Acadamic Project- Mutual Funds

CONTENTS
CHAPTER 1: INTRODUCTION....................................................................................Error! Bookmark not defined.
INTRODUCTION:.......................................................................................................Error! Bookmark not defined.
NEED OF THE STUDY ...............................................................................................................................................4
OBJECTIVES OF THE STUDY.....................................................................................................................................5
SCOPE OF THE STUDY: ............................................................................................................................................5
BENEFITS OF MUTUAL FUNDS INVESTMESNTS: .....................................................................................................5
LIMITATIONS OF MUTUAL FUND INVESTMENTS:...................................................................................................7
LIMITATIONS...........................................................................................................................................................8
CHAPTER 2: REVIEW OF LITERATURE..........................................................................................................9
MUTUAL FUNDS AN OVERVIEW: ...................................................................................................................9
HISTORY OF MUTUAL FUNDS IN INDIA:................................................................................................................11
FIRST PHASE: 1964-1987:......................................................................................................................................11
SECOND PHASE: 1987-1993 (ENTRY OF PUBLIC SECTOR FUNDS).........................................................11
THIRD PHASE: 1993-2003(ENTRY OF PRIVATE SECTOR FUNDS)...........................................................................11
FOURTH PHASE: (SINCE FEBRUARY 2003) .................................................................................................12
FUTURE SCENARIO:...............................................................................................................................................12
RECENT TRENDS IN THE MUTUAL FUNDS INDUSTRY: ..........................................................................................13
TYPES OF MUTUAL FUNDS:...................................................................................................................................14
TYPES OF MUTUAL FUNDS:...................................................................................................................................15
CONCEPTUAL BACKGROUND OF THE STUDY:.......................................................................................................20
THE TREYNOR MEASURE:......................................................................................................................................21
THE SHARPE MEASURE: ........................................................................................................................................21
JENSON’S MODEL..................................................................................................................................................22
NET ASSET VALUE (NAV):......................................................................................................................................23
Risk v/s Return: .....................................................................................................................................................23
Snapshot of Mutual Fund Schemes. .................................................................................................................25
MARKETING STRATEGIES FOR MUTUAL FUNDS:..................................................................................................26
WORKING OF A MUTUAL FUNDS:.........................................................................................................................27
MAJOR MUTUAL FUNDS COMPANIES IN INDIA:...................................................................................................28

CHAPTER 3: COMPANY PROFILE: ..........................................................................................................................29
INDIA INFOLINE LIMITED:......................................................................................................................................29
INDIA INFOLINE MANAGEMENT:..........................................................................................................................32
CHAPTER 4: DATA ANALYSIS AND INERPRETATION.........................................................................35
SECTORIAL MUTUAL FUNDS CONSIDERED: ..........................................................................................................35
 INFRASTRUCTURE SECTOR:...........................................................................................................................36
HEALTHCARE SECTOR: ..........................................................................................................................................38
BANKING AND FINANCE SECTOR:.........................................................................................................................40
AUTO SECTOR: ......................................................................................................................................................42
TECHNOLOGY SECTOR: .........................................................................................................................................44
CHAPTER 5: FINDINGS, SUGGESTIONS AND CONCLUSION:..................................................................................46
TIPS FOR MUTUAL FUND INVERSTORS : (SUGGESTIONS).....................................................................................47
KEY STEPS FOR NVESTMENT PLANNING:..........................................................................................................48
Data Analysis & Interpretation .............................................................................................................................49
FINDINGS...............................................................................................................................................................55
CONCLUSION:........................................................................................................................................................56
BIBLIOGRAPHY ......................................................................................................................................................57
ANNEXURE ............................................................................................................................................................57
SAMPLE QUISTIONAIRE.........................................................................................................................................59

introductiion
A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial
goal. The money thus collected is then invested in capital market instruments such as shares,
debentures and other securities. The income earned through these investments and the capital
appreciations realized are shared by its unit holders in proportion to the number of units owned by
them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an
opportunity to invest in a Diversified, -professionally managed basket of securities at a relatively low
cost
.
The project idea is to project mutual funds as the better avenue for investment. Mutual fund is
productive package for a lay-investor with limited finances. Mutual fund is a very old practice in U.S.,
and it has made a recent entry into India. Common man in India still finds ‘Bank’ as a safe door for
investment. This shows that mutual funds have not gained a strong foot-hold in his life.
The project creates an awareness that the mutual fund is worthy investment practice. The various
schemes of mutual funds provide the investor with a wide range of investment options according to his
risk-bearing capacities and interest. Besides, they also give a handy return to the investor. The project
analyses various schemes of mutual fund by taking different mutual fund schemes from different
AMC’S. The future Challenges for mutual funds in India are also considered.
In simple words,
“A mutual fund is a kind of investment that uses money from many investors to invest in stocks,
bonds or other types of investment. A fund manager (or "portfolio manager") decides how to invest
the money, and for this he is paid a fee, which comes from the money in the fund.”

NEED OF THE STUDY
The study basically made to educate the investors about Mutual Funds. Analyze the various schemes
to highlight the risk and return of diversity of investment that mutual funds offer. Thus, through the
study one would understand how a common man could fruitfully convert a pittance into great penny
by wisely investing into the right scheme according to his risk- taking abilities.
A small investor is the one who is able to correctly plan & decide in which profitable & safe
instrument to invest. To lock up one’s hard earned money in a savings bank’s account is not enough to
counter the monster of inflation. Using simple concepts of diversification, power of compound
interest, stable returns & limited exposure to equity investment, one can maximize his returns on
investments & multiply one’s savings.
Investment is a serious proposition one has to look into various factors before deciding on the
instruments in which to invest. To save is not enough. One must invest wisely & get maximum
returns. One must plan investment in such a way that his investment objectives are satisfied. A sound
investment is one which gives the investor reasonable returns with a proper profitable management.
This report gives the details about various investment objectives desired by an investor, details about
the concept & working of mutual fund.
It also helps in understanding different schemes of mutual funds. Because my study depends upon
prominent funds in India and their schemes like equity, income, balance as well as the returns
associated with those schemes.
The project study was done to ascertain the asset allocation, entry load, exit load, associated with the
mutual funds. Ultimately this would help in understanding the benefits of mutual funds to investors.

OBJECTIVES OF THE STUDY
 To understand the concept of the Mutual Funds.
 To study different Sectoral Mutual Funds in India.
 To analyze the performance of different Sectoral Mutual Funds in India.
 To give a brief idea about the benefits available from Mutual Fund investment.
 To discuss about the market trends of Mutual Fund investment.
 To identify the best Sectoral Mutual Funds to invest in India.
 Explore the recent developments in the mutual funds in India.
 To suggest the best mutual funds for investors.
 To give an idea about the regulations of mutual funds.
SCOPE OF THE STUDY:
Now days, there is a lot of scope for the mutual funds. The Financial managers have to decide whether
to invest in the Shares, bonds, debentures, real estate, gold and other commodities to get the maximum
benefits for funds. The Financial Managers should also reduce the risk from the Investments. The
scope of the study is confirmed to the sectoral funds available in Indian Mutual Funds.
BENEFITS OF MUTUAL FUNDS INVESTMESNTS:
 Professional management:
Mutual Funds provide the services of experienced and skilled professionals, backed by a dedicated
investment research team that analyses the performance and prospects of companies and selects
suitable investments to achieve the objectives of the scheme.
 Diversification:
Mutual Funds invest in a number of companies across a broad cross-section of industries and
sectors. This diversification reduces the risk because seldom do all stocks decline at the same time
and in the same proportion. You achieve this diversification through a Mutual Fund with far less
money than you can do on your own.

