A SUMMER TRAINING PROJECT REPORT

ON

“COMPARATIVE ANALYSIS OF AXIS MUTUAL FUND

WITH HDFC MUTUAL FUND,BIRLA SUN LIFE MUTUAL
FUND AND INVESTORS PERCEPTION TOWARDS
INVESTMENT IN AXIS MUTUAL FUND”

Submitted in partial fulfilment for

MASTER OF BUSINESS ADMIMISTRATION

Programme of

MM INSTITUTE OF MANAGEMENT
MMU-MULLANA (AMBALA)
*Batch:-2009-2011*

Submitted by Under Guidance

SHANKY “Mr. VIJAY KUMAR”

ROLL NO: 12097138 BRANCH MANAGER

MBA BATCH: 2009-2011 AXIS BANK LTD. (KAITHAL)

MM INSTITUTE OF MANAGEMENT
MAHARISHI MARKANDESHWAR UNIVERSITY
MULLANA-(AMBALA)

PREFACE
MBA is a stepping-stone to the management carrier and to develop good
manager. It is necessary that the theoretical must be supplemented with
exposure to the real environment. Theoretical knowledge just provides the base
and it’s not sufficient to produce a good manager that’s why practical
knowledge is needed.

Therefore the research product is an essential requirement for the student of

MBA. This research project not only helps the student to utilize his skills
properly learn field realities but also provides a chance to the organization to
find out talent among the budding managers in the very beginning.

Investing money where the risk is less has always been risky to decide. The first
factor, which an investor would like to see before investing, is risk factor.
Diversification of risk gave birth to the phenomenon called Mutual Fund.

The Mutual Fund Industry is in the growing stage in India, which is evident
from the flood of mutual funds offered by the Banks, Financial Institutes &
Private Financial Companies.

In accordance with the requirement of MBA course I have summer training

Research project on the topic “COMPARATIVE ANALYSIS OF AXIS
MUTUAL FUND WITH HDFC MUTUAL FUND, BIRLA SUN LIFE
MUTUAL FUND AND INVESTORS PERCEPTION TOWARDS
INVESTMENT IN AXIS MUTUAL FUND”. While preparing this project
report, I got an opportunity to learn many valuable things.

CERTIFICATE FROM GUIDE

This is to certify that the project topic “COMPARATIVE
ANALYSIS OF AXIS MUTUAL FUND WITH HDFC
MUTUAL FUND,BIRLA SUN LIFE MUTUAL FUND
AND INVESTORS PERCEPTION TOWARDS
INVESTMENT IN AXIS MUTUAL FUND” is prepared
and completed successfully by Mr. SHANKY (Roll No.
12097138) under my guidance. The project has been
completed to my satisfaction and I wish him all the best in
his future endeavour.

“Mr. VIJAY KUMAR” (Project Guide)

BRANCH MANAGER, AXIS BANK LTD.
KAITHAL (HARYANA)

ACKNOWLEDGEMENT
 “EXPRESSION OF FEELINGS BY WORDS MAKES THEM
LESS SIGNIFICANT WHEN IT COMES TO MAKE
STATEMENT OF GRATITUDE”

Summer training is one of the most vital and active part of the curriculum of
management students. I take this opportunity to express my gratitude to all the
people who have guided and helped me directly or indirectly in the course of
completion of my project. I did the work as a management trainee at Axis Bank
Ltd. Ambala Road, Kaithal for a period of six weeks starting from 14th June,
2010.

I feel immense pleasure to express a deep sense of gratitude to my Director of

MMIM, “Dr. AMIT MITTAL” who has given me an opportunity to do my
internship in Axis Bank Ltd. at Kaithal Branch & I would also thankful to my
Faculty Guide “PROF. ESHA CHAWLA”. His valuable suggestions and
helping hands has helped me to complete my project successfully.

I would like to extend my heartfelt gratitude to “Mr. VIJAY KUMAR” Branch

Manager of Axis Bank Ltd. (Kaithal), for his proper guidance throughout the
project. Without his support and cooperation I would have failed in my
endeavours and targets in the summer training.

I am indebted to the Bank Employees who supported me in handling my

queries. Last, I feel self-short of words to thanks My Parents and Friends who
had directly or indirectly instrumental in the completion of the project. I am
indebted to all respondents for their time passion during the long conversations.

(SHANKY)

DECLARATION
This is to certify that the project topic “COMPARATIVE
ANALYSIS OF AXIS MUTUAL FUND WITH HDFC
MUTUAL FUND, BIRLA SUN LIFE MUTUAL FUND
AND INVESTORS PERCEPTION TOWARDS
INVESTMENT IN AXIS MUTUAL FUND” is prepared
and submitted by me to MM Institute Of Management
(MMIM) MMU-MULLANA in partial fulfilment for the
award of the Master Degree in Business Administration and
this report has not been submitted elsewhere.

Date: SHANKY
ROLL NO: 12097138
MBA, BATCH: 2009-2011
MMIM, MMU- MULLANA.

EXCUTIVE SUMMARY
In few years Mutual Fund has emerged as a tool for ensuring one’s financial
well being. Mutual Funds have not only contributed to the India growth story
but have also helped families tap into the success of Indian Industry. As
information and awareness is rising more and more people are enjoying the
benefits of investing in mutual funds.

This Project gave me a great learning experience and at the same time it gave
me enough scope to implement my analytical ability. This Report will help to
know the past performance of open ended equity growth mutual funds scheme.
The analytical tools such as Standard Deviation, Alpha, Beta, Sharpe’s
Index, Treynor’s Index and Jensen Index has been show the risk and return
of the portfolio & correlation between the fund return & market return has been
used to show the investment pattern in mutual fund in industry. This report also
tells us about the Investor’s Perception Towards Investment In Axis Mutual
Fund means that investor are How much risk willing to take, How much return
they expect from their investment, Which type of Scheme they prefer, Which
Investment Strategy they follow (Equity fund, Debt fund, Balanced fund) etc.

This Project as a whole can be divided into two parts.

The 1st part gives an insight about Mutual Fund and its various knowledge-full
aspects, The Company Profile, The Industry Profile.

The 2nd part of the Project consist the Research Methodology, Comparative
Analysis of Axis, HDFC and Birla Sun Life Mutual Funds and Investor
perception towards Axis Mutual Fund, Findings, Conclusion, Suggestions &
Recommendation. For the collection of Primary data I made a questionnaire and
surveyed of 100 people. I also taken interview of many People those who were
coming at the Axis Bank Ltd. Kaithal Branch where I done my Project. This
Project covers the topic “COMPARATIVE ANALYSIS OF AXIS MUTUAL
FUND WITH HDFC MUTUAL FUND, BIRLA SUN LIFE MUTUAL
FUND AND INVESTORS PERCEPTION TOWARDS INVESTMENT IN
AXIS MUTUAL FUND”. The data collected has been well organized and
presented. I hope the research findings and conclusion will be of useful.

CONTENTS
Chapter Name & No. Page No.

PART-1

1. INTRODUCTION..............................................................01-02

2. COMPANY PROFILE......................................................03-17

3. INDUSTRY PROFILE......................................................18-39

PART-2

4. LITERATURE REVIEW..................................................40-42

5. RESEARCH METHODOLOGY......................................43-96

6. FINDINGS..........................................................................97-99

7. CONCLUSION......................................................................100

8. SUGGESTIONS & RECOMMENDATION.......................101

BIBLIOGRAPHY

APPENDIX/ANNEXURE
 LIST OF TABELS

Table Name & No. Page No.

1. Board of directors of Axis Bank..........................................................................13

2. Core management team of Axis Bank.................................................................15
3. Shareholding pattern of Axis Bank.....................................................................16
4. Key performance indicators of Axis Bank.........................................................16
5. Financial performance of Axis Bank..................................................................17
6. Fund profile of Axis Equity Growth Fund.........................................................52
7. Returns of Axis Equity Growth Fund.................................................................52
8. Sector allocation of Axis Equity Growth Fund.................................................52
9. Asset allocation of Axis Equity Growth Fund....................................................52
10. Portfolio holdings of Axis Equity Growth Fund................................................53
11. History of Axis Equity Growth Fund..................................................................53
12. Fund profile of HDFC Equity Growth Fund.....................................................55
13. Returns of HDFC Equity Growth Fund.............................................................55
14. Fund sector allocation of HDFC Equity Growth Fund.....................................55
15. Asset allocation of HDFC Equity Growth Fund................................................55
16. Portfolio holdings of HDFC Equity Growth Fund............................................56
17. History of HDFC Equity Growth Fund..............................................................56
18. Fund profile of BSL 95-Growth Fund................................................................59
19. Returns of BSL 95-Growth Fund........................................................................59
20. Sector allocation of BSL 95-Growth Fund.........................................................59
21. Asset allocation of BSL 95-Growth Fund...........................................................59
22. Portfolio holdings of BSL 95- Growth Fund......................................................60
23. History of BSL 95-Growth Fund.........................................................................60
24. Performance evaluation of Axis Equity Growth Fund......................................66
25. Performance evaluation of HDFC Equity Growth Fund..................................68
26. Performance evaluation of BSL 95-Growth Fund.............................................70
27. Treynor’s index f Axis, HDFC, BSL Mutual Funds..........................................72
28. Sharpe’s index of Axis, HDFC, BSL Mutual Funds..........................................73
29. Jensen’s index of Axis, HDFC, BSL Mutual Funds..........................................74
30. Trend analysis of Axis Mutual Fund NAV.........................................................76
31. Expected and Actual NAV of Axis Mutual Fund..............................................77
32. Trend analysis of HDFC Mutual Fund NAV.....................................................78
33. Expected and Actual NAV of HDFC Mutual Fund...........................................79
34. Trend analysis of BSL Mutual Fund NAV.........................................................80
35. Expected and Actual NAV of BSL Mutual Fund.............................................81
36. No. of investor’s at different Age Group............................................................82
37. No. of investor’s having different Occupation...................................................83
38. No. of investor’s at different Income Level........................................................84
39. Investor’s awareness towards Axis MF..............................................................85
40. No. of investor’s from where they know about Axis MF..................................85
41. Investment decision of
investor’s.........................................................................86
42. Investor’s who not invested in Axis
MF..............................................................86
43. Investment objective of Axis MF investor..........................................................87
44. Avg. investment period of Axis MF investor......................................................88
45. Risk prefer by Axis MF investor’s......................................................................89
46. Return expected by various investor’s................................................................90
47. Scheme (By Structure) prefer by investor’s.......................................................91
48. Scheme (By Investment) prefer by Investor’s....................................................92
49. Table of investor’s influenced
behaviour............................................................93
50. From where investor’s purchase Axis MF........................................................94
 51. No. of investor who liked the different feature of Axis MF..............................95
52. Satisfaction level of Axis MF investor’s..............................................................96

LIST OF CHARTS

Chart Name & No. Page No.

1. Treynor's Index Analysis.....................................................................................72

2. Sharpe's Index Analysis.......................................................................................73

3. Jensen's Index Analysis........................................................................................74

4. Trend of AXIS Mutual Fund NAV.....................................................................77

5. Trend of HDFC Mutual Fund NAV....................................................................79

6. Trend of BSL Mutual Fund NAV......................................................................81

7. Analysis according to Age....................................................................................82

8. Analysis according to Occupation.......................................................................83

9. Analysis according to Income..............................................................................84

10. Analysis awareness of Axis MF..........................................................................85

11. Analysis source of awareness...............................................................................85

12. Analysis investment decision of

investor’s.........................................................86

13. Analysis who not invested in Axis MF................................................................86

14. Analysis investment objective of Axis MF..........................................................87

15. Analysis of avg. investment period of Axis MF

Investor...................................88
16. Analysis of risk prefer by Axis MF Investor......................................................89

17. Analysis of expected return of Axis MF Investor..............................................90

18. Analysis of scheme (By Structure) prefer by Axis MF Investor.......................91

19. Analysis of scheme (By Investment) prefer by Axis MF Investor....................92

20. Analysis of investor influenced behaviour of Axis MF......................................93

21. Analysis of purchase decision of Axis MF investor...........................................94

22. Analysis of Axis MF features...............................................................................95

23. Analysis of satisfaction level of Axis MF investor..............................................96

 PART-1

Chapter-1

INTORDUCTION
 INTRODUCTION

Mutual fund is a buzz in the market these days. The mutual fund industry is burgeoning,
it is completely untapped market. Only 5% of total potential of this industry has been
grabbed. Hence this industry has a lot of opportunities in it. That’s why it is so much
interactive. As Indian economy is growing at the rate of 8% per annum, we can see its
effect in all areas. The Indian stock market and companies have become lucrative for
foreign investors. More and more fund is pouring in our country. This is increasing
liquidity in the market and hence increasing the money in the hands of people and thus
investment.

As the future prospects for Indian companies are bright, they have lots of opportunities to
expand their business worldwide, the investment in Indian companies. 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. Atypical
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.
 Chapter-2

COMPANY PROFILE
 COMPANY PROFILE

BANKING IN INDIA:

Banking in India originated in the first decade of 18th century. The General Bank of
India, which started in 1786, and Bank of Hindustan, both of which are now defunct. The
oldest bank in existence in India is the State Bank of India, which originated in the "The
Bank of Bengal" in Calcutta in June 1806. This was one of the three presidency banks,
the other two being the Bank of Bombay and the Bank of Madras. The presidency banks
were established under charters from the British East India Company. They merged in
1925 to form the Imperial Bank of India, which, upon India's independence, became the
State Bank of India. For many years the Presidency banks acted as quasi-central banks, as
did their successors. The Reserve Bank of India formally took on the responsibility of
regulating the Indian banking sector from 1935. After India's independence in 1947, the
Reserve Bank was nationalized and given broader powers.

EARLY HISTORY:

The first fully Indian owned bank was the Allahabad Bank, established in 1865.
However, at the end of late-18th century, there were hardly any banks in India in the
modern sense of the term. The American Civil War stopped the supply of cotton to
Lancashire from the Confederate States. Promoters opened banks to finance trading in
Indian cotton. With large exposure to speculative ventures, most of the banks opened in
India during that period failed. The depositors lost money and lost interest in keeping
deposits with banks. Subsequently, banking in India remained the exclusive domain of
Europeans for next several decades until the beginning of the 20th century.

The Bank of Bengal, which later became the State Bank of India. Around the turn of the
20th Century, the Indian economy was passing through a relative period of stability.
Around five decades had elapsed since the Indian Mutiny, and the social, industrial and
other infrastructure had improved. Indians had established small banks, most of which
served particular ethnic and religious communities. The presidency banks dominated
banking in India. There were also some exchange banks and a number of Indian joint
stock banks. All these banks operated in different segments of the economy. The
exchange banks, mostly owned by Europeans, concentrated on financing foreign trade.
Indian joint stock banks were generally undercapitalized and lacked the experience and
maturity to compete with the presidency and exchange banks. This segmentation let Lord
Curzon to observe, "In respect of banking it seems we are behind the times. We are like
some old fashioned sailing ship, divided by solid wooden bulkheads into separate and
cumbersome compartments."

By the 1900s, the market expanded with the establishment of banks such as Punjab
National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai - both of which
were founded under private ownership. Punjab National Bank is the first Swadeshi Bank
founded by the leaders like Lala Lajpat Rai, Sardar Dyal Singh Majithia. The Swadeshi
movement in particular inspired local businessmen and political figures to found banks of
and for the Indian community. A number of banks established then have survived to the
present such as Bank of India, Corporation Bank, Indian Bank, Bank of Baroda, Canara
Bank and Central Bank of India.

NATIONALIZED BANKS IN INDIA:

Banking System in India is dominated by nationalized banks. The nationalization of

banks in India took place in 1969 by Mrs. Indira Gandhi the then prime minister. The
major objective behind nationalization was to spread banking infrastructure in rural areas
and make available cheap finance to Indian farmers. Fourteen banks were nationalized in
1969. Before 1969, State Bank of India (SBI) was the only public sector bank in India.
SBI was nationalized in 1955 under the SBI Act of 1955.

The second phase of nationalization of Indian banks took place in the year 1980. Seven
more banks were nationalized with deposits over 200 crores.

