SYNOPSYS

SUBMITTED BY

(P.SUBASH CHANDRA BOSE) Roll: A09120365 TITLE: AN ENQUIRY IN TO THE FUNCTIONING OF MUTUAL FUNDS (AMBEDKAR OPEN UNIVERSITY) Organization: INDIA INFOLINE (2010-2012)

CHAPTER PLAN

INTRODUCTION: NEED FOR THE STUDY OBJECTIVE OF THE STUDY SCOPE OF THE STUDY RESEARCH METHODOLOGY LIMITATION

INTRODUCTION
INTRODUCTION TO MUTUAL FUNDS
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 realised are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. The flow chart below describes broadly the working of a Mutual Fund.

A Mutual Fund is a body corporate registered with the Securities and Exchange Board of India (SEBI) that 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 distribute the profits. In the other words, a Mutual Fund allows investors to indirectly take a position in a basket of assets. Mutual Fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document. Investments in securities are spread among a wide cross-section of industries and sectors thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at same time. Investors of mutual funds are known as unit holders. The investors in proprotion to their investments share the profits of losses. The mutual funds normally come out with a number of schemes with different investment objectives which are launched from time to time. A Mutual Fund is required to be registered with Securities Exchange Board of India (SEBI) which regulates securities markets before it can collect funds from the public.

NEED OF THE STUDY

The projects idea is to project Mutual Fund as a better avenue for investment on a long-term or short-term basis. Mutual Fund is a productive package for a lay-investor with limited finances, this project creates an awareness that the Mutual Fund is a worthy investment practice. Mutual Fund is a globally proven instrument. Mutual Funds are Unit Trust as it is called in some parts of the world has a long and successful history, of late Mutual Funds have become a hot favourite of millions of people all over the world. The driving force of Mutual Funds is the safety of the principal guaranteed, plus the added advantage of capital appreciation together with the income earned in the form of interest or dividend. The various schemes of Mutual Funds provide the investor with a wide range of investment options according to his risk bearing capacities and interest besides; they also give handy return to the investor. Mutual Funds offers an investor to invest even a small amount of money, each Mutual Fund has a defined investment objective and strategy. Mutual Funds schemes are managed by respective asset managed companies sponsored by financial institutions, banks, private companies or international firms. A Mutual Fund is the ideal investment vehicle for todays complex and modern financial scenario. The study is basically made to analyse the various open-ended equity schemes of different Asset Management Companies to highlight the diversity of investment that Mutual Fund offer. Thus, through the study one would understand how a common man could fruitfully convert a pittance into great penny by wisely investing into the right scheme according to his risk taking abilities.

OBJECTIVES
1. To study enquiry of mutual funds for getting information investment schemes in mutual funds. 2. To study awareness of mutual funds. 3. To help an investor make a right choice of investment, while considering the inherent risk factors. 4. To understand the recent trends in Mutual Funds world.

SCOPE OF THE STUDY

The study here has been limited to analyse open-ended equity schemes of different Asset Management Companies namely Reliance Capital, Franklin Templeton, HDFC Mutual Funds each scheme is analysed according to its performance against the other, based on factors like Sharpes Ratio, Treynors Ratio, (Beta) co-efficient, Returns.

RESEARCH METHODOLOGY
The methodology involves randomly selecting open-ended equity schemes of different fund houses of the country. The data collected for this project is basically from two sources, they are 1. Primary sources: The monthly fact sheets of different fund houses and research reports from banks. 2. Secondary sources: Collection of data from Internet and books.

LIMITATIONS OF THE STUDY

1. This study enquires mutual funds is better investment plans for long term.
2. The study is limited only to the analysis of different schemes and its suitability to different investors according to their risk-taking ability. 3. The study is based on secondary data available from monthly fact sheets, websites and other books as primary data was not accessible. 4. The study is limited by the detailed study of various schemes of Three AMCs.