 Convenient Administration:
Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as bad
deliveries, delayed payments and follow up with brokers and companies. Mutual Funds save your
time and make investing easy and convenient.
 Return Potential:
Over a medium to long-term, Mutual Funds have the potential to provide a higher return as they
invest in a diversified basket of selected securities.
 Low Costs:
Mutual Funds are a relatively less expensive way to invest compared to directly investing in the
capital markets because the benefits of scale in brokerage, custodial and other fees translate into
lower costs for investors.
 Liquidity:
In open-end schemes, the investor gets the money back promptly at net asset value related prices
from the Mutual Fund. In closed-end schemes, the units can be sold on a stock exchange at the
prevailing market price or the investor can avail of the facility of direct repurchase at NAV related
prices by the Mutual Fund.
 Transparency:
Investors get regular information on the value of your investment in addition to disclosure on the
specific investments made by the scheme, the proportion invested in each class of assets and the
fund manager's investment strategy and outlook.
 Flexibility:
Through features such as regular investment plans, regular withdrawal plans and dividend
reinvestment plans, one can systematically invest or withdraw funds according to your needs and
convenience.
 Affordability:

Investors individually may lack sufficient funds to invest in high-grade stocks. A Mutual Fund is a
great option because of its large corpus allows even a small investor to take the benefit of its
investment strategy
 Well Regulated:
All Mutual Funds are registered with SEBI and they function within the provisions of strict
regulations designed to protect the interests of investors. The operations of the Mutual Funds are
regulated and monitored by SECURITIES EXCHANGE BOARD OF INDIA ((SEBI).
LIMITATIONS OF MUTUAL FUND INVESTMENTS:
 No control over cost:
An Investor in mutual fund has no control over the overall costs of investing. He pays an
investment management fee (which is a percentage of his investments) as long as he remains
invested in fund, whether the fund value is rising or declining. He also has to pay fund distribution
costs, which he would not incur in direct investing.
However this only means that there is a cost to obtain the benefits of mutual fund
services. This cost is often less than the cost of direct investing.
 No Tailor Made Portfolios:
Investing through mutual funds means delegation of the decision of portfolio composition to the
fund managers. The very high net worth individuals or large corporate investors may find this to be
a constraint in achieving their objectives.
However, most mutual funds help investors overcome this constraint by offering
large no. of schemes within the same fund.
 Managing A Port Folio Of Funds:
Availability of large no. of funds can actually mean too much choice for the investors. He may
again need advice on how to select a fund to achieve his objectives.
AMFI has taken initiative in this regard by starting a training and certification program for
prospective Mutual Fund Advisors. SEBI has made this certification compulsory for every mutual
fund advisor interested in selling mutual fund.

Taxes:
During a typical year, most actively managed mutual funds sell anywhere from 20 to 70
percent of the securities in their portfolios. If your fund makes a profit on its sales, you will
pay taxes on the income you receive, even if you reinvest the money you made.
 Cost Of Churn:
The portfolio of fund does not remain constant. The extent to which the portfolio changes is
a function of the style of the individual fund manager i.e. whether he is a buy and hold type
of manager or one who aggressively churns the fund. It is also dependent on the volatility of
the fund size i.e. whether the fund constantly receives fresh subscriptions and redemptions.
Such portfolio changes have associated costs of brokerage, custody fees etc. which lowers
the portfolio return commensurately.
LIMITATIONS
 The analysis is based on historical data and thus indicates the past performance, which may not
always be indicative of the future performance.
 Different schemes consider different market indices as their benchmarks, but for the purpose of
uniformity in the study all schemes have to be compared against same benchmark index.
 Sharpe ratio (in its simplest forms) that the relationship between risk and return is linear and
remain linear throughout its entire range. Various research works conducted in this regard
show that the relationship is not as simple as Capital Market theory would suggest. This is an
inherent weakness of capital Asset Pricing Model.
 The time period considered by the study is only three years; a larger period could have ensured
coverage of a full market cycle, thus giving a more real picture of the performance of the
schemes.

CHAPTER 2: REVIEW OF LITERATURE
MUTUAL FUNDS AN OVERVIEW:
A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial
goal. The money thus collected is invested by the fund manager in different types of securities
depending upon the objective of the scheme. These could range from shares to debentures to money
market instruments. The income earned through these investments and the capital appreciations
realized by the scheme are shared by its unit holders in proportion to the number of units owned by
them (pro rata). Thus a Mutual Fund is the most suitable investment for the common man as it offers
an opportunity to invest in a diversified, professionally managed portfolio at a relatively low cost.
Anybody with an investible surplus of as little as a few thousand rupees can invest in Mutual Funds.
Each Mutual Fund scheme has a defined investment objective and strategy.
A mutual fund is the ideal investment vehicle for today’s complex and modern financial scenario.
Markets for equity shares, bonds and other fixed income instruments, real estate, derivatives and other
assets have become mature and information driven. Price changes in these assets are driven by global
events occurring in faraway places. A typical individual is unlikely to have the knowledge, skills,
inclination and time to keep track of events, understand their implications and act speedily. An
individual also finds it difficult to keep track of ownership of his assets, investments, brokerage dues
and bank transactions etc.
A mutual fund is the answer to all these situations. It appoints professionally qualified and experienced
staff that manages each of these functions on a full time basis. The large pool of money collected in
the fund allows it to hire such staff at a very low cost to each investor.
In effect, the mutual fund vehicle exploits economies of scale in all three areas - research, investments
and transaction processing. While the concept of individuals coming together to invest money
collectively is not new, the mutual fund in its present form is a 20th century phenomenon.

In fact, mutual funds gained popularity only after the Second World War. Globally, there are
thousands of firms offering tens of thousands of mutual funds with different investment objectives.
Today, mutual funds collectively manage almost as much as or more money as compared to banks.
A draft offer document is to be prepared at the time of launching the fund. Typically, it pre specifies
the investment objectives of the fund, the risk associated, the costs involved in the process and the
broad rules for entry into and exit from the fund and
other areas of operation. In India, as in most countries, these sponsors need approval from a regulator,
SEBI (Securities exchange Board of India) in our case. SEBI looks at track records of the sponsor and
its financial strength in granting approval to the fund for commencing operations.
A sponsor then hires an asset management company to invest the funds according to the investment
objective. It also hires another entity to be the custodian of the assets of the fund and perhaps a third
one to handle registry work for the unit holders (subscribers) of the fund.
In the Indian context, the sponsors promote the Asset Management Company also, in which it holds a
majority stake. In many cases a sponsor can hold a 100% stake in the Asset Management Company
(AMC). E.g. Birla Global Finance is the sponsor of the Birla Sun Life Asset Management Company
Ltd., which has floated different mutual funds schemes and also acts as an asset manager for the funds
collected under the schemes.

HISTORY OF MUTUAL FUNDS IN INDIA:
The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the
initiative of the Government of India and Reserve Bank the. The history of mutual funds in India can
be broadly divided into four distinct phases.
FIRST PHASE: 1964-1987:
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the
Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve
Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India
(IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched
by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under
management.
SECOND PHASE: 1987-1993 (ENTRY OF PUBLIC SECTOR FUNDS)
1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life
Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual
Fund was the first non- UTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund
(Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of
India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989
while GIC had set up its mutual fund in December 1990. At the end of 1993, the mutual fund industry
had assets under management of Rs.47,004 crores.
THIRD PHASE: 1993-2003(ENTRY OF PRIVATE SECTOR FUNDS)
With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry,
giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first
Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be
registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was
the first private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised
Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund)
Regulations 1996.
The number of mutual fund houses went on increasing, with many foreign mutual funds setting up
funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of
January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of
India with Rs.44,541 crores of assets under management was way ahead of other mutual funds.
FOURTH PHASE: (SINCE FEBRUARY 2003)
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into
two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under
management of Rs.29,835 crores as at the end of January 2003, representing broadly, the assets of US
64 scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust of
India, functioning under an administrator and under the rules framed by Government of India and does
not come under the purview of the Mutual Fund Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with
SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI
which had in March 2000 more than Rs.76,000 crores of assets under management and with the setting
up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers
taking place among different private sector funds, the mutual fund industry has entered its current
phase of consolidation and growth. As at the end of March, 2006, there were 29 funds, which managed
assets of Rs.153108 crores under 421 schemes.
FUTURE SCENARIO:
The asset base will continue to grow at an annual rate of about 30 to 35 % over the next
few years as investor’s shift their assets from banks and other traditional avenues. Some
of the older public and private sector players will either close shop or be taken over.
Out of ten public sector players five will sell out, close down or merge with stronger

players in three to four years. In the private sector this trend has already
Started with two mergers and one takeover. Here too some of them will down their
shutters in the near future to come.
But this does not mean there is no room for other players. The market will witness a
flurry of new players entering the arena. There will be a large number of offers from
various asset management companies in the time to come. Some big names like Fidelity, Principal,
Old Mutual etc. are looking at Indian market seriously. One important reason for it is that most major
players already have presence here and hence
these big names would hardly like to get left behind. The mutual fund industry is awaiting the
introduction of derivatives in India as this would enable it to hedge its risk and this in turn would be
reflected in its Net Asset Value (NAV).
SEBI is working out the norms for enabling the existing mutual fund schemes to trade in derivatives.
Importantly, many market players have called on the Regulator to initiate the process immediately, so
that the mutual funds can implement the changes that are required to trade in Derivatives.
RECENT TRENDS IN THE MUTUAL FUNDS INDUSTRY:
The most important trend in the mutual fund industry is the aggressive expansion of the foreign owned
mutual fund companies and the decline of the companies floated by nationalized banks and smaller
private sector players.
Many nationalized banks got into the mutual fund business in the early nineties and got off to a good
start due to the stock market boom prevailing then. These banks did not really understand the mutual
fund business and they just viewed it as another kind of banking activity.
Few hired specialized staff and generally chose to transfer staff from the parent organizations. The
performance of most of the schemes floated by these funds was not good. Some schemes had offered
guaranteed returns and their parent organizations had to bail out these AMCs by paying large amounts
of money as the difference between the guaranteed and actual returns.