List of Public Sector Banks in India is as follows:

➢ Allahabad Bank ➢ Andhra Bank

➢ Bank of Baroda ➢ Bank of India
➢ Bank of Maharashtra ➢ Canara Bank
➢ Central Bank of India ➢ Corporation Bank
➢ Dena Bank ➢ Indian Bank
➢ Indian Overseas Bank ➢ Oriental Bank of Commerce
➢ Punjab and Sind Bank ➢ Punjab National Bank
➢ State Bank of India (SBI)
PRIVATE BANKS IN INDIA:

All the banks in India were earlier private banks. They were founded in the pre-
independence era to cater to the banking needs of the people. But after nationalization of
banks in 1969 public sector banks came to occupy dominant role in the banking structure.
Private sector banking in India received a fillip in 1994 when Reserve Bank of India
encouraged setting up of private banks as part of its policy of liberalization of the Indian
Banking Industry. Housing Development Finance Corporation Limited (HDFC) was
amongst the first to receive an 'in principle' approval from the Reserve Bank of India
(RBI) to set up a bank in the private sector.

Private Banks have played a major role in the development of Indian banking industry.
They have made banking more efficient and customer friendly. In the process they have
jolted public sector banks out of complacency and forced them to become more
competitive.

Major Private Banks in India is:

➢ Bank of Rajasthan ➢ Bharat Overseas Bank

➢ Axis Bank ➢ Catholic Syrian Bank
➢ Centurion Bank of Punjab ➢ Dhanalakshmi Bank
➢ Federal Bank ➢ HDFC Bank
➢ ICICI Bank ➢ ING Vysya Bank
➢ Jammu & Kashmir Bank ➢ Karnataka Bank
➢ Karur Vysya Bank ➢ Kotak Mahindra Bank
 AXIS BANK

Axis Bank was the first of the new private banks to have begun operations in 1994, after
the Government of India allowed new private banks to be established. The Bank was
promoted jointly by the Administrator of the specified undertaking of the Unit Trust of
India (UTI - I), Life Insurance Corporation of India (LIC) and General Insurance
Corporation of India (GIC) and other four PSU insurance companies, i.e. National
Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental
Insurance Company Ltd. and United India Insurance Company Ltd. The Bank today is
capitalized to the extent of Rs. 403.63 crores with the public holding (other than
promoters and GDRs) at 53.72%. The Bank's Registered Office is at Ahmedabad and its
Central Office is located at Mumbai. The Bank has a very wide network of more than
1000 branches. The Bank has a network of over 4293 ATMs providing 24 hrs a day
banking convenience to its customers. This is one of the largest ATM networks in the
country. The Bank has strengths in both retail and corporate banking and is committed to
adopting the best industry practices internationally in order to achieve excellence. Well-
diversified asset mix, low proportion of non-performing assets, robust non-operating
income, and high net interest margins are likely to be the key drivers for growth.

AXIS PROFILE:

Axis Bank is one of the fastest growing banks in the country and has extremely
competitive and profitable banking franchise evidence by:
Comprehensive portfolio of banking services including Retail Banking, Corporate
Banking, Treasury, Business Banking, and International Banking.

RETAIL BANKING SERVICES:

The objective of the Retail Bank is to provide its target market customers a full range of
financial products and banking services, giving the customer a one-stop window for all
his/her banking requirements. The products are backed by world-class service and
delivered to the customers through the growing branch network, as well as through
alternative delivery channels like ATMs, Phone Banking and Net Banking. The Axis
Bank Preferred program for high net worth individuals, the Axis Bank Plus and the
Investment Advisory Services programs have been designed keeping in mind needs of
customers who seek distinct financial solutions, information and advice on various
investment avenues. The Bank also has a wide array of retail loan products including
Auto Loans, Loans against marketable securities, Personal Loans and Loans for Two-
wheelers. It is also a leading provider of Depository Participant (DP) services for retail
customers, providing customers the facility to hold their investments in electronic form.
The Bank aims to increase its market-share in India's expanding financial services
industry through continued emphasis on building a strong retail franchise. The Bank
remains committed to developing long-term strong relationships with its customers and
ensuring that they have access to high-quality service as well as the full suite of financial
solutions to help achieve their financial objectives. Growth strategies have focused on
building profitable relationships across various customer segments. In order to achieve
the objective of becoming more customer-centric, rather than product-centric, the Bank
has restructured Retail Banking into two groups namely Mass and Mass Affluent, and
Affluent segments. The Mass and Mass Affluent Segment owns, as the name indicates,
mass-market customers, while the Affluent Segment owns clientele defined as affluent,
comprising customers in the wealth and private banking space.

CORPORATE BANKING SERVICES:

The Axis Bank Corporate Banking franchise aims to provide a wide array of products
across several customer segments, including credit, trade finance, structured finance and
syndication services for debt and equity. Since each corporate engagement also offers
opportunities on the retail side of the business, products anchored in the Retail SBUs also
form a part of the corporate marketing effort. New customer acquisition and relationship-
deepening constitute the two-pronged strategy for growth. In order to leverage growth
opportunities offered by India's infrastructure sector, a separate infrastructure business
group has been established within the corporate banking group. The Axis Bank target
market ranges from large, blue-chip manufacturing companies in the Indian corporate to
small & mid-sized corporates and agri-based businesses. For these customers, the Bank
provides a wide range of commercial and transactional banking services, including
working capital finance, trade services, transactional services, cash management, etc. The
bank is also a leading provider of structured solutions, which combine cash management
services with vendor and distributor finance for facilitating superior supply chain
management for its corporate customers. Based on its superior product delivery/service
levels and strong customer orientation, the Axis Bank has made significant inroads into a
number of leading Indian corporates including multinationals, companies from the
domestic business houses and prime public sector companies. It is recognised as a leading
provider of cash management and transactional banking solutions to corporate customers,
mutual funds, stock exchange members and banks.
TREASURY:

Within this business, the bank has three main product areas - Foreign Exchange and
Derivatives, Local Currency Money Market & Debt Securities, and Equities. With the
liberalisation of the financial markets in India, corporates need more sophisticated risk
management information, advice and product structures. These and fine pricing on
various treasury products are provided through the bank's Treasury team. To comply with
statutory reserve requirements, the bank is required to hold 25% of its deposits in
government securities. The Treasury business is responsible for managing the returns and
market risk on this investment portfolio. The Axis Bank has an integrated Treasury,
covering both domestic and global markets, which manages the Bank's funds across
geographies. During the year, the Bank posted a vigorous growth in both customer-based
and proprietary Treasury business. In foreign exchange business, the Bank has increased
its presence in the inter-bank markets and despite the competitive environment, grew the
customer forex (merchant) business during 2009-10 by 36% year-on-year. The Bank has
played a key role in the sovereign debt markets during the year and booked trading gains
from the government securities portfolio of Rs. 302.63 crores against Rs. 217.35 crores
last year. During the year, the Bank became a member of the NSE on the Interest Rate
Futures segment and used the Interest Rate Swap market for proprietary trading as well as
for hedging its balance sheet risks. The Bank enlarged its business with financial
institutions during the year raising foreign currency resources to support customer trade
business across the borders and increasing trade finance activity. The Bank also
participated actively in risk-participation business overseas with several reputed
international banks. The Bank has a stringent process of setting up interbank exposure
limits and a strong monitoring process to react quickly to changing markets and economic
conditions.

BUSINESS BANKING:

Business Banking initiatives have consistently focused on procuring low-cost funds by

offering a range of current account products and cash management solutions across all
business segments covering corporate, institutions, central and state government
ministries and undertakings, as well as small and retail business customers. The cross-
selling of transactional banking products have also succeeded in enlarging the customer
base and growing current account balances. Thus, sourcing of current accounts is one of
the key enablers for the growth of the balance sheet. As on 31 March 2010, current
account balances for the Bank stood at Rs. 32,167.74 crores, against Rs. 24,821.61 crores
on 31 March 2009, rising 29.60% over the year. On a daily average basis, current account
balances grew from Rs. 14,658.35 crores on 31 March 2009 to Rs. 18,321.75 crores on 31
March 2010, thus increasing 24.99% over the year.

INTERNATIONAL BANKING:
The International Banking strategy of the Bank revolves around leveraging its relations
with corporates in India while providing banking solutions at overseas centres. The
product offerings at overseas centres cover a wide spectrum of businesses involving retail
banking, wealth management, corporate banking and treasury solutions. The Bank's
international presence spans the major financial hubs in Asia with branches at Singapore,
Hong Kong and DIFC, Dubai, and representative offices at Shanghai and Dubai, besides
strategic alliances with banks and exchange houses in the Gulf Co-operation Council
(GCC) countries. While branches at Singapore, Hong Kong and DIFC-Dubai enable the
Bank to partner with Indian corporate doing business globally, the Dubai Representative
Office and the arrangement with GCC based banks and exchange houses provide access
to the NRI population. The Shanghai Representative Office apart from providing
presence in the key market of China fulfils the regulatory requirement of establishing a
branch in course of time to enhance the ability of the Bank to tap business opportunities
emanating from that region.

AXIS BANK PRODUCT BOUQUET :

 Current Accounts
 Saving Accounts
 Easy access through various channels
 Term Deposits
 Locker Facilities
 Financial Advisory Services
 Online Trading
 Wealth Advisory Services
 Depository Services
 Priority Banking Service
 Salary Account
 Mohur Pure Gold Bars
 Retail Loans
 Nri Services
 Travel Currency Card
 Remittance Card
 Resident Foreign Currency (RFC) Account
 Trust/Ngo Saving Account
 Cash Management Services
 De-mate Account
  Gift Card
 Credit Card
 Debit Card etc.

MISSION, VISION AND CORE VALUES OF AXIS BANK:

 MISSION :

 Customer Service and Product Innovation tuned to diverse needs of

individual and corporate clientele.
 Continuous technology up gradation while maintaining human values.
 Progressive globalization and achieving international standards.
 Efficiency and effectiveness built on ethical practices.

 VISION:

“To be the preferred financial solutions provider excelling in customer delivery

through insight, empowered employees and smart use of technology.”

 CORE VALUES:

 Customer Satisfaction through:

o Providing quality service effectively and efficiently.
o "Smile, it enhances your face value" is a service quality stressed on.
o Periodic Customer Service Audits.
 Maximizations of Stakeholder value.
 Success through Teamwork, Integrity and People.
SWOT ANALYSIS OF AXIS BANK:

 STRENGTHS:
• Brand Name

• Support of various promoters.

• High level of services.

• Knowledge of Indian market

 WEAKNESS:

• Not having good image.

• Market capitalization is very low.

• Not been fully able to position it-self correctly.

 OPPORTUNITIES:

• Growing Indian banking sectors.

• People are becoming more service oriented.

• In the global market.

• Dissatisfied Customers.

 THREATS:

• Advent of MNC banks

• Foreign banks

• Govt. banks
 • Future market trends.

Business and Marketing Strategy Of Axis Bank:

 Competitive Strategy:

• For the private sector banks: Differentiation on the basis of area coverage and
restricted Reach, Level of service is the same, Axis got advantage because of
Product Innovation.
• For the government sector banks: High level of service quality and through
product innovation, AXIS not anywhere near but has created a different set of
segment people who believe in the higher set of services.
• For the international banks: Differentiated itself on the base of the reach and
coverage to the people, Service level is somewhat same in the future otherwise
these banks may create a problem.

 Segmentation Strategy:

• Demographics variables: Location (Metros & divisional cities), Occupation

(Business persons, Salaried class-both Govt. and private, Working woman),Age
(Senior citizens, Minor).
• Psychographic variables: Lifestyle-The people who believes in modern banking
with higher set of services i.e. Internet banking (i-connect, mobile refill, travel
currency card etc.).

 Targeting Strategy:

 Target market:

• Corporate banking market: This market target the industries and fulfil their
financial needs. To get 125 Crore Corporate investments.
• Capital market: This segment is targeted on the long term needs of the individual
as well as of industries. To get the 175 Crore Capital investments
• Retail banking market: This segment is for the retail investor and provide them
short term financial credit for their personal, household needs.To get the 200 Crore
retail investment.

 Positioning Strategy:

 Axis bank has positioned itself as a bank which gives higher standard of services
through product innovation for the diverse need of individual & corporate clients.
 So they want to highlight following points in their positioning statement:
Customer centric, Service oriented, Product innovation

BOARD OF DIRECTORS:
The Bank has 13 members on the Board “Mrs. Shikha Sharma” is the CEO and Managing
Director of the Bank.

The members of the Board are:

 Adarsh Adarsh Kishore Chairman

Shikha Sharma  Managing Director & CEO

 M. M. Agrawal  Deputy Managing Director

 N. C. Singhal  Director

 J. R. Varma  Director

 R. H. Patil  Director

Rama Bijapurkar Director

R. B. L. Vaish Director

M. V. Subbiah  Director

K. N. Prithviraj Director

V. R. Kaundinya Director

S. B. S.B. Mathur Director

P. J. Oza Company Secretary

Table 1: Board of directors of Axis Bank

THE CORE MANAGEMENT TEAM:

S. K. Chakrabarti Executive Director (Retail
Banking, SME and Agri.)
V. Srinivasan Executive Director (Corporate
Banking)
Somnath Sengupta Executive Director and CFO
Snehomoy Bhattacharya Executive Director
S. S. Bajaj President & Chief Compliance
Officer
P. Mukherjee President - Large Corporates &
International Banking
 Vinod George President - Wholesale Banking
Operations
M. V. Subramanian President - Business Banking
Rajagopal Srivatsa President - IT and Retail Banking
Operations
S. K. Supekar President & Chief Audit Executive
B. Gopalakrishnan President - Law
Manju Srivatsa President - Retail Banking (Assets)
Bapi Munshi President & Chief Risk Officer
C. Babu Joseph President - Advances
Sonu Bhasin President - Retail Banking
(Liabilities)
Sanjeev K. Gupta President - Finance & Accounts
and Investor Relations
V. K. Bajaj President - Mid Corporates
Sidharth Rath President - Infrastructure Business
R. K. Bammi President - North Zone
S. K. Nandi President - West Zone
S. K. Mitra President - East Zone
C. P. Rangarajan President - South Zone
Table 2: Core management team of Axis Bank

Promoters:

Axis Bank Ltd. has been promoted by the largest and the best Financial Institution
of the country, UTI. The Bank was set up with a capital of Rs. 115 crore, with UTI
contributing Rs. 100 crore, LIC - Rs. 7.5 crore and GIC and its four subsidiaries
contributing Rs. 1.5 crore each.

SUUTI – Shareholding :
Erstwhile Unit Trust of India was set up as a body corporate under the UTI Act,
1963, with a view to encourage savings and investment. In December 2002, the
UTI Act, 1963 was repealed with the passage of Unit Trust of India (Transfer of
Undertaking and Repeal) Act, 2002 by the Parliament, paving the way for the
bifurcation of UTI into 2 entities, UTI-I and UTI-II with effect from 1st February
2003. In accordance with the Act, the Undertaking specified as UTI I has been
transferred and vested in the Administrator of the Specified Undertaking of the
Unit Trust of India (SUUTI), who manages assured return schemes along with
6.75% US-64 Bonds, 6.60% ARS Bonds with a Unit Capital of over Rs. 14167.59
crores.

The Government of India has currently appointed Shri K. N. Prithviraj as the

Administrator of the Specified undertaking of UTI, to look after and administer the
schemes under UTI - I, where Government has continuing obligations and
commitments to the investors, which it will uphold.

