is almost same.
e) Franklin has highest no of stocks.
6)On the basis ofAsset allocation (%)
Company Birla
sunlifeadvantage
FRANKLIN
ASIANEQUITY
ING Core
EquityFund
Morgan
Stanley A
Reliance
EquityFund
Equity 96.62 95.52 92.98 94.94 87.20
Debt 0.0 0.0 0.0 0.0 0.0
Cash &
equivalent
3.37 4.48 7.02 5.06 12.80
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Graph for asset allocation investment.
findings
a)Mutual fund invests most of their investment in EQUITY.
b)There is no investment in DEBT.
c)Investment in cash & equivalent is very low.
0
20
40
60
80
100
120
Birla sunlife
advantage
Franklin Asian
Equity
ING Core
Equity Fund
Morgan
Stanley A
Reliance
Equity Fund
equity
debt
Cash & equivalent
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7)ConclusionA mutual fund brings together a group of people and invests theirmoney in stocks, bonds, and other securities.The advantages of mutuals are professional management,diversification ,economies sale, simplicity and liquidity.The disadvantages of mutuals are high costs, over-diversification,
possible tax consequences, and the inability of management toguarantee a superior return.There are many, many types of mutual funds. You can classify fundsbased on asset class, investing strategy, region, etc.Mutual funds have lots of costs.Costs can be broken down into ongoing fees (represented bytheexpense ratio) and transaction fees (loads)The biggest problems with mutual funds are their costs and fees.Mutual funds are easy to buy and sell. You can either buy them
directly from the fund company or through a third party.
Mutual fund ads can be very deceiving.
8)Bibliography1)Www. Mutualfundindia.com2)www.birlasunlife mutualfund.com3)www.franklin funds.com4)www.reliancemutualfund.com5)www.morganstnleymutualfunds.com6)www.google.com7)www. Ing corefunds.com
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