The service levels were also very bad. Most of these AMCs have not been able to retain staff, float
new schemes etc. and it is doubtful whether, barring a few exceptions, they have serious plans of
continuing the activity in a major way. The experience of some of the AMCs floated by private sector
Indian companies was also very similar. They quickly realized that the AMC business is a business,
which makes money in the long term and requires deep-pocketed support in the intermediate years.
Some have sold out to foreign owned companies, some have merged with others and there is general
restructuring going on.
The foreign owned companies have deep pockets and have come in here with the expectation of a long
haul. They can be credited with introducing many new practices such as new product innovation, sharp
improvement in service standards and disclosure, usage of technology, broker education and support
etc. In fact, they have forced the industry to upgrade itself and service levels of organizations like UTI
have improved dramatically in the last few years in response to the competition provided by these.
TYPES OF MUTUAL FUNDS:
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 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. It is easier to think of mutual funds in categories, mentioned
below.

TYPES OF MUTUAL
FUNDS
BY STRUCTURE
Open - Ended
Schemes
Close - Ended
Schemes
Interval Schemes
BY NATURE
Equity Fund
Debt Funds
Balanced Funds
BY INVESTMENT
OBJECTIVE
Growth Schemes
Income Schemes
Balanced
Schemes
Money Market
Schemes
OTHER SCHEMES
Tax Saving
Schemes
Index Schemes
Sector Specific
Schemes
TYPES OF MUTUAL FUNDS:
 BASED ON THEIR STRUCTURE;
o Open Ended Schemes
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 schemes is liquidity.
o Close Ended Schemes:
A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years.
The fund is open for subscription only during a specified period. Investors can invest in the scheme
at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on
the stock exchanges where they are listed. In order to provide an exit route to the investors, some
close-ended funds give an option of selling back the units to the Mutual Fund through periodic

repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit
routes is provided to the investor.
o 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 be open for sale or redemption
during pre-determined intervals at NAV related prices.
 BY NATURE:
o Equity Fund:
These funds invest a maximum part of their corpus into equities holdings. The structure of the
fund may vary different for different schemes and the fund manager’s outlook on different stocks. The
Equity Funds are sub-classified depending upon their investment objective, as follows:
 Diversified Equity Funds
 Mid-Cap Funds
 Sector Specific Funds
 Tax Savings Funds (ELSS)
Equity investments are meant for a longer time horizon, thus Equity funds rank high on the risk-return
matrix.
 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.

 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 six months. 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 investment horizon 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.
 Balanced Funds:
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-defined investment 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.
 BY INVESTMENT OBJECTIVE:
o Growth Schemes:
The aim of growth funds is to provide capital appreciation over the medium to longterm.

Such schemes normally invest a majority of their corpus in equities. It has been proven that returns
from stocks, have outperformed most other kind of investments held over the long term. Growth
schemes are ideal for investors having a long-term outlook seeking growth over a period of time.
o Income Schemes:
The aim of income funds is to provide regular and steady income to investors
Such schemes generally invest in fixed income securities such as bonds, corporate debentures and
Government securities. Income Funds are ideal for capital stability and regular income.
o Balanced Schemes:
The aim of balanced funds is to provide both growth and regular income. Such schemes
periodically distribute a part of their earning and invest both in equities and fixed income securities
in the proportion indicated in their offer documents. In a rising stock market, the NAV of these
schemes may not normally keep pace, or fall equally when the market falls. These are ideal for
investors looking for a combination of income and moderate growth.
o 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.
Load Funds:
A Load Fund is one that charges a commission for entry or exit. That is, each time you buy or sell
units in the fund, a commission will be payable. Typically entry and exit loads range from 1% to
2%. It could be worth paying the load, if the fund has a good performance history.
No- Load Funds:

A No-Load Fund is one that does not charge a commission for entry or exit. That is, no
commission is payable on purchase or sale of units in the fund. The advantage of a no load fund is
that the entire corpus is put to work.
 Other Schemes:
Tax Saving Schemes:
Tax-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 Schemes:
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 the total 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 Specific Schemes:
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 more risky compared
to diversified funds. Investors need to keep a watch on the performance of those sectors/industries and
must exit at an appropriate time.
Special Schemes:
o Industry Specific schemes:

Industry Specific Schemes invest only in the industries specified in the offer document. The
investment of these funds is limited to specific industries like InfoTech, FMCG, and
Pharmaceuticals etc
o Index Schemes:
Index Funds attempt to replicate the performance of a particular index such as the BSE Sensex or
the NSE 50.
o Sectorial Schemes:
Sectoral Funds are those, which invest exclusively in a specified industry or a group of industries
or various segments such as 'A' Group shares or initial public offerings.
o Commodities Funds:
Commodities funds specialize in investing in different commodities directly or through
commodities future contracts. Specialized funds may invest in a single commodity or a commodity
group such as edible oil or rains, while diversified commodity funds will spread their assets over
many commodities
CONCEPTUAL BACKGROUND OF THE STUDY:
With a plethora of schemes to choose from, the retail investor faces problems in selecting funds.
Factors such as investment strategy and management style are qualitative, but the funds record is an
important indicator too. Though past performance alone can not be indicative of future performance, it
is, frankly, the only quantitative way to judge how good a fund is at present.
Therefore, there is a need to correctly assess the past performance of different mutual funds.
Worldwide, good mutual fund companies over are known by their AMCs and this fame is directly
linked to their superior stock selection skills. For mutual funds to grow, AMCs must be held

accountable for their selection of stocks. In other words there must be some performance indicator that
will reveal the quality of stock selection of various AMCs.
Return alone should not be 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 will
have different levels of risk attached to them. For evaluating the performance of selected Sectoral
Mutual Fund schemes risk-return relation models have been used like:
 The Treynor Measure.
 The Sharpe Measure.
 Jenson Model
 Fama Model
THE TREYNOR MEASURE:
Developed by Jack Treynor, this performance measure evaluates funds on the basis of Treynor's Index.
This Index is a ratio of return generated by the fund over and above risk free rate of return (generally
taken to be the return on securities backed by the government, as there is no credit risk associated),
during a given period and systematic risk associated with it (beta). Symbolically, it can be represented
as:
Treynor's Index (Ti) = (Ri - Rf)/Bi.
Where, Ri represents return on fund, Rf is risk free rate of return and Bi is beta of the fund.
THE SHARPE MEASURE:
In this model, performance of a fund is evaluated on the basis of Sharpe Ratio, which is a ratio of
returns generated by the fund over and above risk free rate of return and the total 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:

Sharpe Index (Si) = (Ri - Rf)/Si
Where, Si is standard deviation of the fund.
COMPARISION OF SHARPE AND TREYNOR:
Sharpe and Treynor measures are similar in a way, since they both divide the risk premium by a
numerical risk measure. The total risk is appropriate when we are evaluating the risk return
relationship for well-diversified portfolios. On the other hand, the systematic risk is the relevant
measure of risk when we are evaluating less than fully diversified portfolios or individual stocks. For a
well-diversified portfolio the total risk is equal to systematic risk. Rankings based on total risk (Sharpe
measure) and systematic risk (Treynor measure) should be identical for a well-diversified portfolio, as
the total risk is reduced to systematic risk. Therefore, a poorly diversified fund that ranks higher on
Treynor measure, compared with another fund that is highly diversified, will rank lower on Sharpe
Measure.
JENSON’S MODEL
Jenson's model proposes another risk adjusted performance measure. This measure was developed by
Michael Jenson and is sometimes referred to as the Differential Return Method. This measure involves
evaluation of the returns that the fund has generated vs. the returns actually expected out of the fund
given the level of its systematic risk. The surplus between the two returns is called Alpha, which
measures the performance of a fund compared with the actual returns over the period. Required return
of a fund at a given level of risk (Ri) can be calculated as:-
Ri = Rf + Bi (Rm - Rf)
Where, Rm is average market return during the given period. After calculating it, alpha can be
obtained by subtracting required return from the actual return of the fund. Higher alpha represents
superior performance of the fund and vice versa.
Limitation of this model is that it considers only systematic risk not the entire risk associated with the
fund and an ordinary investor can not mitigate unsystematic risk, as his knowledge of market is
primitive.