The paid up capital of the Bank as on 31 March 2010 rose to Rs. 405.17 crores from Rs. 359.01
crores as on 31 March 2009. The shareholding pattern of the Bank as of 31 March 2010 is
stated below:

Sr. No. Name Of Shareholder % Of Paid Up

Capital
1. Administrator of the 24.00
Specified Undertaking of
the Unit Trust of India
(UTI-I)
2. Life Insurance 10.27
Corporation of India
3. General Insurance 4.27
Corporation and four PSU
Insurance Companies
4. Overseas Investors 33.68
including FIIs/ OCBs/
NRIs
5. Foreign Direct Investment 8.37
(GDR issue)
6. Other Indian Financial 7.07
Institutions/ Mutual
Funds/ Banks
7. Others 12.34
Total 100.00

KEY PERFORMANCE INDICATORS 2009 - 10 2008 - 09

Interest Income as a percentage of working funds* 7.73% 8.59%

Non-Interest Income as a percentage of working funds 2.62% 2.30%
Net Interest Margin 3.75% 3.33%
Return on Average Net Worth 19.89% 19.93%
Operating Profit as a percentage of working funds 3.48% 2.95%
Return on Average Assets 1.67% 1.44%
Profit per employee** Rs. 11.63 lacs Rs. 10.02
lacs
Business (Deposits less inter bank deposits + Advances) Rs. 11.11 Rs. 10.60
per employee** crores crores
Net Non performing assets as a percentage of net 0.36% 0.35%
customer assets ***

Table 3: Shareholding pattern of Axis Bank

Table 4: Key performance indicators of Axis Bank

THE FINANCIAL PERFORMANCE OF THE AXIS BANK as on 31st March 2010:

(Rs. in crores)
PARTICULARS 2009 – 10 2008 - 09 Growth
Deposits 141,300.22 117,374.11 20.38%
Out of which
• Savings Bank Deposits 33,861.80 25,822.12 31.13%
• Current Account Deposits 32,167.74 24,821.61 29.60%
Advances 104,343.12 81,556.77 27.94%
Out of which
• Retail Advances 20,822.90 16,051.78 29.72%
• Non-retail Advances 83,520.22 65,504.99 27.50%
Total Assets/Liabilities 180,647.85 147,722.05 22.29%
Net Interest Income 5,004.49 3,686.21 35.76%
Other Income 3,945.78 2,896.88 36.21%
Out of which
• Trading Profit (1) 822.38 373.86 119.97%
• Fee & other income 3,123.40 2,523.02 23.80%

Operating Expenses excl. depreciation 3,475.40 2,669.55 30.19%

Profit before depreciation, provisions and 5,474.87 3,913.54 39.90%
tax
Depreciation 234.32 188.66 24.20%
Provision for Tax 1,336.83 969.84 37.84%
Other Provisions & Write offs 1,389.19 939.68 47.84%
Net Profit 2,514.53 1,815.36 38.51%
Appropriations :
Transfer to Statutory Reserve 628.63 453.84 38.51%
Transfer to Investment Reserve 14.88 0.06 -
Transfer to Capital Reserve 223.92 146.72 52.62%
Transfer to General Reserve 0.31 - -
Proposed Dividend 567.45 420.52 34.94%
Surplus carried over to Balance Sheet 1,079.34 794.22 35.90%
Table 5: Financial performance of Axis Bank

Chapter-3

INDUSTRY PROFILE
 INDUSTRY PROFILE

THE INDIAN MUTUAL FUND INDUSTRY:

The largest categories of Mutual Funds are the ones floated by the private sector and by
Foreign Asset Management Companies. The largest of these are Prudential ICICI AMC
and Birla Sun Life AMC. The aggregate corpus of assets managed by this category of
AMCs is in excess of Rs.350 bn.

Earlier the Indian Mutual Fund industry was dominated by the Unit Trust of India which
has a total corpus of Rs.700 bn collected from more than 20 million investors. The UTI
has many funds/schemes in all categories i.e. equity, balanced, income etc. with some
being open-ended and some being closed-ended. The Unit Scheme 1964 commonly
referred to as US 64, which is a balanced fund, is the biggest scheme with a corpus of
about Rs.200 bn. UTI was floated by financial institutions and is governed by a special
Act of Parliament. Most of its investors believe that the UTI is government owned and
controlled, which, while legally incorrect, is true for all practical purposes.

The second largest categories of mutual funds are the ones floated by nationalized banks.
Canara bank Asset Management floated by Canara Bank and SBI Funds Management
floated by the State Bank of India are the largest of these. GIC AMC floated by the
General Insurance Corporation and Jeevan Bima Sahayog AMC floated by the LIC are
some of the other prominent ones. The aggregate corpus of funds managed by this
category of AMCs is about Rs.200 bn.

HISTORY OF INDIAN MUTUAL FUNDS INDUSTRY:

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 India. The history of
mutual funds in India can be broadly divided into four distinct phases.

First Phase – 1964-87:

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 Cores 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 Canara Bank 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 Cores.

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 Cores. The Unit Trust
of India with Rs.44,541 Cores 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 Cores 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 September, 2004, there were 29 funds, which
manage assets of Rs.153108 Cores under 421 schemes.

The net asset value (NAV) of mutual funds in India declined when stock prices started
falling in the year 1992. Those days, the market regulations did not allow portfolio shifts
into alternative investments. There was rather no choice apart from holding the cash or to
further continue investing in shares. One more thing to benoted, since only closed-end
funds were floated in the market, the investors disinvested by selling at a loss in the
secondary market.
The performance of mutual funds in India suffered qualitatively. The 1992 stock market
scandal, the losses by disinvestments and of course the lack of transparent rules in the
whereabouts rocked confidence among the investors. Funds now have shifted their focus
to the recession free sectors like pharmaceuticals, FMCG and technology sector. Funds
performances are improving. Funds collection, which averaged at less than Rs100bn per
annum over five-year period spanning 1993-98 doubled to Rs210bn in 1998-99. In the
2000 mobilization had exceeded Rs300bn. Total collection for the financial year ending
March 2000 reached Rs.450bn.

STRUCTURE OF MUTUAL FUND:

The Mutual Funds are structured in two forms: Company form and Trust form.

 Company Form:

These forms of mutual funds are more popular in US.

 Trust Form:

In India, mutual funds are organized as Trusts. The Trust is either managed by a Board of
Trustees or by a Trustee Company. There must be at least 4 members in the Board of
Trustees and at least 2/3 of the members of the board must be independent. Trustee of one
mutual fund cannot be a trustee of another mutual fund.

Unit Trusts – Constituents:

A Mutual Fund is set up in the form of a Trust which has the following constituents:-

1. Fund Sponsor

2. Trust

3. Asset Management Company

4. Other Fund Constituents

 4.1. Custodian and Depositors

4.2. Brokers

4.3. Transfer Agent

4.4. Distributor

1. FUND SPONSOR:

What a promoter is to a company, a sponsor is to a mutual fund. The sponsor initiates the
idea to set up a mutual fund. It could be a financial services company, a bank or a
financial institution. It could be Indian or foreign. It could do it alone or through a joint
venture. In order to run a mutual fund in India, the sponsor has to obtain a license from
SEBI. For this, it has to satisfy certain conditions, such as on capital and profits, track
record (at least five years in financial services), default-free dealings and a general
reputation for fairness. The sponsor must have been profit making in at least 3 years of
the above 5 years.

The Sponsor appoints the Trustees, Custodian and the AMC with the prior approval of
SEBI and in accordance with SEBI Regulations. Like the company promoter, the sponsor
takes big-picture decisions related to the mutual fund, leaving money management and
other such nitty-gritty to the other constituents, whom it appoints. The sponsor should
inspire confidence in you as a money manager and, preferably, be profitable. Financial
muscle, so long as it is complemented by good fund management, helps, as money is then
not an impediment for the mutual fund- it can hire the best talent, invest in technology
and continuously offer high service standards to the investors.

In the days of assured return schemes, sponsors also had to fulfill return promises made to
the unit holders. This sometimes meant meeting shortfalls from their own pockets, as the
government did for UTI. Now that assured return schemes are passed, such bailouts won’t
be required. All things considered, choose sponsors who are good money managers, who
have a reputation for fair business practices and who have deep pockets.

2. TRUST:

The Mutual Fund is constituted as a Trust in accordance with the provisions of the Indian
Trusts Act, 1882 by the Sponsor. The trust deed is registered under the Indian
Registration Act, 1908. The Trust appoints the Trustees who are responsible to the
investors of the fund.

TRUSTEES:

Trustees are like internal regulators in a mutual fund, and their job is to protect the
interests of the unit holders. Trustees are appointed by the sponsors, and can be either
individuals or corporate bodies. In order to ensure they are impartial and fair, SEBI rules
mandate that at least two-thirds of the trustees be independent, i.e., not have any
association with the sponsor.

Trustees appoint the AMC, which subsequently, seeks their approval for the work it does,
and reports periodically to them on how the business being run. Trustees float and market
schemes, and secure necessary approvals. They check if the AMCs investments are
within defined limits and whether the fund’s assets are protected. Trustees can be held
accountable for financial irregularities in the mutual fund.

Rights of the Trustees:

 Trustees appoint the AMC in consultation with the sponsor and according to the
SEBI Regulations.

 All Mutual Fund Schemes floated by the AMC have to be approved by the
Trustees.

 Trustees can seek information from the AMC regarding the operations and
compliance of the mutual fund.

 Trustees review and ensure that the net worth of the AMC is according to the
stipulated norms, every quarter.

Obligations of the Trustees:

 Trustees must ensure that the transactions of the mutual fund are in accordance
with the trust deed.

 Trustees must ensure that the AMC has systems and procedures in place.
  Trustees must ensure due diligence on the part of AMC in the appointment of
constituents and business associates.

 Trustees must furnish to the SEBI, on half yearly basis a report on the activities of
the AMC.

 Trustees must ensure compliance with SEBI Regulations.

3. ASSET MANAGEMENT COMPANY (AMC):

An AMC is the legal entity formed by the sponsor to run a mutual fund. The AMC is
usually a private limited company in which the sponsors and their associates or joint
venture partners are the shareholders. The trustees sign an investment agreement with the
AMC, which spells out the functions of the AMC. It is the AMC that employs fund
managers and analysts, and other personnel. It is the AMC that handles all operational
matters of a mutual fund from launching schemes to managing them to interacting with
investors.
The people in the AMC who should matter the most to you are those who take investment
decisions. There is the head of the fund house, generally referred to as the Chief
Executive Officer (CEO). Under him comes the Chief Investment Officer (CIO), who
shapes the fund’s investment philosophy, and fund managers, who manages its schemes.
They are assisted by a team of analysts, who track markets, sectors and companies.

Although these people are employed by the AMC, its you, the unit holders, who pays
their salaries, partly or wholly. Each scheme pays the AMC an annual ‘fund management
fee’, which is linked to the scheme size and results in a corresponding drop in your return.
If a scheme’s corpus is up to Rs.100 crores it pays 1.25% of its corpus a year; on over
Rs.100 crores, the fee is 1% of the corpus. So, if a fund house has two schemes, with a
corpus of Rs.100 crores and Rs.200 crores respectively, the AMC will earn Rs.3.25 crore
(1.25+2) as fund management fee that year.

If an AMCs expenses for the year exceed what it earns as fund management fee from its
schemes, the balance has to be met by the sponsor. Again, financial strength comes into
play: a cash-rich sponsor can easily pump in money to meet short falls, while a sponsor
with less financial clout might force the AMC to trim costs, which could well turn into an
exercise in cutting corners.

Regulatory requirements for the AMC:

  Only SEBI registered AMC can be appointed as investment managers of mutual
funds.

 AMC must have a minimum net worth of Rs.10 crores at all times.

 An AMC cannot be an AMC or Trustee of another Mutual Fund.

 AMCs cannot indulge in any other business, other than that of asset management.

 At least half of the members of the Board of an AMC have to be

independent.

 The 4th schedule of SEBI Regulations spells out rights and obligations of both
trustees and AMCs.

Obligations of the AMC:

 Investments have to be according to the investment management agreement and

SEBI regulations.

 The actions of its employees and associates have to be as mandated by the

trustees.

 AMCs have to submit detailed quarterly reports on the working and performance
of the mutual fund.

 AMCs have to make the necessary statutory disclosures on portfolio, NAV and
price to the investors.

Restrictions on the AMC:

 AMCs cannot launch a scheme without the prior approval of the trustees.

 AMCs have to provide full details of the investments by employees and Board
members in all cases where the investment exceeds Rs.1 lakh.

 AMCs cannot take up any activity that is in conflict with the activities of the
mutual fund.

Conditions under which an AMC can be taken over:

SEBI approval is required for the change of ownership and unit holders have to be
informed of the takeover.
Scheme take over: If an existing mutual fund scheme is taken over by another AMC, it is
called as scheme take over. The two mutual funds continue to exist.
Trustee and SEBI approval and notification of the unit holders are required for scheme
take over.

4. Other Fund Constituents:

4.1. CUSTODIAN:

A custodian handles the investment back office of a mutual fund. Its responsibilities
include receipt and delivery of securities, collection of income, distribution of dividends
and segregation of assets between the schemes. It also track corporate actions like bonus
issues, right offers, offer for sale, buy back and open offers for acquisition. The sponsor
of a mutual fund cannot act as a custodian to the fund. This condition, formulated in the
interest of investors, ensures that the assets of a mutual fund are not in the hands of its
sponsor. For example, Deutsche Bank is a custodian, but it cannot service Deutsche
Mutual Fund, its mutual fund arm.
4.2. BROKERS:

Role of Brokers in a Mutual Fund:

 They enable the investment managers to buy and sell securities.

 Brokers are the registered members of the stock exchange.

 They charge a commission for their services.

 In some cases, provide investment managers with research reports.

 Act as an important source of market information.

4.3. REGISTRAR OR TRANSFER AGENTS:

Registrars, also known as the transfer agents, are responsible for the investor servicing
functions. This includes issuing and redeeming units, sending fact sheets and annual
reports. Some fund houses handle such functions in-house. Others outsource it to the
Registrars; Karvy and CAMS are the more popular ones. It doesn’t really matter which
model your mutual fund opt for, as long as it is prompt and efficient in servicing you.
Most mutual funds, in addition to registrars, also have investor service centers of their
own in some cities.

4.4. DISTRIBUTORS:

Role of Selling and Distribution Agents:

 Selling agents bring investor’s funds for a commission.

 Distributors appoint agents and other mechanisms to mobilize funds from the
investors.

 Banks and post offices also act as distributors.

 The commission received by the distributors is split into initial commission which
is paid on mobilization of funds and trail commission which is paid depending on
the time the investor stays with the fund.

ABOUT MUTUAL FUND AND ITS VARIOUS ASPECTS:

Before we understand what is mutual fund, it’s very important to know the area in which
mutual funds works, the basic understanding 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.
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 or bonds). When you invest in a mutual
fund, you are 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. Thus a Mutual Fund is the
most suitable investment for the common man as it offers an opportunity to invest in a
diversified, professionally managed basket of securities at a relatively low cost. The flow
chart below describes broadly the working of a mutual fund.

WORKING OF MUTUAL FUND:

The flow chart below describes broadly the working of a Mutual Fund.

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 schemes 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 person as it offers an
opportunity to invest in a diversified, professionally managed basket of securities at a
relatively low cost. Since small investors generally do not have adequate time,
knowledge, experience & resources for directly accessing the capital market, they have to
rely on an intermediary, which undertakes informed investment decisions & provides
consequential benefits of professional expertise. The advantage of Mutual Funds to the
investors is professional managed, low transaction cost, liquidity, transparency, well
regulated, diversified portfolios & tax benefits. By pooling their assets through mutual
funds, investors achieve economies of scale.
A collected corpus can be used to procure a diversified portfolio indicating greater returns
has also create economies of scale through cost reduction. This principle has been
effective worldwide as more & more investors are going the mutual fund way. This
portfolio diversification ensures risk minimization. The criticality such a measure comes
in when you factor in the fluctuations that characterize stock markets. The interest of the
investors is protected by the SEBI, which acts as a watchdog. Mutual funds are governed
by SEBI (Mutual Funds) regulations, 1996.
TYPE OF MUTUAL FUND SCHEMES:

Mutual fund schemes may be classified on the basis of its structure and its investment
objective.
  Based on their structure:

 Open-ended Funds:

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.

 Closed-ended Funds:

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.

 Interval Funds:

Interval funds combine the features of open-ended and close-ended schemes. They are
open for sale or redemption during pre-determined intervals at NAV related prices.

 Based on their investment objective:

 Equity funds:

These funds invest in equities and equity related instruments. With fluctuating share
prices, such funds show volatile performance, even losses. However, short term
fluctuations in the market, generally smoothens out in the long term, thereby offering
higher returns at relatively lower volatility. At the same time, such funds can yield great
capital appreciation as, historically, equities have outperformed all asset classes in the
long term. Hence, investment in equity funds should be considered for a period of at least
3-5 years. It can be further classified as:

i. Index Funds: In this case a key stock market index, like BSE Sensex or Nifty
is tracked. Their portfolio mirrors the benchmark index both in terms of
composition and individual stock weight ages.

ii. Equity Diversified Funds: 100% of the capital is invested in equities

spreading across different sectors and stocks.

iii. Dividend Yield Funds: it is similar to the equity diversified funds except that
they invest in companies offering high dividend yields.
iv. Thematic Funds: Invest 100% of the assets in sectors which are related
through some theme .e.g. -An infrastructure fund invests in power,
construction, cements sectors etc.

v. Sector Funds: Invest 100% of the capital in a specific sector. e.g. - A banking
sector fund will invest in banking stocks.

vi. ELSS: Equity Linked Saving Scheme provides tax benefit to the investors.
  Balanced fund:

Their investment portfolio includes both debt and equity. As a result, on the risk-return
ladder, they fall between equity and debt funds. Balanced funds are the ideal mutual
funds vehicle for investors who prefer spreading their risk across various instruments. It
can be further classified as:

i) Debt-Oriented Funds: Investment below 65% in equities.

ii) Equity-Oriented Funds: Invest at least 65% in equities, remaining in debt.

 Debt fund:

They invest only in debt instruments, and are a good option for investors averse to idea of
taking risk associated with equities. Therefore, they invest exclusively in fixed-income
instruments like bonds, debentures, Government of India securities; and money market
instruments such as certificates of deposit (CD), commercial paper (CP) and call money.
Put your money into any of these debt funds depending on your investment horizon and
needs. . It can be further classified as:

i) Liquid Funds: These funds invest 100% in money market instruments, a large
portion being invested in call money market.

ii) Gilt Funds ST: They invest 100% of their portfolio in government securities
of and T-bills.

iii) Floating Rate Funds: Invest in short-term debt papers. Floaters invest in debt
instruments which have variable coupon rate.

iv) Arbitrage Fund: They generate income through arbitrage opportunities due to
mispricing between cash market and derivatives market. Funds are allocated to
equities, derivatives and money markets. Higher proportion (around 75%) is
put in money markets, in the absence of arbitrage opportunities.

v) Gilt Funds LT: They invest 100% of their portfolio in long-term government
securities.
 vi) Income Funds LT: Typically, such funds invest a major portion of the
portfolio in long-term debt papers.

vii) MIPs: Monthly Income Plans have an exposure of 70%-90% to debt and an
exposure of 10%-30% to equities.

viii) FMPs: Fixed monthly plans invest in debt papers whose maturity is in line
with that of the fund.

INVESTMENT STRATEGIES OF MUTUAL FUNDS:

 Systematic Investment Plan (SIP):

Under SIP a fixed sum of your money is taken away from your Bank Accounts and
invested in a Mutual fund. Payment is made through post dated cheques or direct debit
facilities. The investor gets fewer units when the NAV is high and more units when the
NAV is low. This is called as the benefit of Rupee Cost Averaging (RCA).

 Systematic Transfer Plan (STP):

The way STP works is, all your money is actually invested in a Mutual funds itself
(probably Debt) and units are sold every month and its invested in another Mutual fund
(probably Equity) or vice versa . Under this an investor invest in debt oriented fund and
give instructions to transfer a fixed sum, at a fixed interval, to an equity scheme of the
same mutual fund.

 Systematic Withdrawal Plan (SWP):

If someone wishes to withdraw his/her money from a mutual fund then he/she can
withdraw a fixed amount each month. You should redeem your units in mutual funds
every month and get it deposited in your Bank accounts , it’s called SWP (systematic
Withdrawal Plan) , which is recommended to liquidate your mutual funds corpus after
you see a good bull market to protect your investment.

RISKS ASSOCIATED WITH MUTUAL FUNDS:

The most important relationship to understand is the risk-return trade-off. Higher
the risk greater the returns/loss and lower the risk lesser the returns/loss.

Hence it is up to you, the investor to decide how much risk you are willing to take. In
order to do this you must first be aware of the different types of risks involved with your
investment decision.

 MARKET RISK:

Sometimes prices and yields of all securities rise and fall. Broad outside influences
affecting the market in general lead to this. This is true, may it be big corporations or
smaller mid-sized companies. This is known as Market Risk. A Systematic Investment
Plan (“SIP”) that works on the concept of Rupee Cost Averaging (“RCA”) might help
mitigate this risk.

 CREDIT RISK:

The debt servicing ability (may it be interest payments or repayment of principal) of a

company through its cash flows determines the Credit Risk faced by you. This credit risk
is measured by independent rating agencies like CRISIL who rate companies and their
paper. An ‘AAA’ rating is considered the safest whereas a ‘D’ rating is considered poor
credit quality. A well-diversified portfolio might help mitigate this risk.
  INFLATION RISK:

Things you hear people talk about “Rs. 100 today is worth more than Rs. 100 tomorrow”.
The root cause, Inflation. Inflation is the loss of purchasing power over time. A lot of
times people make conservative investment decisions to protect their capital but end up
with a sum of money that can buy less than what the principal could at the time of the
investment. This happens when inflation grows faster than the return on your investment.
A well-diversified portfolio with some investment in equities might help mitigate this
risk.

 INTEREST RATE RISK:

In a free market economy interest rates are difficult if not impossible to predict. Changes
in interest rates affect the prices of bonds as well as equities. If interest rates rise the
prices of bonds fall and vice versa. Equity might be negatively affected as well in a rising
interest rate environment. A well-diversified portfolio might help mitigate this risk.

 POLITICAL RISK:

Changes in government policy and political decision can change the investment
environment. They can create a favourable environment for investment or vice versa.

 LIQUIDITY RISK:

Liquidity risk arises when it becomes difficult to sell the securities that one has
purchased. Liquidity Risk can be partly mitigated by diversification, staggering of
maturities as well as internal risk controls that lean towards purchase of liquid securities.
You have been reading about diversification above, but what is it? Diversification the
nuclear weapon in your arsenal for your fight against risk. It simply means that you must
spread your investment across different securities (stocks, bonds, money market
instruments, real estate, fixed deposits etc.) and different sectors (auto, textile,
information technology etc.). This kind of a diversification may add to the stability of
your returns.

ADVANTAGES OF MUTUAL FUND:

  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:

You get regular information on the value of your investment in addition to disclosure on
the specific investments made by your 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, you 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 because of its large corpus allows even a small investor to take the benefit of its
investment strategy.

 Choice of Schemes:

Mutual Funds offer a family of schemes to suit your varying needs over a lifetime.

 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 Mutual
Funds are regularly monitored by SEBI.
DISADVANTAGE OF MUTUAL FUND:
There are certainly some benefits to mutual fund investing, but you should also be aware
of the drawbacks associated with mutual funds.

 No Insurance:

Mutual funds, although regulated by the government, are not insured against losses. The
Federal Deposit Insurance Corporation (FDIC) only insures against certain losses at
banks, credit unions, and savings and loans, not mutual funds. That means that despite the
risk reducing diversification benefits provided by mutual funds, losses can occur, and it is
possible (although extremely unlikely) that you could even lose your entire investment.

 Dilution:

Although diversification reduces the amount of risk involved in investing in mutual

funds, it can also be a disadvantage due to dilution. For example, if a single security held
by a mutual fund doubles in value, the mutual fund itself would not double in value
because that security is only one small part of the fund's holdings. By holding a large
number of different investments, mutual funds tend to do neither exceptionally well nor
exceptionally poorly.

 Fees and Expenses:

Most mutual funds charge management and operating fees that pay for the fund's
management expenses (usually around 1.0% to 1.5% per year). In addition, some mutual
funds charge high sales commissions, 12b-1 fees, and redemption fees. And some funds
buy and trade shares so often that the transaction costs add up significantly. Some of
these expenses are charged on an ongoing basis, unlike stock investments, for which a
commission is paid only when you buy and sell.

 Poor Performance:

Returns on a mutual fund are by no means guaranteed. In fact, on average, around 75%
of all mutual funds fail to beat the major market indexes, like the S&P 500, and a growing
number of critics now question whether or not professional money managers have better
stock-picking capabilities than the average investor.

 Loss of Control:
The managers of mutual funds make all of the decisions about which securities to buy and
sell and when to do so. This can make it difficult for you when trying to manage your
portfolio. For example, the tax consequences of a decision by the manager to buy or sell
an asset at a certain time might not be optimal for you. You also should remember that
you are trusting someone else with your money when you invest in a mutual fund.

 Trading Limitations:

Although mutual funds are highly liquid in general, most mutual funds (called open-
ended funds) cannot be bought or sold in the middle of the trading day. You can only buy
and sell them at the end of the day, after they've calculated the current value of their
holdings.
 PART-2

Chapter-4

LITERATURE REVIEW

Literature Review
The literature review includes the Academic Books, Journals, Internet Access,
Magazines etc.

 ICFAI reader1- Mutual fund distribution channel- In this I gathered the

information about the various parties involved in mutual fund transaction. It
guided me to know about the growth of the various schemes of Mutual Fund over
the last few years.
 Economic & political weekly2 April-2010 – It helped me to know about the
trends of mutual fund industry. Some data regarding this has been taken from it.
 “Gupta S.P.3”. The information regarding the statistical tools and their limitations
in different fields the research is given in this section. This section explains why to
use correlation and what are the situations in which correlation can be used, and
what does correlation means.
 Schaums: Statistical Methods4- Sultan Chand Publication The information
regarding the statistical tools and their limitations in different fields the research is
given in this section. This section explains why to use trend analysis and what are
the situations in which correlation can be used, and what does correlation means.
 Fisher & Jordan5: Security Analysis & Portfolio management-this book has been
used to calculate the indices on which basis the ranking has been given.
 Pandian Punitawathy6: Security Analysis & portfolio management: This book
helped in understanding the concept of different indices for portfolio evaluation.
 Beri G.C.7- Marketing Research 3rd edition: This book helped in understanding the
different research designs and analytical tools used here.
 “Kothari C.R.8” The information regarding the basics of research and research
methodology , what are the different types of research designs, what is problem
statement, what are the sources of data collection and what are the methods of
data collection is given in this section
 Pandey I.M.9-Financial Management by Vikas Publishing House the concept of
mutual funds & various schemes have been studied from this book.
 Srivastva10: Management of Indian Financial Institutions-Himalaya Publishing
House 6th edition. – Introduction of mutual funds, their advantages, disadvantages
 and various types have been taken from it.
 Indian journal of commerce11-jun, 2010: In this article they shows the growth of
the mutual fund in India is given
 Southern Economist12 Sep.2009: In this the performance of the mutual fund was
given.
 Journal of finance13-feb, 2010: In this the various schemes offered by the mutual
fund houses were given.
 Facts for you14-jan, 2010: In the information about the risk and return was given.
 The Management Accountant15 - April 2010: In this article related to the
benefit related to the mutual fund as comparison to the fixed deposits in he
Banks was given.
 .Southern Economist16 - December 15, 2009: In this the portfolio of the
different Mutual fund houses was given.
 SEBI Bulletin 17– July, 2009: In the Asset Management of the different mutual
fund houses was given.
 Charter financial analysis18-jan, 2010: In this information about the various
Analytical tools was given
 Journal of finance19-dec, 2009: In this the fund size of the different Mutual fund
was given.
 ICFAI reader20-july2008, Feb 2009: In this information about the Entry and Exit
load was given.

Websites visited:
 http://www.amfiindia.com/showhtml.asp?page=aboutus a-This site explained the
information regarding various mutual funds and its growth in past years.
 www.mutualfundsindia/navreports.jspb – It provided me the data regarding various
parties involved in mutual funds and investment pattern of public and private
sector mutual funds
 http://www.amfiindia.com/navtypereport.asp#Type10 c – Data regarding NAVs on
different dates has been taken from this site.
 www.financeindiamart.comd- Different expert comments have been extracted &
the mechanism of mutual funds has been taken from this site
 .http://www.hdfcfund.com/navcorner/index.jspe– This site provided information
regarding managing of funds by the investors and investment criteria in different
funds

 http://www.bslmutualfund.com/aboutus/index.jspf--- This site provided

information regarding Tata mutual fund such as history of Tata mutual fund,
portfolio etc…

 http://www.axismutualfund.com/aboutus/index.jsp g-- This site provided

information regarding UTI Mutual fund such as history, portfolio, board of
director etc…

 http://www.valuereserachonline.com/history/ index.jsp-- This site provided

information regarding nifty index. This site provided past year of return nifty.
 Chapter-5

RESEARCH
METHODOLOGY
 RESEARCH METHODOLOGY

The procedure adopted for conducting the research requires a lot of attention as it has
direct bearing on accuracy, reliability and adequacy of results obtained. It is due to this
reason that research methodology, which we used at the time of conducting the research,
needs to be elaborated upon. Research Methodology is a way to systematically study &
solve the research problems. If a researcher wants to claim his study as a good study, he
must clearly state the methodology adopted in conducting the research so that it may be
judged by the reader whether the methodology of work done is sound or not.

The Research Methodology here includes:-

1. Meaning of research
2. Research problem
3. Research design
4. Sampling design
5. Data collection method
6. Analysis and interpretation of Data

 Meaning of Research
Research is defined as “a scientific & systematic search for pertinent information on a
specific topic. Research is an art of scientific investigation. Research is a systematized
effort to gain new knowledge. It is a careful investigation or inquiry especially through
search for new facts in any branch of knowledge. Research is an academic activity and
this term should be used in a technical sense. Research com prices defining and
redefining problems, formulating hypothesis or suggested solutions; making deductions
and reaching conclusions to determine whether they fit the formulating hypo thesis.
Research is thus, an original contribution to the existing stock of knowledge making for
its advancement. The search for knowledge through objective and systematic method of
finding solution to a problem is research.

 Research Design
A research design is the arrangement of conditions for collection and analysis of data in a
manner that aims to combine relevance to the research purpose with economy in
procedure. Research design is the conceptual structure within which research is
conducted. It constitutes the blueprint for the collection measurement and analysis of
data. Research design operational implication to the final analysis of data.

A research design is a framework for the study and is used as a guide in collecting and
analyzing the data. It is a strategy specifying which approach will be used for gathering
and analyzing the data. It also includes the time and cost budget since most studies are
done under these two constraints. Research design can be categorized as:

Research Design

Exploratory Research Diagnostic Research

Descriptive Research Experimental Research

The present study is descriptive in nature, as it seeks to describe ideas and insight and to
bring out new relationships. Research design is flexible enough to provide opportunity for
considering different aspects of problems under study. It helps in bringing into focus
some inherent weakness in enterprise regarding which in depth study can be conducted by
management.

In this study I will apply Descriptive Research Design. As Descriptive Research

Design is the description of state of affairs, as it exists at present. In this type of research
the researcher has no control over the variables, he can only report what has happened or
what is happening.

 OBJECTIVE OF STUDY:

 Main Objective:

The main objective of this project is to make the Comparative Analysis of the Axis MF
with HDFC and BSL mutual funds and getting the opinion of people regarding Axis
Mutual Fund.

 Sub Objectives:

 To study the Investment procedure in Mutual funds.

 To study in brief various Mutual funds promoted by different AMC.
 I have tried to explore the general opinion about mutual funds.
 To study the Mutual fund industry in detail.
  MANAGERIAL USEFULNESS OF STUDY:

This study will also give information about prospective investors both individual as well
as institutional clients in areas of surrey where they can get lead. It provides the AMC a
feedback from customers regarding their problems and perception about investing in
mutual funds so that they can improve their services.

 SCOPE OF THE STUDY:

 Geographical Scope:

The geographical scope of the study is not limited. The research was carried on in the
Northern Region of India. It is restricted to kaithal. I have visited people randomly nearby
my locality.

 Functional Scope:

This study can be used to understand the behavioural aspect of people who invest, what is
their investment potential and how much risk can they take. The study throws some light
on t performing schemes of Axis Mutual Fund.

 LIMITATIONS OF THE STUDY:

 Availability of data was a constraint due to only those mutual funds data is
considered, which is available, and also there are some MFs whose data was not
available so their duration was shortened.
 Generally longer period gives us more accurate estimates of beta. In this case
period of analysis is only 4 years.
 Though every - "precaution has taken due to large data and complex calculations
there may be chances of error.
 Time Limitation.
 Research has been done only at Kaithal.
 Some of the persons were not so responsive.
 Possibility of error in data collection.
 Possibility of error in analysis of data due to small sample size.
  SAMPLING:

 SAMPLING METHOD ADOPTED:

The sampling method chosen is Area Sampling. As the primary sampling unit represents
a cluster of units based on geographic area. The geographical area chosen for individual
customers was at the Axis Bank Ltd. Kaithal Branch at Ambala Road. The sample is
selected in a random way, irrespective of them being investor or not or availing the
services or not. It was collected through mails and personal visits to the known persons,
by formal and informal talks and through filling up the questionnaire prepared.