NET ASSET VALUE (NAV):
Since each owner is a part owner of a mutual fund, it is necessary to establish the value of his
part. In other words, each share or unit that an investor holds needs to be assigned a value. Since the
units held by investor evidence the ownership of the fund’s assets, the value of the total assets of the
fund when divided by the total number of units issued by the mutual fund gives us the value of one
unit. This is generally called the Net Asset Value (NAV) of one unit or one share. The value of an
investor’s part ownership is thus determined by the NAV of the number of units held.
Calculation of NAV:
Let us see an example. If the value of a fund’s assets stands at Rs. 100 and it has 10 investors who
have bought 10 units each, the total numbers of units issued are 100, and the value of one unit is
Rs. 10.00 (1000/100). If a single investor in fact owns 3 units, the value of his ownership of the
fund will be Rs. 30.00(1000/100*3). Note that the value of the fund’s investments will keep
fluctuating with the market-price movements, causing the Net Asset Value also to fluctuate. For
example, if the value of our fund’s asset increased from Rs. 1000 to 1200, the value of our
investors holding of 3 units will now be (1200/100*3) Rs. 36. The investment value can go up or
down, depending on the markets value of the fund’s assets.
Risk v/s Return:

Mutual
Fund Type
Objective Risk Investment
Portfolio
Who should
invest
Investment
Horizon

Snapshot of Mutual Fund Schemes.
Money
market
Liquidity +
Moderate
Income +
Reservation of
Capital
Negligible Treasury Bills,
Certificate of
Deposits,
Commercial
Papers, Call
Money
Those who
park their
funds in
current
accounts or
short-term
bank
deposits
2 days - 3
weeks
Short Term
Funds
Liquidity +
Moderate
Income
Little
Interest Rate
Call Money,
Commercial
Papers,
Treasury Bills,
CDs, Shortterm
Government
securities.
Those with
surplus
short-term
funds
3 weeks to 3
months
Bond Funds Regular Income Credit Risk
and interest
rate risk
Predominantly
Debentures,
Government
securities,
Corporate
Bonds
Salaried &
conservative
investors
More than 9 -
12
months
Guilt Funds Security &
Income
Interest Rate
Risk
Government
securities
Salaried &
conservative
investors
12 months &
more
Equity
Funds
Long-term
Capital
Appreciation
High Risk Stocks Aggressive
investors
with long
term out
look.
3 years plus
Index Funds To generate
returns that are
commensurate
NAV varies
with index
performance
Portfolio
indices like
BSE, NIFTY
Aggressive
investors.
3 years plus
Balanced
Funds
Growth &
Regular
Income
Capital
Market Risk
and Interest
RateRi
Balanced ratio
of equity and
debt funds
Moderate &
Aggressive
2 years plus

MARKETING STRATEGIES FOR MUTUAL FUNDS:
 Business Accounts:
 The most common sales and marketing strategies for mutual funds is to sign-up companies as a
preferred option for their retirement plans. This provides a simple way to sign-up numerous
accounts with one master contract. To market to these firms, sales people target human resource
professionals. Marketing occurs through traditional business-to-business marketing techniques
including conferences, niche advertising and professional organizations. For business accounts,
fund representatives will stress ease of use and compatibility with the company's present systems.
 Consumer Marketing:
 Consumer marketing of mutual funds is similar to the way other financial products are sold. Marketers
emphasize safety, reliability and performance. In addition, they may provide information on their
diversity of choices, ease of use and low costs. Marketers try to access all segments of the population.
They use broad marketing platforms such as television, newspapers and the internet. Marketers
especially focus on financially oriented media such as CNBC television and Business week magazine.
 Performance:
 Mutual funds must be very careful about how they market their performance, as this is heavily
regulated. Mutual funds must market their short, medium and long-term average returns to give the
prospective investor a good idea of the actual performance. For example, most funds did very well
during the housing boom. However, if the bear market that followed is included, performance looks
much more average. Funds may also have had different managers with different performance records
working on the same funds, making it hard to judge them.
 Marketing Fees:
 Mutual funds must be very clear about their fees and report them in all of their marketing materials.
The main types of fees include the sales fee (load) and the management fee. The load is an upfront
charge that a mutual fund charges as soon as the investment is made. The management fee is a
percentage of assets each year, usually 1 to 2 percent.

WORKING OF A MUTUAL FUNDS:
The mutual fund collects money directly or through brokers from investors. The money is
invested in various instruments depending on the objective of the scheme. The income generated by
selling securities or capital appreciation of these securities is passed on to the investors in proportion
to their investment in the scheme. The investments are divided into units and the value of the units will
be reflected in Net Asset Value or NAV of the unit. NAV is the market value of the assets of the
scheme minus its liabilities. The per unit NAV is the net asset value of the scheme divided by the
number of units outstanding on the valuation date. Mutual fund companies provide daily net asset
value of their schemes to their investors. NAV is important, as it will determine the price at which you
buy or redeem the units of a scheme. Depending on the load structure of the scheme, you have to pay
entry or exit load.

MAJOR MUTUAL FUNDS COMPANIES IN INDIA:
ABN AMRO Mutual Fund Reliance Mutual Fund
 Birla Sun Life Mutual Fund Standard Chartered Mutual Fund
 Bank of Baroda Mutual Fund Franklin Templeton India Mutual Fund
 HDFC Mutual Fund Morgan Stanley Mutual Fund India
 HSBC Mutual Fund Escorts Mutual Fund
 ING Vysya Mutual Fund Alliance Capital Mutual Fund
 Prudential ICICI Mutual Fund Benchmark Mutual Fund
 State Bank of India Mutual Fund Canbank Mutual Fund
 Tata Mutual Fund Chola Mutual Fund
 Unit Trust of India Mutual Fund LIC Mutual Fund

14%
20%
9%
9%
4%
9%
4%
4%
3%
3%
4%
3%
14%
Market Share '09
Reliance Mutual Fund
HDFC Mutual Fund
Birla Sun Life Mutual Fund
ICICI Prudential Mutual Fund
Kotak Mahindra Mutual Fund
UTI Mutual Fund
LIC Mutual Fund
SBI Mutual Fund
IDFC Mutual Fund
TATA Mutual Fund
Franklin templeton Mutual Fund
DSP Black Mutual Fund

CHAPTER 3: COMPANY PROFILE:
INDIA INFOLINE LIMITED:
ABOUT:
India Infoline is a one-stop financial services shop, most respected for quality of its information,
personalized service and cutting-edge technology.
VISION:
Our vision is to be the most respected company in the financial services space.
INDIA INFOLINE GROUP:
The India Infoline group, comprising the holding company, India Infoline Limited and its wholly-
owned subsidiaries, include the entire financial services space with offerings ranging from Equity
research, Equities and derivatives trading, Commodities trading, Portfolio Management Services,
Mutual Funds, Life Insurance, Fixed deposits, GoI bonds and other small savings instruments to loan
products and Investment banking.
India Infoline also owns and manages the websites www.indiainfoline.com and www.5paisa.com. The
company has a network of over 2100 business locations (branches and sub-brokers) spread across
more than 450 cities and towns. The group caters to approximately a million customers.
Founded in 1995 by Mr. Nirmal Jain (Chairman and Managing Director) as an independent business
research and information provider, the company gradually evolved into a one-stop financial services
solutions provider.
India Infoline received registration for a housing finance company from the National Housing Bank
and received the ‘Fastest growing Equity Broking House - Large firms’ in India by Dun & Bradstreet
in 2009. It also received the Insurance broking license from IRDA; received the venture capital

license; received in principle approval to sponsor a mutual fund; received ‘Best broker- India’ award
from Finance Asia; ‘Most Improved Brokerage- India’ award from Asia money.
COMPANY STRUCTURE
India Infoline Limited is listed on both the leading stock exchanges in India, viz. the Stock Exchange,
Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges.
It is engaged in the businesses of Equities broking, Wealth Advisory Services and Portfolio
Management Services. It offers broking services in the Cash and Derivatives segments of the NSE as
well as the Cash segment of the BSE. It is registered with NSDL as well as CDSL as a depository
participant, providing a one-stop solution for clients trading in the equities market. It has recently
launched its Investment banking and Institutional Broking business.
A SEBI authorized Portfolio Manager; it offers Portfolio Management Services to clients. These
services are offered to clients as different schemes, which are based on differing investment strategies
made to reflect the varied risk-return preferences of clients.
INDIA INFOLINE MEDIA AND RESEARCH SERVICES LIMITED:

The services represent a strong support that drives the broking, commodities, mutual fund and
portfolio management services businesses. It undertakes equities research which is acknowledged by
none other than Forbes as 'Best of the Web' and '…a must read for investors in Asia'. India Infoline's
research is available not just over the internet but also on international wire services like Bloomberg
(Code: IILL), Thomson First Call and Internet Securities where India Infoline is amongst the most
read Indian brokers.
INDIA INFOLINE COMMODITIES LIMITED:
India Infoline Commodities Pvt Limited is engaged in the business of commodities broking. Their
experience in securities broking empowered them with the requisite skills and technologies to allow
them to offer commodities broking as a contra-cyclical alternative to equities broking.
INDIA INFOLINE MARKETING AND SERVICES:
India Infoline Marketing and Services Limited is the holding company of India Infoline Insurance
Services Limited and India Infoline Insurance Brokers Limited.
 India Infoline Insurance Services Limited is a registered Corporate Agent with the Insurance
Regulatory and Development Authority (IRDA). It is the largest Corporate Agent for ICICI
Prudential Life Insurance Co Limited, which is India's largest private Life Insurance Company.
India Infoline was the first corporate agent to get licensed by IRDA in early 2001.
 India Infoline Insurance Brokers Limited India Infoline Insurance Brokers Limited is a newly
formed subsidiary which will carry out the business of Insurance broking.
INDIA INFOLINE INVESTMENT SERVICES LIMITED:
Consolidated shareholdings of all the subsidiary companies engaged in loans and financing activities
under one subsidiary. Recently, Orient Global, a Singapore-based investment institution invested USD
76.7 million for a 22.5% stake in India Infoline Investment Services.

India Infoline Investment Services Private Limited consists of the following step-down
subsidiaries.
 India Infoline Distribution Company Limited (distribution of retail loan products)
 Moneyline Credit Limited (consumer finance)
 India Infoline Housing Finance Limited (housing finance)
INDIA INFOLINE MANAGEMENT:
THE MANAGEMENT TEAM:
 Mr. Nirmal Jain, Chairman & Managing Director
Nirmal Jain, MBA (IIM, Ahmadabad) and a Chartered and Cost Accountant, founded India’s
leading financial services company India Infoline Ltd. in 1995, providing globally acclaimed
financial services in equities and commodities broking, life insurance and mutual funds
distribution, among others.
 Mr. R Venkataraman, Executive Director
R Venkataraman, co-promoter and Executive Director of India Infoline Ltd., is a B. Tech (Electronics
and Electrical Communications Engineering, IIT Kharagpur) and an MBA (IIM Bangalore). He joined
the India Infoline board in July 1999.
BOARD OF DIRECTORS:
Apart from Nirmal Jain and R Venkataraman, the Board of Directors of India Infoline Ltd. comprises:

 Mr. Nilesh Vikamsey, Independent Director
Mr. Vikamsey, Board member since February 2005 - a practicing Chartered Accountant and
partner (Khimji Kunverji & Co., Chartered Accountants), a member firm of HLB International,
headed the audit department till 1990 and thereafter also handles financial services, consultancy,
investigations, mergers and acquisitions, valuations etc
 Mr Sat Pal Khattar, Non Executive Director
Mr Sat Pal Khattar, - Board member since April 2001 - Presidential Council of Minority Rights
member, Chairman of the Board of Trustee of Singapore Business Federation, is also a life trustee
of SINDA, a non profit body, helping the under-privileged Indians in Singapore. He joined the
India Infoline board in April 2001.
 Mr Arun K. Purvar, Independent Director
Mr A.K Purwar – Board member since march 2008- completed his masters degree in commerce
Allahabad University in 1966 and a Diploma in Business Administration in 1967.
PRODUCTS AND SERVICES:
 Equities:
India Infoline provided the prospect of researched investing to its clients, which was hitherto restricted
only to the institutions. Research for the retail investor did not exist prior to India Infoline. India

Infoline leveraged technology to bring the convenience of trading to the investor’s location of
preference (residence or office) through computerized access. India Infoline made it possible for
clients to view transaction costs and ledger updates in real time. The Company is among the few
financial intermediaries in India to offer a complement of online and offline broking. The Companies
network of branches also allows customers to place orders on phone or visit our branches for trading.
 Commodities:
India Infoline’s extension into commodities trading reconciles its strategic intent to emerge as a one
stop solutions financial intermediary. Its experience in securities broking has empowered it with
requisite skills and technologies. The Companies commodities business provides a contra-cyclical
alternative to equities broking. The Company was among the first to offer the facility of commodities
trading in India’s young commodities market (the MCX commenced operations in 2003). Average
monthly turnover on the commodity exchanges increased from Rs 0.34 bn to Rs 20.02 bn.
 Insurance:
An entry into this segment helped complete the client's product basket; concurrently, it graduated the
Company into a one stop retail financial solutions provider. To ensure maximum reach to customers
across India, it has employed a multi pronged approach and reaches out to customers via our Network,
Direct and Affiliate channels. India Infoline was the first corporate in India to get the agency license in
early 2001.
 Invest Online
India Infoline has made investing in Mutual funds and primary market so effortless. Only registration
is needed. No paperwork no queues and No registration charges. India Infoline offers a host of mutual
fund choices under one roof, backed by in-depth research and advice from research house and tools
configured as investor friendly.
 Asset Management
India Infoline is a leading pan-India mutual fund distribution house associated with leading asset
management companies. It operates primarily in the retail segment leveraging its existing distribution
network to reach prospective clients. It has received the in-principle approval to set up a mutual fund.

 Portfolio Management
IIFL Portfolio Management Service is a product wherein an equity investment portfolio is created to
suit the investment objectives of a client. India Infoline invests the client’s resources into stocks from
different sectors, depending on client’s risk-return profile. investors who cannot afford to give time or
don't have that expertise for day-to-day management of their equity portfolio.
CHAPTER 4: DATA ANALYSIS AND INERPRETATION
SECTORIAL MUTUAL FUNDS CONSIDERED:
 Infrastructure Sector: Franklin Build India Fund.
 Health Care Sector: Reliance Pharma Fund.
 Banking and Finance: ICICI Pru Banking And Financial Services Fund.
 Auto Sector: UTI Transportation and Logistics.
 Technology Sector: ICICI Pru Tech Fund.

 INFRASTRUCTURE SECTOR:
Franklin Build India Fund:
Govt of India has been focusing on developing Infrastructure in India for over a year now. This is
creating enormous opportunities for companies in India. One of the fund which is trying to tap such
stocks is Franklin Build India Fund (FBIF).
FBIF aims to invest in companies which are either directly or indirectly in infrastructure related
activities.
The scheme has generated 20% annualized returns in last 5 years and 43% returns in last 1 year. Its
assets under management are Rs 487 crore. Crisil rates this fund as Rank-1.
High risk appetite investors who are willing to invest for a time frame of 3 to 5 years can consider
investing in this scheme through SIP.
RETURNS: (NAV as on 09aug.2017)
Period Returns (%) Rank #
1 mth 1.6 22
3 mth 2.4 21
6 mth 10.5 41
1 year 20.2 35
2 year 11.8 23
3 year 22.2 3
5 year 27.1 1
`TOP HOLDINGS: (Jul 31,17)

Equity Sector Value
(Rs cr)
Asset %
SBI Banking/Finance 100.00 9.79
HDFC Bank Banking/Finance 93.68 9.18
ICICI Bank Banking/Finance 89.87 8.80
Axis Bank Banking/Finance 68.87 6.75
Bharti Airtel Telecom 62.84 6.16
Whirlpool Cons Durable 38.05 3.73
Tata Motors (D) Automotive 37.12 3.64
Idea Cellular Telecom 36.98 3.62
IOC Oil & Gas 34.93 3.42
SECTOR ALLOCATION (Jul 31, 17)
Sector % 1-Year
High Low
Banking/Finance 39.06 0.00 0.00
Telecom 9.78 0.00 0.00
Oil & Gas 9.06 0.00 0.00
Automotive 7.66 0.00 0.00
Engineering 6.03 0.00 0.00
Cons Durable 5.27 0.00 0.00
ASSET ALOCATION: (Jul 31, 17)
Equity 94.24
Others 0.00
Debt 0.00
Mutual Funds N.A
Money Market 0.00
Cash / Call 5.75
SCHME SNAPSHOT:
Fund Type Open-Ended
Investment Plan Growth
Launch date Aug 10, 2009
Benchmark NIFTY 500
Asset Size (Rs cr) 621.13 (Mar-31-2017)

Minimum Investment Rs.5000
Last Dividend N.A.
Bonus N.A.
Fund Manager Anand Radhakrishnan / Roshi Jai
Notes N.A
HEALTHCARE SECTOR:
Realiance Pharma Fund:
Pharma and healthcare sector has seen healthy growth in the last few years and expectd to grow in
future too. Reliance Pharma Fund (RPF) objective is to generate consistent returns by investing in
equity and fixed income securities of pharma and healthcare companies. RPF has generated 22%
annualized returns in last 5 years and 39% returns in last 1 year. Its assets under management are Rs
1,244 crore. High risk appetite investors who are willing to invest for a time frame of 3 to 5 years can
consider investing in this scheme through SIP.
RETURNS (NAV as on 09 Aug, 2017)
Period Returns(%) Rank#
1 MNTH -5.7 8
3 MNTH -5.1 4
6 MNTH -9.2 6
1 YEAR -12.7 3
2 YEAR -8.3 4
3 YEAR 6.8 4
5 YEAR 14.7 2
ASSET ALLOCATION: (June 30,17)
EQUITY 97.28
OTHERS 0.121

MUTUAL FUNDS N.A
MONEY MARKET 1.50
CASH/CALL 13.11
TOP HOLDINGS: (June 30,17)
Equity Sector Value
(Rs cr)
Asset %
Sun Pharma Pharmaceuticals 124.98 10.41
Aurobindo Pharm Pharmaceuticals 123.78 10.31
Dr Reddys Labs Pharmaceuticals 117.66 9.80
Divis Labs Pharmaceuticals 114.18 9.51
Abbott India Pharmaceuticals 108.30 9.02
Sanofi India Pharmaceuticals 98.21 8.18
Cipla Pharmaceuticals 93.17 7.76
Lupin Pharmaceuticals 82.24 6.85
Thyrocare Techn Services 63.39 5.28
Cadila Health Pharmaceuticals 55.59 4.63
SCHEME SNAPSHOT:
Launch date May 26, 2004
Benchmark S&P BSE HEALTHCARE

Asset Size (Rs cr) 1,321.80 (Mar-31-2017)
Last Dividend N.A.
Bonus N.A.
Fund Manager Sailesh Rajbhan
Notes N.A
BANKING AND FINANCE SECTOR:
ICCI Pru Banking and Financial Services Fund:
Banking and financial services sector is every green. With the expectation that infrastructure sector
would benefit in coming years, banking sector is expected to grow with addition of infra sector
opportunities. ICCI Pru Banking and Financial Services Fund (IPBF) objective is to invest in equity
and equity related instruments in banking, financial services and NBFC’s that are forming part of
financial services industry. It has has generated 18% annualized returns in last 5 years and 28% returns
in last 1 year. Its assets under management are Rs 886 crore. High risk appetite investors who are
willing to invest for a time frame of 3 to 5 years can consider investing in this schemethrough SIP.
RETURNS (NAV as on 9Aug,2017)
1 mth 4.0 13
3 mth 7.2 16
6 mth 22.7 10
1 year 35.6 5
2 year 22.5 5
3 year 26.2 4
5 year 26.6 1
TOP HOLDINGS (June 30,17)

Equity Sector Value
(Rs cr)
Asset %
SBI Banking/Finance 147.11 9.33
HDFC Bank Banking/Finance 145.53 9.23
ICICI Bank Banking/Finance 142.22 9.02
Yes Bank Banking/Finance 102.64 6.51
Federal Bank Banking/Finance 85.93 5.45
IndusInd Bank Banking/Finance 81.83 5.19
Bajaj Finance Banking/Finance 66.22 4.20
Axis Bank Banking/Finance 59.76 3.79
Bajaj Finserv Banking/Finance 46.20 2.93
ASSET ALLOCATION: (June 30,17)
Equity 87.84
Others 5.60
Debt 0.85
Mutual Funds N.A
Money Market 4.72
Cash / Call 1.00
SCHEME SNAPSHOT:
Launch date Aug 07, 2008
Benchmark S&P BSE BANKEX
Asset Size (Rs cr) 1,266.70 (Mar-31-2017)
Minimum
Investment
Rs.5000
Last Dividend N.A.
Bonus N.A.
Fund Manager Vinay Sharma
Notes N.A

AUTO SECTOR:
UTI Transportation & Logistics (UTITL):
UTI Transportation & Logistics (UTITL) aims to invest in stocks which are engaged in providing
transportation services, design, manufacture-distribution-sale of transportation equipment and
companies in logistics sector. It has has generated 27% annualized returns in last 5 years and 45%
returns in last 1 year. Its assets under management are Rs 542 crore. High risk appetite investors who
are willing to invest for a time frame of 3 to 5 years can consider investing in such schemes through
SIP.
1 mth 0.2 10
3 mth 5.1 6
6 mth 12.6 8
1 year 17.5 13
2 year 9.2 10
3 year 21.4 3
5 year 31.5 1
Equity Sector Value
(Rs cr)
Asset %
Maruti Suzuki Automotive 115.91 11.95
Tata Motors Automotive 87.39 9.01
Hero Motocorp Automotive 64.89 6.69
M&M Automotive 64.41 6.64
Eicher Motors Automotive 53.25 5.49
Adani Ports Engineering 46.46 4.79
MRF Automotive 37.25 3.84
Bajaj Auto Automotive 33.95 3.50
Container Corp Services 29.39 3.03
Escorts Automotive 27.06 2.79

ASSET ALLOCATION (June 30,17)
Equity 93.84
Others 0.00
Debt 0.34
Mutual Funds N.A
Money Market 0.00
Cash / Call 5.79
SCHEME SNAPSHOT
Launch date Feb 04, 2004
Benchmark N.A
Last Dividend N.A.
Bonus N.A.
Fund Manager Sachin Trivedi
Notes earlier called UTI Auto Sector Fund, Change in name and in Investment
Objective w.e.f April 11, 2008.

TECHNOLOGY SECTOR:
ICICI Pru Technology Fund (IPTF)
Consumers’ appetite for new technologies has been driving growth in the tech sector for years. This is
providing good opportunities for technology companies. ICICI Pru Technology Fund (IPTF) invests in
equity and equity related securities of technology and technology dependent companies. IPTF has
generated 21% annualized returns in last 5 years and 19% returns in last 1 year. Its Assets Under
Management are Rs 386 Crores. High risk appetite investors who are willing to invest for a time frame
of 3 to 5 years can consider investing in such schemes through SIP.
1 mth 1.6 11
3 mth 0.2 12
6 mth 4.0 8
1 year -0.5 6
2 year -2.1 7
3 year 6.6 7
5 year 32.0 1
Equity Sector Value
(Rs cr)
Asset %
Infosys Technology 51.00 22.70
HCL Tech Technology 31.97 14.23
Wipro Technology 27.66 12.31
L&T Infotech Technology 24.60 10.95
Tech Mahindra Technology 21.77 9.69
Oracle Fin Serv Technology 20.45 9.10
Nucleus Softwar Technology 11.95 5.32
Cyient Technology 11.21 4.99
Mindtree Technology 9.73 4.33

ASSET ALLOCATION (June 30,17)
Equity 93.62
Others 0.00
Debt 0.00
Mutual Funds N.A
Money Market 0.00
Cash / Call 6.38
SCHEME SNAPSHOT:
Investment Plan Dividend
Launch date Jan 28, 2000
Benchmark S&P BSE TECk
Last Dividend Rs.2.70 (Feb-23-2017)
Bonus N.A.
Fund Manager Sankaran Naren / Ashwin Jain
Notes N.A