 Sample size:

The sample size of my project is limited to 100 only. Out of which only 70 people
attempted all 15 questions. Other 30 people not investing in Axis Mutual Fund. So, they
attempted only 5 questions.

 Sample Design:

A ‘sample design’ is a definite plan for obtaining a sample from a given population. It
refers to the technique or the procedure the researcher would adopt in selecting items for
the sample. The corporate sea being very fast, it becomes impossible to contact each and
every individual of the universe due to the time and money constraints. Therefore, the
study has been narrowed down to a representative sample to make the study more
manageable.

 SOURCES OF DATA COLLECTION:

For the completion of this project both Primary and Secondary data are required.

 Primary Data Collection:

Primary Data is the first hand information collected directly from the respondents .In
dealing with real life problem it is often found that data at hand are inadequate, and
hence, it becomes necessary to collect data that is appropriate. There are several ways of
collecting the appropriate data which differ considerably in context of money costs, time
and other resources at the disposal of the researcher. Primary data can be collected either
through experiment or through survey. The data collection for this study was done in the
following manner:
  Through personal interviews:

A rigid procedure was followed and we were seeking answers to many pre-conceived
questions through personal interviews.

 Through questionnaire:

I had prepared a questionnaire for collecting information about second part of the project.
Information to find out the investment potential and goal was found out through
Questionnaires.

 Secondary Data Collection:

Secondary data is the second handed data. Secondary Data is collected through internet,
books, journals, and axis mutual fund navigators.

 DATA ANALYSIS PROCEDURE:

The major focus is on the results of the questionnaire survey.

 I will screen all the questionnaires in order to gain a first overview over the data
gathered.

 The analysis of the data generated during the study with the help of various
statistical tools like bar charts & pie charts.

 At the last I will draw all conclusion regarding customer’s preferences and
satisfaction about mutual funds.
COMPARATIVE ANALYSIS
 AXIS MUTUAL FUND

Axis Bank was the first of the new private banks to have begun operations in 1994, after
the Government of India allowed new private banks to be established. The Bank was
promoted jointly by the Administrator of the specified undertaking of the Unit Trust of
India (UTI - I), Life Insurance Corporation of India (LIC) and General Insurance
Corporation of India (GIC) and other four PSU insurance companies, i.e. National
Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental
Insurance Company Ltd. and United India Insurance Company Ltd. The Bank today is
capitalized to the extent of Rs. 405.17 crores with the public holding (other than
promoters and GDRs) at 53.09%.

The Bank's Registered Office is at Ahmedabad and its Central Office is located at
Mumbai. The Bank has a very wide network of more than 1000 branches and Extension
Counters (as on 31st March 2010). The Bank has a network of over 4055 ATMs (as on
31st March 2010) providing 24 hrs a day banking convenience to its customers. This is
one of the largest ATM networks in the country. The Bank has strengths in both retail and
corporate banking and is committed to adopting the best industry practices internationally
in order to achieve excellence.

Corporate Social Responsibility

Axis Bank takes its corporate social responsibility seriously. It set up the Axis Bank
Foundation (registered as a public trust) in 2006 to support its philanthropy. Each year,
the Bank transfers 1% of its net profits of the previous year to the Foundation. The
Foundation focuses on education for underprivileged children. Axis Bank shares the
belief that micro-credit and microfinance services are major enablers of financial
inclusion to the under privileged sections of society. The Bank has 86 microfinance
relationships in 18 states of which 4 are in the North East with a corresponding client
outreach of around 18.50 lakh. Most of the beneficiaries are poor women engaged in
small and marginal enterprises. The Bank looks at agri-business as an inclusive and
profitable business proposition. The retail agriculture organisational model consists of 46
strategically placed agriculture clusters. The Bank offers its retail agri products to farmers
through 249 of its branches.
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 appreciation 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.

As Axis Bank Financial Advisory team, we adopt a strong research driven

recommendation model to help you choose the best funds based on qualitative and
quantitative parameters. Apart from this, a dedicated Relationship Manager can also be
assigned to you to ensure that your investment requirements are taken care of, smoothly
and efficiently. Our advisors understand your profile and lead you through a structured
financial planning process to devise financial solutions best suited to you. The advisors
will also help you choose the right investment products in line with your investment
goals.

 Board of Directors:

Shikha Sharma, Chairperson, Associate Director

 MD & CEO of Axis Bank

 Over two decades of experience across the spectrum of financial services
 Instrumental in setting up various market leading businesses for the ICICI Group

T S Narayanasami, Independent Director

 Has been the Chairman & Managing Director of Bank of India, Indian
Overseas Bank and Andhra Bank
 Has held various important positions within the banking industry

Pranesh Misra, Independent Director

 Founder of Brandscapes Consultancy Private Limited

 Over 26 years experience in communication, marketing, marketing research,
brand planning and international client management across varied industries

U R Bhat, Independent Director

 Managing Director of Dalton Capital Advisors (India)

  Fellow of the Chartered Institute of Bankers, London
 Previously the Head of Country Operations of Jardine Fleming Asset
Management Company (AMC) in India for 7 years advising the India
dedicated funds of the Flemings Group.

Ms. Sonu Bhasin, Associate Director

 President – Retail Banking Retail Liability at Axis Bank

 Heads the Wealth Management Division which includes the Financial
Advisory Services for the Retail Investors and Wealth Management for the
HNIs
 In previous role with ING Vysya Bank has handled several assignments in the
areas of Private Banking, Financial Services & Third Party Products .

Rajiv Anand, MD & CEO of Axis AMC, Associate Director

 A Chartered Accountant with over 19 years experience in capital markets

 Led an award winning investment management team at IDFC (erstwhile
Standard Chartered) AMC
 Awarded Business Standard’s Debt Fund Manager of the year in 2004
 Worked in the Treasuries of HSBC and Standard Chartered Bank

 Business Philosophy:
Our business will be built on three pillars. These are:

Outside-in View

 Investor at the heart of every single decision.

 Communicate in his language, not in ours.

Enduring Wealth Creation

 Play a serious and credible role in investor's money basket.

 Encourage investors to build a long-term perspective of the mutual fund
category.

Long-term Relationships

 Leverage the equity of the 'Axis' brand

  Aim at building relationships rather than being transactional.

AXIS EQUITY-GROWTH FUND

Fund objective:

An open-ended balanced fund investing between 40% to 75% in equity related securities
and the balanced in debt (fixed income securities) with a view of generate regular income
together with capital appreciation.

Fund Manager: “Mr. Chandresh Nigam”

Fund Profile Returns

Period Returns (%)
Latest NAV 75.68 (07/04/2010) 1-Month 4.36
52- Week High 75.68 (07/04/2010) 3-Month 2.17
52- Week Low 47.31(08/04/2009) 1-year 61.81
Fund Category Hybrid: Equity 3-year 13.33
Oriented 5-year 16.01
Fund Type Open-Ended
Launch Date March 1995
Risk Grade Average
Return Grade Average
Net Assets (Cr) 1957.19
(31/03/2010)
Table 6: Fund profile of Axis Equity Table7: Returns of Axis Equity
Growth Fund Growth Fund

Sector Allocation Asset Allocation

Top 5 Sectors % Net Asset As on 28/02/2010 % Net Asset

As on 28/02/2010
Energy 13.70 Equity 73.24
Engineering 7.90
Financial 7.62 Debt 24.79
Technology 6.03
Diversified 5.54 Others 01.97
Table 8: Sector allocation of Axis Table 9:
Asset allocation of Axis
Equity Growth Fund Equity Growth Fund
 Portfolio Top Holdings

Company Sector Mkt.Value*(Rs. In Cores) % of Asset

Equity Shares
RELIANCE Oil & Gas 34.26 3.35
INFOSYS TECH Technology 33.46 3.27
BHEL Engineerin 30.54 2.98
g
TCS Technology 28.13 2.75
LARSEN Engineerin 27.66 2.70
g
NTPC Utilities 25.28 2.47
SBI Banks 23.69 2.32
AXIS BANK Banks 23.26 2.27
HDFC BANK Banks 23.06 2.25
SILMENS Telecom 22.92 2.24
BHARAT ELECTRONICS Engineerin 18.40 1.80
g
ONGC Energy 16.98 1.66
GRASIM INDUSTRIES Diversified 16.17 1.58
TATA TEA FMCG 15.92 1.56
ITC LTD FMCG 15.73 1.54
Debt Holdings
Company Instrument Mkt.Value* (Rs. In Cores) % of Asset
EMAAR MGF LAND & PVT Realty 76.46 7.47
GOI Sovereign 58.34 5.70
UCO BANK Finance 20.00 1.95
Table 10: Portfolio Holdings Of Axis Equity Growth Fund

History AXIS Equity-Growth Fund

2009 2008 2007 2006 2005 2004

NAV 41.42 48.02 32.56 26.15 20.80 20.11
Total Return -13.74 47.48 22.78 40.22 22.34 100.70
+/- S&P CNX 3.15 -8.90 1.87 26.45 9.72 28.16
Nifty
Net Assets Rs. Cr. 1805.8 2108.90 1555.80 1508.70 1295.30 1443.20
Table 11: History Of Axis Equity Growth Fund
 HDFC MUTUAL
FUND

HDFC (Housing Development Finance Corporation Limited) is one of the dominant

players in the Indian mutual fund space. HDFC was incorporated in 1977 as the first
specialised Mortgage Company in India. HDFC Mutual Funds are handled by HDFC
Asset Management Company Limited. HDFC Asset Management Company was
incorporated under the Companies Act, 1956, on December 10, 1999, and was approved
to act as an Asset Management Company for the Mutual Fund by SEBI on July 3, 2000.
The company also provides portfolio management / advisory services.

 HDFC Asset Management Company Limited (AMC):

HDFC Asset Management Company (AMC) is the first AMC in India to have been
assigned the ‘CRISIL Fund House Level – 1’ rating. This is its highest Fund Governance
and Process Quality Rating which reflects the highest governance levels and fund
management practices at HDFC AMC It is the only fund house to have been assigned this
rating for two years in succession. Over the past, we have won a number of awards and
accolades for HDFC performance.

We believe, that, by giving the investor long-term benefits, we have to constantly review
the markets for new trends, to identify new growth sectors and share this knowledge with
our investors in the form of product offerings. We have come up with various products
across asset and risk categories to enable investors to invest in line with their investment
objectives and risk taking capacity. Besides, we also offer Portfolio Management Service.

HDFC Asset Management Company Ltd (AMC) was incorporated under the Companies
Act, 1956, on December 10, 1999, and was approved to act as an Asset Management
Company for the HDFC Mutual Fund by SEBI vide its letter dated June 30, 2000.

 Vision:
“To be a dominant player in the Indian mutual fund space, recognized for its high levels
of ethical and professional conduct and a commitment towards enhancing investor
interests.”

HDFC EQUITY-GROWTH FUND

Fund objective:
An open-ended balanced scheme with the objective of long term growth of capital and
current income, through a portfolio of equity and fixed income securities. The HDFC
Equity-Growth fund seeks to achieve long- term capital appreciation and current income
from a balanced portfolio with a target allocation of 70% equity, 30% debt and money
market securities.

Fund Manager: “Mr. Prashant Jain”

Fund Profile Returns

Latest NAV 277.09(31/03/2010) Period Returns (%)

52- Week High 277.10(29/03/2010) 1-Month 4.9
52- Week Low 152.67(01/04/2009) 3-Month 7.5
Fund Category Hybrid: Equity 6-Month 9.4
Oriented 1-year 54.2
Fund Type Open-Ended 2-year 81.5
Launch Date December 1994 3-year 50.7
Risk Grade Average 5-year 244.2
Return Grade Above Average
Net Assets (Cr) 6734.63
(28/02/2010)

Table 12: Fund profile of HDFC Table 13: Returns of HDFC

Equity Growth Fund Equity Growth Fund

Sector Allocation Asset Allocation

Top 5 Sectors % Net Asset

As on 28/02/2010 % Net Asset
As on 28/02/2010
Banking/Finance 22.15
Equity 65.48
Oil & Gas 15.32
Pharmaceuticals 09.92
Debt 9.81
Technology 07.34
Others 24.71
Engineering 07.05
Table 14: Sector Allocation Of HDFC Table 15: Asset Allocation Of HDFC
Equity Growth Fund Equity Growth Fund
Portfolio Top Holdings

Company Sector Mkt.Value*(Rs. In % of Asset

Cores)
Equity Shares
SBI Banks 506.44 7.52
ONGC Oil & Gas 449.07 6.67
TITAN INDUSTRY Miscellaneous 255.45 3.79
BANK OF BARODA Banks 252.49 3.75
ICICI BANK Banks 216.28 3.21
INFOSYS Technology 195.37 2.90
NTPC Utilities 194.36 2.89
LARSEN Engineering 194.01 2.88
GAIL Oil & Gas 188.20 2.79
ZEE ENTERTAIN Media 186.12 2.76
Table 16: Portfolio Holdings Of HDFC Equity Growth Fund

History HDFC Equity- Growth Fund

2009 2008 2007 2006 2005 2004

NAV 188.42 223.32 145.39 107.01 65.77 51.57
Total Return -15.63 53.61 35.86 62.70 27.53 126.30
+/- S&P CNX 3.15 -8.90 1.87 26.45 9.72 28.16
Nifty
Net Assets Rs. Cr. 4716.6 5491.4 3937.7 2185.2 1148.6 978.0
Tab
 BIRLA SUN LIFE MUTUAL FUND

Birla Sun Life Asset Management Company Ltd. (BSLAMC), the investment managers
of Birla Sun Life Mutual Fund, is a joint venture between the Aditya Birla Group and the
Sun Life Financial Services Inc. of Canada. The joint venture brings together the Aditya
Birla Group's experience in the Indian market and Sun Life's global experience.

Established in 1994, Birla Sun Life Mutual fund has emerged as one of India's leading
flagships of Mutual Funds business managing assets of a large investor base. Our
solutions offer a range of investment options, including diversified and sector specific
equity schemes, fund of fund schemes, hybrid and monthly income funds, a wide range of
debt and treasury products and offshore funds.

 Vision:

“To be a leader and role model in a broad based and integrated financial services
business.”

 
 Mission:
 
To consistently pursue investor's wealth optimization by:
 
 Achieving superior and consistent investment results.
 Creating a conducive environment to hone and retain talent.
 Providing customer delight.
 Institutionalizing system-approach in all aspects of functioning.
 Upholding highest standards of ethical values at all times.
  Values:
 
 Integrity
 Commitment
 Passion
 Seamlessness

Birla Sun Life Asset Management Company has one of the largest team of research
analysts in the industry, dedicated to tracking down the best companies to invest in.
BSLAMC strives to provide transparent, ethical and research-based investments and
wealth management services

Birla Sun Life Asset Management Company follows a long-term, fundamental research
based approach to investment. The approach is to identify companies, which are excellent
growth prospects and strong fundamental. The fundamental include the quality of the
company management, sustainability of its business model and its competitive position,
amongst other factor.

The fund has more than 224 schemes with AUM of Rs. 49983.17 Cr.
 BIRLA SUN LIFE 95-GROWTH FUND

Fund objective:
An open-ended balanced scheme with the objective of long term growth of capital and
current income, through a portfolio of equity and fixed income securities. The Birla Sun
Life 95- Growth seeks to achieve long- term capital appreciation and current income from
a balanced portfolio with a target allocation of 60% equity, 40% debt and money market
securities.

Fund Manager: “Mr. Nishit Dholakia”

Fund Profile
Returns Period Returns (%)
1-Month 4.5
Latest NAV 47.56(31/03/2010) 3-Month 4.7
52- Week High 49.63(29/03/2010) 6-Month 7.6
52- Week Low 38.09(01/04/2009) 1-year 36.6
Fund Category Hybrid: Equity 2-year 28.5
Oriented 3-year 12.8
Fund Type Open-Ended 5-year 21.1
Launch Date February 1995
Risk Grade Average
Return Grade Above Average
Net Assets (Cr) 253.85
(28/02/2010)
Table 18: Fund Profile Of BSL 95- Table 19: Returns Of BSL 95-
Growth Fund Growth Fund

Sector Allocation Asset Allocation

Top 5 Sectors % Net Asset As on % Net Asset

As on 28/02/2010 28/02/2010
Financial 13.70
Services 7.90 Equity 66.09
Diversified 7.62
FMCG 6.03 Debt 4.74
Metals 5.54
Table 20: Sector Allocation Of BSL Others 29.16
Table 21: Asset Allocation Of BSL
95-Growth Fund 95- Growth Fund
 Portfolio Top Holdings
Company Sector Mkt.Value*(Rs. In % of
Cores) Asset
Equity Shares
RALLI INDIA Pesticide 87.46 3.48
TRENT Retailing 78.64 3.23
ICICI BANK Banks 72.52 3.10
INFOSYS TECH IT- Software 63.64 2.86
AXIS BANK Petroleum Products 61.64 2.51
RELIANCE Banks 53.59 2.43
HDFC BANK Banks 50.04 2.11
ALLHABAD BANK Banks 48.68 1.97
NESTLE LTD Consumer Non 38.49 1.92
Durables
HIND. ZINC Non Ferrous 38.40 1.52
Metals
CROMPTION GR. Industrial Capital 37.41 1.51
Goods
LUPIN LTD Pharmaceuticals 36.64 1.47
TO POWER AEC Power 35.92 1.44
HCL TECH IT- Software 35.96 1.42
ITC LTD Consumer Non 35.20 1.39
Durables
WIPRO LTD IT- Software 34.43 1.36
Debt
Company Instrument Mkt.Value* (Rs. In % of
Cores) Asset
INDUSTRIAL DEVELOPMENT Bond 7.30 2.88
BANK OF INDIA LTD
7.02 GOI Securities 4.37 1.87
Table 22: Portfolio Holdings of BSL 95- Growth Fund

History Birla Sun Life 95- Growth Fund

2009 2008 2007 2006 2005 NA

NAV 38.09 46.4 25.2 19.38 13.9 NA
0 7 9
Total Return -17.90 83.6 29.0 39.97 NA NA
0 3
+/- S&P CNX 3.15 -8.90 1.87 26.45 9.72 28.16
Nifty
Net Assets Rs. Cr. 142.7 170. 92.0 104.6 115. NA
9 8
 Table 23: History of BSL 95-Growth Fund

ANALYTICAL TOOLS:

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. Risk associated with a
fund, in a general, can be defined as variability or fluctuations in the returns generated by
it. The higher the fluctuations in the returns of a fund during a given period, higher will
be the risk associated with it. These fluctuations in the returns generated by a fund are
resultant of two guiding forces. First, general market fluctuations, which affect all the
securities, present in the market, called market risk or systematic risk and second,
fluctuations due to specific securities present in the portfolio of the fund, called
unsystematic risk. The Total Risk of a given fund is sum of these two and is measured in
terms of standard deviation of returns of the fund. In order to determine the risk-adjusted
returns of investment portfolios, several eminent authors have worked since 1960s to
develop composite performance indices to evaluate a portfolio by comparing alternative
portfolios within a particular risk class. But before that we need to understand all the
components that are used to explain the ratios like Beta, Alpha, Treynor, Sharpe, and
Jensen etc. the components are as follows:

 Net Asset Value (NAV):

A mutual fund is a professionally-managed firm of collective investments that pools
money from many investors and invests it in stocks, bonds, short-term money market
instruments, and/or other securities. In other words we can say that A Mutual Fund is a
trust registered with the Securities and Exchange Board of India (SEBI), which pools up
the money from individual / corporate investors and invests the same on behalf of the
investors /unit holders, in equity shares, Government securities, Bonds, Call money
markets etc., and distributes the profits.

The value of each unit of the mutual fund, known as the net asset value (NAV), is mostly
calculated daily based on the total value of the fund divided by the number of shares
currently issued and outstanding. The value of all the securities in the portfolio in
calculated daily. From this, all expenses are deducted and the resultant value divided by
the number of units in the fund is the fund’s NAV.

NAV = Total value of the fund

No. of shares currently issued and outstanding
  Factors affecting NAV:

 Variation in investment portfolio:

Variation in the investment portfolio causes changes in the NAV of the fund, which in
turn may affect the overall value of the fund. Since, same investment portfolios with
different NAV gives same returns in percentage terms, therefore, the securities that we
have in the portfolio play pivotal importance. Changing the portfolio or replacing any
security with the existing security may change the overall NAV of the fund, which in turn
may change the value of the entire fund.

 Sale and repurchase of units:

Sale and repurchase of any unit that we have in our portfolio changes the overall NAV of
the fund. For example, we have a portfolio in which the security A is priced at Rs 100.
We sell this security and after one week when the price of the security becomes Rs 80 we
buy it, keeping all other investments intact, then the NAV of the portfolio will come
down, which in turn will result in better valuation for the fund. Therefore, sale and
repurchase also affects the NAV of the fund.

 Valuations of assets:

The value that the underlying asset has, whose portfolio the fund has managed or is
managing, if the value of that asset changes, it can change the overall NAV of the fund.

 Cost associated with the Fund:

The cost associated with the fund also affects the NAV of the fund. All the charges
accumulated during the selling of a security are known as Sales charges. Funds with low
expense ratios are always preferred as they decrease the overall cost of the security.

 BETA :

It is a ratio that measures the market risk of securities or a fund. If the beta ratio exceeds
one, the fund is more sensitive than funds in general to the fluctuations of the stock
market. The beta may also be negative, which means that the value of the fund will, on
average, move to the opposite direction than the general market development. Beta
measures the sensitivity of rates of return on a fund to general market movements. It also
measures the volatility of the fund, as compared to that of the overall market. The
Market's beta is set at 1.00; a beta higher than 1.00 is considered to be more volatile than
the market, while a beta lower than 1.00 is considered to be less volatile. Beta measures
the systematic risk and show how price of security respond to the market foresees. It is
calculated by relating the return on security with return for market.

β = n  XY – ( x  y) / n  x – (x)²

Where, X =index return, Y = fund return

 Alpha:
It measures the stock unsystematic return and it is average return independent of market
return. It is calculated by comparing the funds actual performance with the risk adjusted
expected return.

= Y-β*X

Where, X =index return, Y = fund return

 Standard Deviation:
Standard deviation is a representation of the risk associated with a given security stocks,
bonds, property, etc. or the risk of a portfolio of securities. Risk is an important factor in
determining how to efficiently manage a portfolio of investments because it determines
the variation in returns on the asset and/or portfolio and lives investors a mathematical
basis for investment decisions. The overall concept of risk is that as it increases, the
expected return on the asset will increase as a result of the risk premium earned higher
return on an investment when said investment carries a higher level of risk. S.D is used to
measure the variability of return i.e. the variation between the actual and expected return.

σ = √ y²/n

It is used to measure the variation in the individual return from the average expected
return over a certain period. Standard deviation is used in the concept of risk of a
portfolio of investment. Higher the Standard Deviation means a greater fluctuation in
expected return.

 SHARPE RATIO:

A Sharpe ratio developed by Nobel laureate William. F. Sharpe (1966) to measure risk
adjusted performance. Sharpe’s performance index gives a single value to be used for the
performance ranking of various funds of portfolios. Sharpe’s index measures the risk
premium of the portfolio relative to the total amount of risk in the portfolio. This risk
premium is the difference between the portfolio’s average rate of return and the riskless
rate of return. The standard deviation of the portfolio indicates the risk. The index assigns
the highest values to assets that have risk-adjusted average rate of return.

S = rP – rf /p

Where,

S = Sharpe's Index

p = The standard deviation of the portfolio.

RP = Return of the portfolio.

R f = Risk free rate of return. (*Risk free rate of return is taken as 7.73% p.a.)

While a high and positive Sharpe Ratio shows a superior risk-adjusted performance of a
fund, a low and negative Sharpe Ratio is an indication of un-favourable performance. If
the Sharpe figure is positive, the risk taken has paid off, and if the figure is negative, the
returns are lower than the risk-free rate.

 TREYNOR RATIO:

“Jack Treynor” (1965) was the first researcher developing a composite measure of
portfolio performance. To understand the Treynor index, an investor should know the
concept of characteristic line. The fund’s performance is measured in relation to the
market performance. The ideal fund’s return rises at a faster rate than the general market
performance when the market is moving upwards and its rate of return declines slowly
than the market return, in the decline. It measures portfolio risk with beta, and calculates
portfolio’s market risk premium relative to its beta. This ratio rewards volatility because
it shows risk adjusted returns per unit of market risk for that particular scheme. When the
markets are more volatile, schemes with high Treynor ratio are highly affected and vice
versa. A scheme with high Treynor ratio such as Equity scheme will enjoy a premium
when the markets are bullish and will be affected negatively when the markets are
bearish. On the other hand, scheme with low Treynor ratio such as Debt Fund will not be
affected greatly, irrespective of the bullish or bearish run in the markets.
Tn =rP – rf /p

Where

Tn = Treynor's index

RP = Return of the portfolio.

R f = Risk free rate of return.

p = beta coefficient of portfolio.

All risk-averse investors would like to maximize this value. While a high and positive
Treynor Index shows a superior risk-adjusted performance of a fund, a low and
negative Treynor Index is an indication of unfavorable performance. The trouble with
both Sharpe and Treynor ratios for evaluating "risk-adjusted" returns is that they
equate risk with short-term volatility. Therefore these measures may not be applicable
in evaluating the relative merits of long-term investments.

 JENSEN MEASURE:
The absolute risk adjusted return measure was developed by “Michael Jensen” and
commonly known as Jensen’s measure. It is mentioned as a measure of absolute
performance because a definite standard is set and against that the performance is
measured. The standard is based on the manager’s predictive ability. Successfully
prediction of security price would enable the manager to earn higher returns than the
ordinary investor expects to earn in a given level of risk. Sharpe and Treynor index
models provide measures for ranking the relative performance of various portfolios on a
risk-adjusted basis according to Jensen equilibrium average return on a portfolio would
be a benchmark. Equilibrium average return of the portfolio by the market with respect to
systematic risk to portfolio should earn with the systematic return.

Rp =α + (rm - rf ) p

Where,

Rp= average return of the portfolio.

rf = risk free return

rm= average market return

β= A measure of systematic

= Y-βX

If the alpha is positive, the portfolio has performed better and if alpha is negative it
has not shown performance up to the benchmark, i.e. the market Index.
Performance Evaluation AXIS Equity- Growth Fund
X(nifty) (X) ² Y(return) (Y) ² XY y y²
3.15 9.92 -13.74 188.78 -43.28 -37.55 1410
-8.90 79.21 47.48 2254.35 -372.57 23.67 560.26
1.87 3.49 22.78 518.92 42.59 -1.03 1.06
26.45 699.60 40.22 1617.64 1163.81 16.41 269.28
9.72 94.47 22.34 499.07 217.14 -1.47 2.16

X=32.3 (X) Y (Y)  XY 0 

1 ²=886.69 =119.08 ²=5078.76 =1007.69 y²=2242.7
6
Table 24: Performance Evaluation Of Axis Equity Growth Fund

X =X / N=>32.31/5= >6.46

Y= Y / N=>119.08/5=>23.81

y=Y-Y

X = Index return

Y = Fund return

N= No. of years

1. BETA :

β = n  XY – ( x  y) / n  x – (x)²
β = 1190.98/3389.55
β = 0.35

2. Alpha:

= Y-βX

= 23.81- 0.35*6.46
 =21.55

3. Standard Deviation:

σ = √ y²/n

σ = √ 2242.76/5

σ = 21.17

4. Sharpe's index:

Sp = RP – Rf /p

rf = 7.73%, p = 21.17, RP= 23.81

Sp= 23.81-7.73/21.17

Sp =0.75

5. TREYNOR:
Tn = rP – rf /p

β = 0.35, rf= 7.73, rP = 23.81

Tn= 23.81-7.73/0.35

Tn = 45.94

6. JENSEN:
Rp =α + (rm - rf )

β = 0.35, rf= 7.73,  = 21.55, rm = 6.46

Rp= 21.55 - 0.44

Rp = 21.10
Performance Evaluation OF HDFC Equity Growth Fund

X(nifty) (X) ² Y(return) (Y) ² XY y y²

3.15 9.92 -15.63 244.29 -49.23 -48.44 2346.43
-8.90 79.21 53.61 2874.03 -477.12 20.8 432.64
1.87 3.49 35.86 1285.93 67.05 3.05 9.30
26.45 699.60 62.70 3931.29 1658.41 29.89 893.41
9.72 94.47 27.53 757.90 267.59 -5.28 27.87

X=32.3 (X) Y (Y)  XY 0 

1 ²=886.69 =164.07 ²=9093.44 =1466.70 y²=3709.6
5
Table 25: Performance Evaluation Of HDFC Equity Growth Fund

X =X / N=>32.31/5= >6.46

Y= Y / N=>164.07/5=>32.81

y=Y-Y

X = Index return

Y = Fund return

N= No. of years

1. BETA :

β = n  XY – ( x  y) / n  x – (x)²
β = 2032.4/3389.55=> 0.59

2. Alpha:

= Y-βX
= 32.81- 0.59*6.46=>29

3. Standard Deviation:
 σ = √ y²/n

σ = √ 3709.65/5

σ = 27.23

4. Sharpe's index:

Sp = RP – Rf /p

rf = 7.73, p = 27.23, RP= 32.81

Sp= 32.81-7.73/27.23

Sp =0.92

5. TREYNOR:
Tn = rP – rf /p

β = 0.59, rf= 7.73, rP = 32.81

Tn= 32.81-7.73/0.59

Tn = 42.50

6. JENSEN:
Rp =α + (rm - rf ) 

β = 0.59, rf= 7.73,  = 29, rm = 6.46

Rp= 29 - 0.74

Rp = 28.26

Performance Evaluation Of Birla Sun Life 95- Growth Fund

X(nifty) (X) ² Y(return) (Y) ² XY y y²
3.15 9.92 -17.90 320.41 -56..38 -51.57 2659.46
-8.90 79.21 83.60 6988.96 -744.04 49.93 2493
1.87 3.49 29.03 842.74 54.28 -4.64 21.52
26.45 699.60 39.97 1597.60 1057.20 6.3 39.69

X=22.5 (X)  Y =134.7 (Y)  XY 0 

7 ²=792.22 ²=9749.71 =310.98 y²=5213.6
7
Table 26: Performance Evaluation Of BSL 95-Growth Fund

X =X / N=>22.57/4= >5.64

Y= Y / N=>134.7/4=>33.67

y=Y-Y

X = Index return

Y = Fund return

N= No. of years

1. BETA :

β = n  XY – ( x  y) / n  x – (x)²
β = -1796.25/2659.48
β = - 0.67

2. Alpha:
= Y-βX

= 33.67-(-0.67*5.64)=>33.67+3.77=>37.44

3. Standard Deviation:

σ = √ y²/n
 σ = √ 5213.67/4

σ = 36.10

4. Sharpe's index:

Sp = RP – Rf /p

rf = 7.73, p = 36.10, RP= 33.67

Sp = 33.67-7.73/36.10

Sp = 0.71

5. TREYNOR:
Tn = rP – rf /p

β = -0.67, rf= 7.73, rP = 33.67

Tn= 33.67-7.73/-0.67

Tn = -38.71

6. JENSEN:

Rp = α + (rm - rf ) 

β = -0.67, rf= 7.73,  =37.44, rm = 5.64

Rp = 37.44+1.40

Rp = 38.84

Comparison Of AXIS, HDFC, Birla Sun Life Equity

Growth Mutual Funds
Analysis Of Mutual Fund On The Bases Of Treynor's Index:

MUTUAL FUND TREYNOR'S INDEX

Axis Equity Growth Fund 45.94
HDFC Equity Growth Fund 42.50
Birla Sun Life 95- Growth Fund -38.71
Table 27: Treynor’s index of Axis, HDFC, BSL Mutual Funds

Treynor,s Index
60
45.94
42.5
40

20
Treynor,s Index
0

-20

-40
-38.71

-60

Chart 1: Treynor's Index Analysis

INTERPRETATION:

This shows the risk adjusted return. In this case Axis Equity Growth Fund have the
maximum i.e. 45.94 index value in comparison to the other two i.e. HDFC Equity Growth
Fund and Birla Sun Life 95- Growth fund. So we can say that the Axis Equity Growth
fund is the best fund as it provides the maximum risk premium in comparison to the other
two funds.
Analysis of Fund On The Bases Of Sharpe's Index:

MUTUAL FUND SHARPE'S INDEX

Axis Equity Growth Fund 0.75
 HDFC Equity Growth Fund 0.92
Birla Sun Life 95- Growth Fund 0.71
Table 28: Sharpe’s index of Axis, HDFC, BSL Mutual Funds

1
Sharpe's Index
0.92
0.9
0.8 0.75
0.71
0.7
0.6
0.5 Sharpe,s Index
0.4
0.3
0.2
0.1
0

Chart 2: Sharpe's Index Analysis

INTERPRETATION:
Sharpe shows the risk adjusted return. Higher the Sharpe Index better the fund. In this
case HDFC Equity Growth Fund has the maximum value i.e.0.92 in comparison to other
fund i.e. Axis Equity Growth Fund and Birla Sun Life 95- Growth Fund. So we can say
that the HDFC Equity Growth Fund is the best fund amongst the three funds.