CHAPTER 5: FINDINGS, SUGGESTIONS AND CONCLUSION:
FINDINGS:
Rate of Return:
Among the funds selected, ICICI Prudential Banking & Financial Services Fund - Retail Plan has
given the maximum rate of return (38.5%) followed by UTI Transportation and Logistics
Fund.(31.5%) Reliance Pharma Fund(14.7%) stood last in the table, in the last five years.
Total Risk (Standard Deviation):
ICICI Prudential Banking & Financial Services fund has the maximum standard deviation of 24.65
while Reliance Pharma Fund has the least standard deviation of 15.61
Treynor & Sharpe Ratio:
ICICI Prudential Banking & Financial Services Fund has the maximum Treynor Ratio of 14.94 while
Reliance Pharma Fund has the least treynor ratio of 13.21
UTI Transportation and Logistics Fund has the maximum Sharpe Ratio of 1.33 whereas
Franklin Build India Fund has the least Sharpe Ratio of 0.64
Systematic Risk (Beta):
Reliance Pharma Fund has the maximum Beta of 0.91 while ICICI Prudential Technology Fund
has the least Beta of 0.77

 SUGGESTIONS & CONCLUSIONS:
 Banking and Auto sectors have fared well in the last one year and it is suggested to invest in these
sectors.
 It is advised to be keep away from Health Care Sector funds.
 Reliance Pharma Fund has the least risk and Banking has the highest risk among the sectors. It
is better to avoid Banking and finance funds for people who want to avoid the risk.
 Investors who expect slow and steady returns are advised to for Infrastructure and Technology
sector.
 Technology Sector has the least beta and investors can invest in this fund.
TIPS FOR MUTUAL FUND INVERSTORS : (SUGGESTIONS)
These are the few exact as regards investment in MF’s taken from the book with “Marketing for the
90’s” given by the Wall Street.
 Check your letter of offer of funds prospectus to guard yourselves against any hidden fees.
 Ensue that the funds track record is the same as that of the current management
 Avoid MF’s that charge exit fees at the back end door.
 Buy the funds with no sale charged loads.(a load is a charge by the fund when investor buys it
is called the entry load or when he sells is called the exit load.)
 If the charge it’s heavy by the M F to discourage the investors from taking short positions in the
funds units because too many investors sell their units at a time then the fund has to sell its
holdings to meet the obligations that yield into vital of the fines overall return. Most short funds
like guilt funds (these are the funds the invest only in government securities and treasury bills thus
the investors have an opportunities to buy risk free securities). These funds yield a better return
than a money market fund. It is good for the investors who desire safety of principal amount).
Money market funds (these funds in views in money market instruments such as treasury bills,

govt. bonds, certificates of bank deposits, commercial deposits). They charge no loads, however
loads are limited by SEBI to 7%.
 Check fund’s performance in bear as well a the bull market.
 Guard fund risk by checking its portfolio for diversification volatility.
.
KEY STEPS FOR NVESTMENT PLANNING:
INSURE YOURSELF BEFORE YOU INVEST:
Insurance is the pre-requisite of all investments the main purpose of insurance is to protect your
current life style after retirement. It acts as a shield against all type of financial risks. Investor has to
realize that insurance is more for safe guarding against risk faced in life rather than being an
investment for profit.
CHOOSE SIMPLE INVESTMENT:
Our daily life is full of complications the day-to-day grind leaves us with little energy to keep track of
our financial investments. That is copy an investor should choose simple & uncomplicated
instruments. Therefore he has to invest the hassle free instruments.
UTILIZE THE POWER OF COMPOUNDING:
Compounding means payment of interest on accumulated interest. Thus money earned by you works
hard & earns more money for you. This implies that not only the principal earns income for you but
interest generated by you also earns income. One important factor is the time period. Longer the time
higher the benefit
INVEST IN INTRUMENTS THAT KEEP YOU AHEAD OF INFLATION:
That silently creeps up from behind & starts eating your hard earned savings even before you realize
the situation. An investor should look at the real return (the rate of return minus the rate of inflation)
while considering an investment. He should invest in instruments, which provide profitable-post-
inflation returns.

REDUCE TAX ON YOUR INVESTMENT:
There are two realities in the life. One is death & the other is tax. It is advisable that investments
should be so planned that least possible tax would be required to be paid. Smart move for the investor
is to save every rupee from tax man.
GO FOR STABLE & REALISTIC RETURNS:
Stability of returns is more important that increased profit. Usually these are associated with high
volatile investment options like equities & even with government securities or gilts as they also run
high market risk. The asset allocation is suggested according to the risk profile of an investor. So
invest in the best option & get the maximum returns.
Data Analysis & Interpretation:
1. Analyzing to according to Age
Interpretation - Here, it is been found that most of the investors i.e,35% of the investors who invest
in Mutual Fund lies in between the age group of 36-40, they are more reluctant as well as experienced
in this field of Mutual Fund.
Then the Second highest age group lies in between the age group of 41-45 (22%), they are also aware of
the benefits in investing in mutual fund. The least interested group is the Youth Generations.
2. Analyzing according to Qualifiaction
3% 12%
35%
22%
18%
10%
Age of Investors
>=30 31-35 36-40 41-45 46-50 >50

Interpretation - Out of my survey of 100 people, 71% of the investors are Graduates and Post
Graduates and 16.67% are Under Graduates and Others, around 12.5%, which may include persons
who have passed their 10th
standard or 12th
standard invests in Mutual Funds.
3. Analyzing according to Occupation
Interpretation - Here it is amazed to see that around 46% of the investment is been invested by the
persons working in Private sectors, according to them investing in Mutual Funds is more safer as well
as more gainer.
Then we find that the businessmen of around 25%gives more preference in investing in mutual funds,
they think that investing in mutual fund is better than investing in shares as well as Post office.
Next we see that the persons working in Government sectors of around 24% only invests in Mutual
Fund.
0
20
40
60
80
No.ofInvestors Qualification
Qualification of Investors
Governmen
t
24%
Private
46%
Business
25%
Others
5%
Investor's Proffession

4. Analyzing according to Monthly Family Income
Interpretation - Here , we find that investors of around 43% with the monthly income of Rs.
>30000 are the most likely to invest in Mutual fund , than any other income group.
5. Analyzing data according to factors seen before investing
Interpretation - As it can be clearly Stated from the above Diagram that investors before
investing, the main criteria that they used to give more Preference is Low Risk. According to them, if
a scheme is low risk, it may or may not give a very good return , but still 56% of the investors choose
low risk as the option while investing in Mutual Funds.
Then we see that 27% of the investors take High return as one of their most important criteria.
According to them, if there is no high return then we should opt for Post office and not mutual fund.
0%
18%
39%
43%
Income of Investors
<=10000 10001-20000 20001-30000 >30000
0
20
40
60
No.ofInvestors
Preference of Investment
Preference of Investment

11% of the investors take trust as one of their important factors
Only 4% of the Investors think liquidity as their most preferable options.
6. Analyzing data according to mode of investment
Interpretation - It can be clearly stated from the above Figure that 82% of the investors like to
invest in SIP, as the investor feels that they are more comfortable to save via SIP than the Long term.
While 18% of the investors find SIP as very burdensome, and they are more reluctant to save in Long
term investment
7. Analyzing data according to objective of investment
18%
82%
Mode of Investment
Long Term Short Term

Interpretation - Here we see that 36% of the investor’s objectives are to preserve the principal
amount, so that it can be used as a savings for the future period.
While 22% investors invest to get derive their current income through investing in Mutual Funds.
While 15% and 17% of the investors invest to get a conservative as well as aggressive growth
8. Analyzing data according to awarness about Mutual Fund
Interpretation -. From The total lot of 100 people, 96 people are actually aware of the fact of
Mutual fund and are regular investors of Mutual Funds.
4 People were there who have just heard the name or rather are just aware of the fact of existence of
the word called Mutual Fund, but doesn’t know anything else about Mutual Funds.
0
20
40
No.ofInvestors
Objective
Objective of Investment
0
50
100
Yes No
No.ofInvestors
Knowledge about Mutual Fund
Awarness about Mutual
Fund