Analysis Of Fund On The Bases Of Jensen's Index:

MUTUAL FUND JENSEN'S INDEX

Axis Equity Growth Fund 21.1
HDFC Equity Growth Fund 28.26
Birla Sun Life 95- Growth Fund 38.84
 Table 29: Jensen’s Index Of Axis, HDFC, BSL Mutual Funds

Jensen's Index
45
40 38.84
35
30 28.26
25 21.1 Jensen,s Index
20
15
10
5
0

Chart 3: Jensen's Index Analysis

INTERPRETATION:

This shows the risk adjusted return. In this case Birla Sun Life 95- Growth Fund have the
maximum i.e. 38.84 index value in comparison to the other two i.e. HDFC Equity Growth
Fund and Axis Equity Growth Fund. So, we can say that the Birla Sun Life 95- Growth
Fund is the best fund as it provides the maximum risk premium in comparison to the
other two funds.

TREND ANALYSIS:

To apply the statistical tool in this project TREND ANALYSIS is the most effective tool
which is applied here when estimates of future conditions are made on a systematic basis,
the process is referred as “forecasting” and the figure or statement obtained is known as
“forecast”. In this world of uncertainness, economic decision rest upon a forecast of
future condition. Forecasting is concerned with mainly two tasks:
 1. To determination of best basis available for formation of intelligent managerial
expectations,

2. Handling of uncertainty about future.

UTILITY OF TREND ANALYSIS:

 To study the past behaviour of data

 To forecast the future behaviour
 Estimation of Trade Cycles
 Comparison with other Time Series
 Study of present variations

Trend is usually of two types:

1. Linear trend:
y = a + bx

2. Parabolic trend:
y= a + bx + cx

TREND ANALYSIS OF AXIS MUTUAL FUND NAV:

 YEAR EXPECTED ACTUAL
2005 21.17 20.80
YEAR NAV (Y) Deviations from XY x2
2006 27.48 26.15
(07) (X)
2007 33.79 32.56
2005 2008
20.80 40.10
-2 48.02
-41.6 4
2009 46.41 41.42
2006 26.15 -1 -26.15 1
2010 52.72
2007 2011
32.56 59.03
0 0 0
2008 48.02 1 48.02 1
2009 41.42 2 82.84 4
N=5 Y= X=0 XY=63.11  x2 =10
168.95

Table 30: Trend Analysis Of Axis Mutual Fund NAV

The equation of the straight line trend is

Y= a + bx

Since X=0, a = Y/ N, b = XY/  x2

Substituting values, we get

a = 168.95/5 = 33.79; b = 63.11/10 = 6.31

Thus the straight line trend is

Y= 33.79 + 6.31(X), X unit = 1 Year

 Table 31: Expected and Actual NAV Of Axis Mutual Fund

70

60

50

40
Expected
30 Actual

20

10

0
2005 2006 2007 2008 2009 2010 2011

Chart 4: Trend of AXIS Mutual Fund NAV

INTERPRETATION:

This chart shows that actual values are according to the expected values. There are minor
differences in between these values. In 2005 the expected value was 21.17and actual
value was 20.80, in 2009 the expected value was 46.41 and actual value was 41.42. So,
we can say that Axis Mutual Fund NAV trends according to their standards.

TREND ANALYSIS OF HDFC MUTUAL FUND NAV:

 YEAR EXPECTED ACTUAL
YEAR 2005
NAV(Y) 73.66from
Deviations XY65.77 x2
2006 109.82 107.01
(07) (X)
2007 145.98 145.39
2005 2008
65.77 182.14
-2 223.32
-131.54 4
2009 218.30 188.42
2006 107.01
2010 -1
254.46 -107.01 1
2011 290.62
2007 145.39 0 0 0
2008 223.32 1 223.32 1
2009 188.42 2 376.84 4
N=5 Y= X=0 XY=361.61  x2 =10
729.91

Table 32: Trend analysis of HDFC Mutual Fund NAV

The equation of the straight line trend is

Y= a + bx

Since X=0, a = Y/ N, b = XY/  x2

Substituting values, we get

a = 729.91/5 = 145.98; b = 361.61/10 = 36.16

Thus the straight line trend is

Y= 145.98 + 36.16(X), X unit = 1 Year

 Table 33: Expected and Actual NAV of HDFC Mutual Fund

350

300

250

200
Expected
150 Actual

100

50

0
2005 2006 2007 2008 2009 2010 2011

Chart 5: Trend of HDFC Mutual Fund NAV

INTERPRETATION:

This chart shows that actual values are according to the expected values. There are minor
differences in between these values. In 2005 the expected value was 73.66 and actual
value was 65.77, in 2009 the expected value was 218.30 and actual value was 188.42. So,
we can say that HDFC Mutual Fund NAV trends according to their standards.

TREND ANALYSIS OF BSL MUTUAL FUND NAV:

YEAR NAV (Y) Deviations from XY x2
(07) (X)
2005 13.99 -2 -27.98 4
2006 19.38 -1 -19.38 1
2007 25.27 0 0 0
2008 46.40 1 46.40 1
2009 38.09 2 76.18 4
N=5 Y= X=0 XY=75.22  x2 =10
143.13

Table 34: Trend Analysis Of BSL Mutual Fund NAV

The equation of the straight line trend is

Y= a + bx

Since X=0, a = Y/ N, b = XY/  x2

Substituting values, we get

a = 143.13/5 = 28.62; b = 75.22/10 = 7.52

Thus the straight line trend is

Y= 28.62 + 7.52(X), X unit = 1 Year

YEAR EXPECTED ACTUAL

2005 13.58 13.99
2006 21.10 19.38
2007 28.62 25.27
2008 36.14 46.40
2009 43.66 38.09
2010 51.18
2011 58.70
 Table 35: Expected and Actual NAV of BSL Mutual Fund

70

60

50

40
Expected
30 Actual

20

10

0
2005 2006 2007 2008 2009 2010 2011

Chart 6: Trend of BSL Mutual Fund NAV

INTERPRETATION:

This chart shows that actual values are according to the expected values. There are minor
differences in between these values. In 2005 the expected value was 13.58 and actual
value was 13.99, in 2009 the expected value was 43.66 and actual value was 38.09. So,
we can say that Birla Sun Life Mutual Fund NAV trends according to their standards.

“ANALYSIS OF INVESTORS PERCEPTION

TOWARDS INVESTMENT IN AXIS MUTUAL FUND”
 (1).What is your Age?

Age Group No. Of Respondents

Table 36:
(in years) No. if
investor’s at 20-30 62 different
Age Group 30-40 23
40-50 10
Above 50 05

Age
20-30 30-40 40-50 Above 50

5%
10%

23%

62%

Interpretation:

As per the above pie chart the 62% of respondents who are below 30 years, the
persons within the age group of 30-40 years only 23% and the persons between the
age group 40-50 are 10% of respondents. The persons having the age equal to or
above 50 years, only 05% of respondents.
Chart 7: Analysis according to Age

(2).What is your Occupation?

 Occupation No. Of Respondents
Professional 08
Salaried 30
Business 48
Table 37:
Retired 03 No. of
investor’s Others 11 having
different Occupation

60

50 48

40
30 Column1
30

20
11
10 8
3
0
Professional Salaried Business Retired Others

Chart 8: Analysis according to Occupation

Interpretation:

As per the above Bar chart from Occupation group out of 100 investors, the 48% of
respondents are Business-Man, 30% are Employees or Salaried-Man, 08% are
Professional, 03% are Retired person and 11% are in other.

(3).What is your monthly family income approximately?

 Income No. Of
(in Rs.) Respondents
Up to Rs.10,000 05
Rs.10,001 to 15000 28
Rs.15,001 to 20,000 42
Rs.20,001 to 30,000 15
Table 38: No. Rs.30,001 and above 10 of investor’s
at different Income Level

Income

Up to Rs.10,000
Rs.10,001 to 15000
15% 28% Rs. 15,001 to 20,000
10% 5% Rs. 20,001 to 30,000
Rs. 30,001 and above

42%

Interpretation:

It is clear from the above pie chart that Income Group of the investors of kaithal, out
of 100 investors, 42% investors that is the maximum investors are in the monthly
income group Rs.15,001 to Rs. 20,000, Second one i.e. 28% investors are in the
monthly income group of Rs.10,001 to Rs. 15,000 and the minimum investors i.e.
05% are in the monthly income group of below Rs. 10,000.
Chart 9: Analysis according to Income

(4).Are you aware about AXIS MUTUAL FUND and their

operations?
 Yes No

No. Of Respondents

Yes 78

No 22

Awareness Of Axis Mutual Fund

NO
22%

YES
78%
YES NO

Table 39: Investor’s awareness towards Axis MF Chart 10: Analysis awareness of
Axis MF

If yes, how did you know about Axis Mutual Fund?

 Source Of Awareness
1%
12%

6%
Advertisement
Internet
Banks
Financial Advisors
49% Other

32%

Interpretation:

From the above chart it can be inferred that the Financial Advisor is the most
important source of information about Axis Mutual Fund. Out of 100 Respondents,
49% know about Mutual fund Through Financial Advisor, 32% through Bank, 12%
through Advertisement, 06% and 01% from internet and other sources.

Source No. Of Table 40: No. of investor’s from where

Chart 11: Analysis source of
Respondents awareness they know about Axis
Advertisement 09 MF
Internet 05
Banks 25 (5). Have you invested in AXIS
Financial Advisors MUTUAL FUND?
38
Other 01 Yes
No

No. Of
Invested In Axis Mutual Fund
Respondents
70
NO
30%

Yes
YES
70%

No 30 YES NO

Table 41: Investment decision of investor’s

Chart 12: Analysis Investment Decision Of .
Investor’s

If NOT invested in Axis Mutual Fund, you do so because?

 Reasons
10%

3%
Lack of knowledge about Axis
mutual fund
Axis MF gives less return
compared to the others.
17% Enjoys investing in other options

No trust over the fund managers

60% Others

10%

Interpretation:

As per the above table and pie chart the 70% of respondents is to be invested in axis
Reasons
mutual fund and 30No.
% outOfof 100 total respondents say they are not investing their
Respondents
money in axis mutual fund. The main reason behind it they have lack of knowledge
(60%)
Lack about Axis mutual fund except this 17% investors enjoys investing in other
of knowledge 18
options.
about And only 03% respondents says they have no trust over the fund managers.
Axis mutual
fund Table 42: Investor’s who not invested in Axis
MF Chart 13: Analysis who not invested
Axis MF gives less 03 in Axis MF
return compared to
the others.
(6). If you invested in AXIS
Enjoys investing in 05
other options MUTUAL FUND what is
No trust over the 01 your investment objective?
fund managers
Others 03
 Investment No. Of Respondents
Objective
Safety 15
Good Return 42
Tax Benefit 08
Liquidity Table 43:
03 Investment
Others 02 objective of
Axis MF
investor

Interpretation:

It can be seen from the following graph that the main investment objective of most of
the investors is good return (60%), 21% and 12% of respondents has to invest their
money in axis mutual fund for safety and tax benefit. Only 03% of respondents has
the others objective towards investing in axis mutual fund.

Investment Objective
4% 3%
21%
11%
Safety
Good Return
Tax Benefit
Liquidity
Others

60%

Chart 14: Analysis investment objective of Axis MF

(7).What is your Average investment period in AXISMF?

 Avg. No. Of
Investment Respondents
Period
Less than 6 months. 18
6 to 12 months 35 Table 44:
Avg. 12 months to 2 year. 10 investment
period of Axis MF
Investor
More than 2 year. 07

Avg. Investment Period

26%
14%
10%

Less than 6 months.

6 to 12 months
12 months to 2 year.

More than 2 year.

50%

Interpretation:

The above graph reflects the average investment period for all the 70 respondents.
From the study it can be concluded that majority of 35 respondents (50%) invest in
axis mutual fund from “6 to 12 months”. It is the most chosen option among all the
other options because of the current market condition people are not interested in
investing their money for short time like less than 6 months because return will be
very less in short time period and only18 respondents (26%) invest in axis mutual
fund for “less than 6 months”. Investment horizon of 10 and 07 respondents is “12
months to 2 year” and “more than 2 year.
Chart 15: Analysis of avg. investment period of Axis MF Investor

(8).What is your risk preference?

 Risk No. Of
Preference Respondents
High risk and high 20
return
Moderate risk and 42
Moderate return
Table 45: Risk Low risk and low 08 prefer by Axis
MF investor’s return

Column1

45
40
35
30
25
20 42
15
10 20
5 8
0
... .. ...
tu u.
re r et lo
w
gh e d
hi at an
er
an
d od ir sk
M w
ir sk d Lo
gh an
Hi ir sk
atChart 16: Analysis of risk prefer by Axis MF investor
e
der
o
M
Interpretation:

The following Bar chart explains that majority of 42 investors (60%) were ready
to take “Moderate level” of risk by investing in axis mutual fund and also rest of
them 20 respondents (29%) go for “High Risk and High Return” category. Only
08 respondents (11%) opt for “Low risk and low return” category that again
proved that it is a myth that Indian Investors are more risk averse when it comes
to investment in Mutual Funds.

(9).How much return do you expect from your Investment?

 Expected No. Of
Return Respondents
Up to 15% 20
15%-25% 30
25%-35% 12
More than 35% 08
Table 46:
Return expected by
various investor’s

Expected Return
Up to 15% 15%-25% 25%-35%
More than 35%

11%

29%
17%

43%

Chart 17: Analysis of expected return of Axis MF investor

Interpretation:

If any person invested their money in axis mutual fund they obviously look for
good return but if they want to earn high return than high risk is also associated
with it as above graph suggests that most of the respondents 43% choose the
return between 15% to 25% because they knows that the current market
condition its good return they can get and very few respondents 11% choose
more than 35% return which is actually very difficult to get.
(10). While investing in AXISMF which scheme (On The Basis Of
Structure) do you prefer?

Scheme Name No. Of

Respondents
Open Ended Scheme 58
Closed Ended Scheme 12 Table 47:
Scheme (By Structure) prefer by investor’s

Schemes
Open Ended Scheme Closed Ended Scheme

Closed Ended Scheme

17%

Open Ended Scheme

83%

Interpretation:

Above graph shows that when it comes to scheme preferences majority of the
investors prefer open ended scheme 83%. In open ended schemes they can enter
at any time or they can exit at any time. The Ratio of close ended schemes is
very low. It is only 17%.
Chart 18: Analysis of scheme (By Structure) prefer by

Axis MF Investor

(11). When you invest in AXISMF which investment scheme will

you prefer?
 Investment No. Of Respondents
Scheme
Equity Fund 40
Debt Fund 03
Balanced Fund 15
Fixed Maturity Plan 07
(FMPs) Table 48:
Others 05 Scheme (By
Investment)
prefer by
investor’s

Interpretation:

When it comes to investment scheme preferences majority of retail investors

prefer Equity Fund 57%, followed by Balanced Schemes 22% with 04% retail
investor preferring debt fund and 10% fixed income instruments like Fixed
Maturity Plans (FMPs). It shows that there is a huge potential for debt
instruments in the market which is unearthed by retail investors due to its
complexity, low awareness etc.

Investment Scheme

7%
10% Equity Fund

Debt Fund
Balanced Fund
21% 57% Fixed Maturity Plan (FMPs)
Others

4%

Chart 19: Analysis of scheme (By Investment) prefer by Axis MF investor

(12).Do you get influenced by the returns given by a fund or by
the current NAV of a fund?

Influenced By No. Of
Respondents
By NAV 20
By Returns 38
By Both 12
Table 49:

Column1
40 38

35

30

25
20
20

15
12
10

0
By NAV By Returns By Both

Interpretation:

Above Bar graph shows that most investor of axis mutual fund is to be
influenced by it returns 54.3% and 28.5% of investor is to be influenced only by
the NAV. The 17.2% of investor is to be influenced by both (By NAV and By
Returns).
Chart 20: Analysis of investor influenced behaviour of Axis MF

(13).From where do you purchase AXISMF?

 Source Of No. Of
Purchase Respondents
Directly from the 02
AMCs
From Brokers 48
From Banks 12 Table 50:
From where Other sources 08 investor’s
purchase Axis MF

Source Of Purchase

11% 3%

Directly from the AMCs

17%

From Brokers

From Banks
69%

Other sources

Interpretation:

From the above Pie Chart it is clear that the Brokers play a very important role
in the distribution channel of AMCS. Most of the respondents (69%) buy’s their
investment products from brokers. This shows the importance of brokers and
they also want to earn money so they gave good service to their investors and in
the return they get’s good business. Only few of the investors knows that they
can buy directly for AMCS so they can save their 03%.
Chart 21: Analysis of purchase decision of Axis MF investor

(14).From the following features of AXISMF that attracts you

most?
 Features No. Of Respondents

Diversification 20
Professional management 25
Reduction in risk and transaction cost 10
Helps in achieving long term goals 15

Table 51: No. of investor who liked the different feature of Axis MF

Interpretation:

Above graph reflects that respondents need diversification because through this
they can reduce their risk and enjoy investing in other options and the 20
respondents (29%) choose this feature. Out of 70 respondents 25 has to like the
feature Professional Management of Axis Mutual fund. The other features axis
mutual fund has also attract the investors.

Features

21%
29% Diversification
Professional management
Reduction in risk and transaction
cost
Helps in achieving long term goals

14%

36%

Chart 22: Analysis of Axis MF features

(15).How satisfied you are with your experience of investing in

Axis Mutual Fund?
 Satisfaction No. Of Respondents
Level
Highly Satisfied 13
Considerably 28
Satisfied
Reasonably Satisfied 22
Table 52: Satisfaction
Unsatisfied 05
level of Axis MF
investor’s Highly Unsatisfied 02

Interpretation:

Form above chart it can be inferred that up to this stage majority of respondents
40% are “Considerably Satisfied” when they were asked about overall
experience with Axis Mutual Funds including funds, returns, services etc., but it
remains to be seen that which category leads with the completion of survey
because second best categories with preferred by investors is “Reasonably
Satisfied” which means that there is more to do on Axis Mutual Fund behalf for
“Customer Satisfaction”.
Satisfaction Level
3%
7%
19%

Highly Satisfied
Considerably Satisfied
Reasonably Satisfied
31% Unsatisfied
Highly Unsatisfied

40%

Chart 23: Analysis of satisfaction level of Axis MF investor

Chapter-6

FINDINGS

FINDINGS
  Regarding Comparative Analysis Of Mutual Funds:

 PORTFOLIO:

 AXIS Equity Growth Mutual Fund has invest major part of portfolio in
13.70% sector.
 HDFC Equity Growth Mutual Fund has invest major part of portfolio in
Banking & Finance(22.15%) and Oil & Gas sector(15.32%).
 Birla Sun Life 95-Growth Fund has invest major part of portfolio in
Banking / Finance sector (13.70%).

 RETURN:

Tools/Companies AXIS Mutual HDFC Mutual Birla Sun Life

Fund Fund Mutual Fund
Beta 0.35 0.59 -0.67
SD 21.17 27.23 36.10
Alpha 21.55 29 37.44
Sharpe’s Index 0.75 0.92 0.71
Treynor’s Index 45.94 42.50 -38.71
Jensen’s Index 21.10 28.26 38.84

Above table shows that the HDFC MF have grater Beta as compare other fund. AXIS
and HDFC MF has more Sharpe’s and Treynor’s performance index as compare Birla
Sun Life Mutual Fund. So, I can say that the AXIS MF and HDFC MF is better than
Birla Sun Life MF.

 Regarding Investor Perception Of Axis Mutual Fund:

The study done was a tool to analyze the present setup and to know the investors
perception regarding investment in Axis Mutual Fund. The study proved fruitful and
many facts came to the light. The following were the findings of the study:

 In Kaithal City the 62% of respondents who are below 30 years, the persons
within the age group of 30-40 years only 23% and the persons between the age
group 40-50 are 10% of respondents. The persons having the age equal to or
above 50 years, only 05% of respondents.

 In Occupation group most of the Investors were Business man, the second most
Investors were Employees and the least were the retired person.

 In family Income group, between Rs. 15,001- 20,000 were more in numbers,
the second most were in the Income group of 10,001-15000 and the least were
in the group of below Rs. 10,000.

 Out of 100 Respondents, 49% know about Mutual fund Through Financial
Advisor, 32% through Bank, 12% through Advertisement, 06% and 01% from
internet and other sources.

 Among 100 Respondents only 70% had invested in Axis Mutual Fund and 30%
did not have invested in Axis Mutual fund.

 Out of 100 total 30 respondents say they are not investing their money in axis
mutual fund. The main reason behind it they have lack of knowledge (60%)
about Axis mutual fund except this 17% investors enjoys investing in other
options. And only 03% respondents says they have no trust over the fund
managers.

 The main investment objective of most of the investors is good return (60%),
21% and 12% of respondents has to invest their money in axis mutual fund for
safety and tax benefit. Only 03% of respondents has the others objective
towards investing in axis mutual fund.

 Regarding the average investment period from the 70 respondents 35

respondents (50%) invest in axis mutual fund from “6 to 12 months” and
only18 respondents (26%) invest in axis mutual fund for “less than 6
months”. Investment horizon of 10 and 07 respondents is “12 months to 2
year” and “more than 2 year.

 Out of 70, 42 investors (60%) were ready to take “Moderate level” of risk by
investing in axis mutual fund and also rest of them 20 respondents (29%) go for
 “High Risk and High Return” category. Only 08 respondents (11%) opt for
“Low risk and low return”

 From the 70 respondents 30 respondents choose their expected return

between15% to 25%, 20 respondents choose their expected return up to 15%,
12 respondents choose their expected return between 25% to 35% and 08
respondents choose more than 35% return.

 The most of investors prefer open ended scheme (83%) and the ratio of close
ended schemes is very low. It is only 17%.

 When it comes to investment scheme preferences majority of retail investors

prefer Equity Fund 57%, followed by Balanced Schemes 22% with 04% retail
investor preferring debt fund and 10% fixed income instruments like Fixed
Maturity Plans (FMPs).

 The most investor of axis mutual fund is to be influenced by it returns 54.3%

and 28.5% of investor is to be influenced only by the NAV. The 17.2% of
investor is to be influenced by both (By NAV and By Returns).

 From this study it is find that brokers play a very important role in the
distribution channel of AMCS. The 69% respondents buy’s their investment
products from brokers. Only the 03% investors buy’s their investment products
from AMCS.

 Out of 70, 20 respondents (29%) choose the feature of diversification and 25

respondents (36%) has to like the feature Professional Management of Axis
Mutual fund. The other features of axis mutual fund has also attract the 35%
investor.

 Form 70 respondents the majority of 28 respondents (40%) are “Considerably

Satisfied”, 22 respondents (31%) are “Reasonably Satisfied”, 13 respondents
are highly satisfied and 07 respondents are unsatisfied and highly unsatisfied
when they were asked about overall experience with Axis Mutual Fund.
 Chapter-7

CONCLUSION

CONCLUSION
The future of primary market is growing at a very high pace. Taking this thing into
consideration, there are lots of opportunities for the Axis Bank Pvt. Ltd. to tap the
golden opportunities from the Indian market. Axis bank has emerged a very strong player
in the field of distribution of financial product within a short period of one year time in
Northern India and is giving stiff competition to all the players in the market. It is
expanding its area of business, if the progress of AXIS MF goes in the same way, than I
can say that there is bright future for AXIS MF in coming years. They have much
potential to expand their distribution network in northern India.

The company is currently following huge investment and growth strategies. Apart from
the market growth rate the distribution industry doesn’t seem so attractive. Hence the firm
should be selective using growth strategies. This is not to undermine the bright future of
AXIS MF, just a check to be a cautious.

Running a successful Mutual Fund requires complete understanding of the

peculiarities of the Indian Stock Market and also the psyche of the small investors.
This study has made an attempt to understand the financial behaviour of Mutual Fund
investors in connection with the preferences of Brand (AMC), Products, Channels etc.
I observed that many of people have fear of Mutual Fund. They think their money will
not be secure in Mutual Fund. They need the knowledge of Mutual Fund and its
related terms. Many of people do not have invested in mutual fund due to lack of
awareness although they have money to invest. People only invest in those Companies
where they have faith or they are well known with them.

Distribution channels are also important for the investment in mutual fund. Financial
Advisors are the most preferred channel for the investment in mutual fund. They can
change investors’ mind from one investment option to others.

There is little awareness about mutual fund in India; people have accepted it as a one of
the major investment avenue. Mutual funds will become one of the sought after
investment avenues. As far as the other investment products marketed by AXIS MF are
concerned, they have a ready market. The only thing, which it needs to focus on, is that
they should have a strong network so that prompt services and availability of forms is
made available to the investor at a short notice, and if it keeps the traditional base for
marketing in India, which is a price sensitive market, we can say that AXIS MF has a
great future ahead.
 Chapter-8

SUGGESTIONS
&
RECOMMENDATION

SUGGESTIONS
&
 RECOMMENDATIONS

 Instead of going with the investment in the stock market directly they should go
with the mutual fund as in this case the level of risk is less.
 Investor should analysis the scheme before investing in fund, like Sharpe, Treynor,
Jensen.
 In the comparison of all three schemes the Axis MF scheme is the best scheme as
in the case Sharpe Index & Treynor Index is good.
 In BSL MF scheme they have mainly invest in banking sector (13.7%). So they
should go for proper portfolio diversification.
 Fund manager can invest in Real estate, power sector because from the last 2-3
years these sectors are in boom and giving very good return.
 Investor should read offer document before investing in to mutual fund.
 Instead of investing into the close ended mutual fund, money should invest into
open ended mutual fund as in case there is no lock in period.
 The investor should evaluate not only the returns on the scheme but also the NAV
fluctuations.
 The most vital problem spotted is of ignorance. Investors should be made aware of
the benefits. Nobody will invest until and unless he is fully convinced. Investors
should be made to realize that ignorance is no longer bliss and what they are
losing by not investing.
 Mutual Fund Company needs to give the training of the Individual Financial
Advisors about the Fund/Scheme and its objective, because they are the main
source to influence the investors.
 Younger people aged under 40 will be a key new customer group into the future,
so making greater efforts with younger customers who show some interest in
investing should pay off.
*BIBLIOGRAPHY*

BIBLIOGRAPHY
 Books:

 Gupta S.P., Statistical Methods-Sultan chand publications, 30 th edition– (Page

378-418).
 Tata Mcgraw Hill- Schaums statistics outline- (Page 152- 155, 175-185).
 Fisher & Jordan: security analysis & investment management- (Page 321-338).
 Pandian Punitawathy : Security Analysis & portfolio management – ( Page 145-
165, 180-186).
 Beri G.C.- Marketing Research 3rd edition- (Page 94, 98-101).
 Kothari C.R.- Business Research Methodology – (Page 138-146).
 Pandey I.M.-Financial Management by Vikas Publishing House- (Page 6.23-6.57).
 Srivastva Management of Indian Financial Institutions- Himalya Publishing House
6th edition– (Page 272-285, 313 to 335).

 Magazine & Journals/ Newspaper:

 Economic & political weekly April-2009 – Article by V.S. Sharma- (Page 23-25).
 Indian journal of commerce-Jun, 2010
 MBA review-Sep,2009
 Journal of finance-Feb,2010
 Facts for you-Jan,2010
 The Management Accountant - April 2010
 Southern Economist - December 15, 2009
 SEBI Bulletin – July, 2009
 Charter financial analysis-Jan, 2010
 Journal of finance-Dec, 2009
 ICFAI reader-July2008, Feb.2009
 Business world-May2009
 Annual Report Of Axis Bank Ltd. 2010

 Websites:
 www.mutualfundsindia.com
 www.amfiindia.com
 www.valueresearchonline.com
 www.bseindia.com
 www.nseindia.com
 www.crisil.com
 www.moneycontrol.com
 www.crisilratings.com
 www.axismf.com
 www.hdfcmf.com
 www.bslmf.com
 *ANNEXURE *

QUESTIONNAIRE
I am doing MBA at MM Institute Of Management, MMU-
 MULLANA (AMBALA) and this is to acknowledge that the
following survey is purely for academic purpose. My project topic is
about knowing the “INVESTORS PERCEPTION TOWARDS
INVESTMENT IN AXIS MUTUAL FUND”. The identity of the
respondent will be kept confidential. And it does not carry any
commercial value.

Name: ...…………………….. Phone: ...……………………..

(1).What is your Age? Pl tick (√).

A. 20-30 B. 30-40 C. 40-50 D. Above 50

(2).What is your Occupation? Pl tick (√)

A. Professional B. Salaried C. Business

D. Retired E. Others

(3).What is your monthly family income approximately? Pl tick (√).

A. Up to Rs.10,000 B. Rs.10,001 to 15000

C. Rs. 15,001 to 20,000 D. Rs. 20,001 to 30,000

E. Rs. 30,001 and above

(4).Are you aware about AXIS MUTUAL FUND and their operations?

Yes No

If yes, how did you know about Axis Mutual Fund? Pl tick (√).

A. Advertisement B. Internet

C. Banks D. Financial Advisors

E. Other
(5). Have you invested in AXIS MUTUAL FUND? Pl tick (√).

Yes No

If NOT invested in Axis Mutual Fund, you do so because Pl. tick (√).
 A. Lack of knowledge about Axis mutual fund

B. Axis MF gives less return compared to the others.

C. Enjoys investing in other options

D. No trust over the fund managers E. Others

(6). If you invested in AXIS MUTUAL FUND what is your investment objective
? Pl. tick (√)

A. Safety B. Good Return C. Tax Benefit

D. Liquidity E. Other

(7).What is your Average investment period in AXISMF? Pl. tick (√).

A. Less than 6 months. B. 6 to 12 months.

C. 12 months to 2 year. D. More than 2 year.

(8).What is your risk preference? Pl. tick (√).

A. High risk and high return B. Moderate risk and Moderate return

C. Low risk and low return

(9).How much return do you expect from your Investment? Pl. tick (√).

A. Up to 15% B. 15%-25%

C. 25%-35% D. More than 35%

(10).While investing in AXISMF (On The Basis Of Structure) which scheme do

you prefer? Pl tick (√).

A. Open Ended Scheme B. Closed Ended Scheme

(11).When you invest in AXISMF which investment scheme will you prefer? Pl
tick (√).

A. Equity Fund B. Debt Fund C. Balanced Fund

 D. Fixed Maturity Plan (FMPs) E. Others

(12).Do you get influenced by the returns given by a fund or by the current NAV
of a fund? Pl. tick (√).

A. By NAV B. By Returns C. By Both

(13).From where do you purchase AXISMF? Pl tick (√).

A. Directly from the AMCs B. From Brokers

C. From Banks D. Other sources

(14).Please tick (√) any one from the following features of AXISMF that attracts
you most?

A. Diversification

B. Professional management

C. Reduction in risk and transaction cost

D. Helps in achieving long term goals

(15).How satisfied you are with your experience of investing in Axis Mutual
Fund? Pl. tick (√).

A. Highly Satisfied B. Considerably Satisfied C. Reasonably Satisfied

D. Unsatisfied E. Highly Unsatisfied

THANK YOU