9. Analyzing data according to from where they came to know about Mutual
Fund.
Interpretation - Here from the Line Graph it can be clearly stated that around 46% of the investors
came to know the benefits of Mutual Fund from Financial Advisors. According to the suggestions
given by the financial advisors, people use to choose Mutual Funds Scheme.
Then Secondly,24% and 21% of the people used to know from Advertisement and Peer group
respectively.
Lastly 9% of the investors do invests after being intimated by the Banks about the benefits of Mutual
Funds.
10.Analyzing data according to investors choice of investing in different Mutual
Fund Companies.
0
10
20
30
40
50
No.ofInvestors
Intimated about Mutual Fund
Chart Title
Reliance
45%
SBI
17%
HDFC
15%
UTI
10%
Others
13%
Different Mutual Fund
Company

Interpretation - From this above Pie Chart it can be clearly stated that 45% , 17%of the people like
to invest in large cap companies where return is comparatively less but risk is low thus they invest in
Reliance, SBI respectively.
15%, 10% of the people like to invest in Mutual Fund Companies like HDFC, UTI, etc. where risk is
slightly higher than the above two mentioned companies as well as return is also slightly high
13% of the investors like to invest in the Small Cap’s and Mid Cap’s companies.
FINDINGS
Through this Project the results that was derived are-
 People who lie under the age group of 36-40 have more experience and are more interested in
investing in Mutual Funds.
 There was a lot of lack of awareness or ignorance, that’s why out of 200 people, 120 people have
invested in Mutual Fund and 80 people is unaware of investing in Mutual Funds.
 Generally, People employed in Private sectors and Businessman are more likely to invest in
Mutual Funds, than other people working in other professions.
 Generally investors whose monthly income is above Rs. 20001-30000 are more likely to invest
their income in Mutual Fund, to preserve their savings of at least more than 20%.
 People generally like to save their savings in Mutual Fund, Fixed Deposits and Savings Account.

 Many people came to know about Mutual Fund from Financial Advisors, Advertisement as well as
from their Peer group , and they generally invest in the Mutual Fund by taking advices from their
Legal Advisors.
 Investors generally like to invest in Large Cap Companies like Reliance, SBI, etc. to minimize
their risk.
 The most popular medium of investing in Mutual Fund is through SIP and moreover people like to
invest in Equity Fund though it is a risky game.
 The main Objective of most of the Investors is to preserve their Income.
CONCLUSION:
Mutual Funds now represent perhaps most appropriate investment opportunity for most investors. As
financial markets become more sophisticated and complex, investors need a financial intermediary
who provides the required knowledge and professional expertise on successful investing. As the
investor always try to maximize the returns and minimize the risk. Mutual fund satisfies these
requirements by providing attractive returns with affordable risks. The fund industry has already
overtaken the banking industry, more funds being under mutual fund management than deposited with
banks. With the emergence of tough competition in this sector mutual funds are launching a variety of
schemes which caters to the requirement of the particular class of investors. Risk takers for getting
capital appreciation should invest in growth, equity schemes. Investors who are in need of regular
income should invest in income plans.

In Conclusion:
 A mutual fund brings together a large group of people and invests their aggregated money in
stocks, bonds, and other securities.
 The advantages of mutual funds are professional management, diversification economies of scale,
and wide range of offerings.
 The disadvantages of mutuals are high costs, over-diversification, possible tax consequences,
liquidity concerns, and the inability of management to guarantee a superior return.
 There are many, many types of mutual funds. You can classify funds based on asset class,
investing strategy, region, etc.
 Mutual funds have expenses that can be broken down generally into ongoing fees (represented by
the expense ratio) and transaction fees (loads). Some funds carry no broker fee, known as no-load
mutual funds.
 One of 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.
 Comparing fund returns across a number of metrics is important, such as over time, compared to
its benchmark, and compared to other funds in its peer group.
BIBLIOGRAPHY
ANNEXURE
Mutual Fund: An investment tool that pools in investments made by people and that corpus is
professionally managed by further investing as per the type of fund that’s being operated. The intention
is to float money in the market by owning assets components of many companies at the same meeting
the assurances made to investors. There is no obligation whatsoever for assured returns.
NAV-A cumulative market value of total assets component of its liabilities. It’s actually the measure of
what each shareholder would aquire if the assets of the company are liquidated. No-Load funds - there
is no commission component present to enter and exit of the fund ownership. It’s a full involvement of
the corpus.

ELSS - Equity linked savings scheme is a scheme with a tax rebate allowed as per the Sec 88 in the
Indian income tax act, 1961.It provides the investors with the opportunity to save gains on capital
through investments made in MFs.
Index Funds - An interesting scheme that tries to replicate the behavior of the particular stock index,
that is of interest. The portfolio of the fund would majorly consist of equities listed in that index.
Sector Funds - An MF scheme that has its portfolio chart of companies that belong to a certain sector,
say Oil. This is a high-risk fund, as the performance of that sector would directly reflect in the funds
NAV. So, here we are with the diverse market of Mutual Funds. Each one claiming heir USP. While
MFs certainly are NOT the safest, but they are relatively more safe than the direct involvement in the
equity market, given that fact that majority of the investors are either ill-informed or not informed
about the way the markets move.So what exactly makes MFs the right kind of fund management tool,
espy in a country like India? A country like India or for that matter any developing country has some
basic problems which prevent the information to be available freely and that too in an accessible
fashion, so with a situation like that, a professionally managed agency that would monitor the ups and
downs of the market and chart out the best investment strategies would be the best thing to opt for.With
so many potential investors in India, MFs can go a long way in getting established, plus with added set
of alternatives within the MF schemes each has a scheme ready for the specific needs.Just to have a
better perspective, there are various options available in the form of Equity fund, Debt funds, Balance
funds and components like Money market funds, Index funds and the likes of it. Let’s take a peek at the
important ones.
Equity Funds: The High risk - High return scheme invests in the equity markets, the risk involved is
comparatively higher than but not as high as that of the sector funds that focus investments on specific
sectors. But the higher the risk component, the higher is the return rate. However, there is a variant in this
type of equity based scheme called the ELSS or the Equity Linked Savings Schemes, the offer a tax rebate
under Sec 88 of I-T act, but the investment needs to be locked for at least 3 years! Suitable for risk takers
.The problem is that it reacts faster to the market fluctuations, as the NAV would behave the way market
behaves. Alliance AMC is supposed to have a good equity fund expertise.
Debt Funds: Debt funds invest in the debt component or the fixed income models. So the return is almost
certain and the risk is low. However, the returns are also combatively low compared to the principle

amount. Investments in these kinds of funds range from Govt.Securities to corporate bonds. If you are
looking for short-term safe investment options then the liquid funds in the category is the answer for you.
Several alternatives this category is now available like the income fund, growth fund or any long-term
childcare fund and the likes of it. More diverse Debt funds are, more the chances of substantial returns.
Balance funds - This type of funds are part equity and part debt funds. The pattern investment in balance
funds is usually pre-determined. You have open-ended and closed-ended balance funds, where the funds
can be traded in an open ended case just like equities but based on the Net Asset Value (NAV). The closed-
ended funds are locked and cannot bet traded.SAMPLE QUISTIONAIRE
Name: ................... Age: …………….. Mob. ……………
Ques.1 What is your Qualification?
(a) Under-graduation (b) Graduation (c) Post Graduation (d) Others
Ques.2 What is your Occupation?
(a) Government (b) Private (c) Business (d) Others
Ques.3 What is your monthly family income?
(a) <=10000 (b) 10001-20000 (c) 20001-30000 (d) >30000
Ques.4 Do you have any idea about Mutual Fund?
(a) Yes (b) No
Ques.5 From where you came to know about Mutual Fund?
(a) Advertisement (b) Peer Group (c) Banks (d) Financial Advisors
Ques.6 Where you will prefer to invest?
(a) Savings (b) FD (c) Insurance (d) Mutual Fund (e)PO (f) Shares (g) Gold (h) Real Estate
Ques.7 Which is your preference while investing?
(a) Low Return (b) High Risk (c) Liquidity (d) Trust
Ques.8 Which Mutual Fund Company you will prefer to invest?
(a) Reliance (b) SBI (c) UTI (d) HDFC (e) Others
Ques.9 Which mode of investment will you prefer?
(a) Long Term (b) Short Term
Ques.10 Objective of investment?
(a) Preservation (b) Current Income (c) Conservative Growth (d) Aggressive Growth

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