COMPARATIVE ANALYSIS OF MUTUAL FUND ON THE BASIS OF ALPHA, BETA AND

STANDARD DEVIATION

PROJECT GUIDE:
(PROF )

SUBMITTED BY:
NAM: ()
(MFM) ROLL NO.
BATCH: (2009 - 2012)

IES MANAGEMENT COLLEGE AND RESEARCH CENTRE

UNIVERSITY OF MUMBAI

DECLARATION

I hereby declare that this report submitted in partial fulfillment of the requirement of the
award for the marks of master of MFM management to IES Management College is my
original work and not submitted for award for award of any degree or diploma fellowship
or for similar titles or prizes.

I further certify that I have no objection and grant the rights to IES Management college
to publish any chapter / project if they deem fit the journals/Magazine and newspapers
etc without my permission.

Place

Mumbai

Date

15/10/2011

Name

Class

Master of Financial Management

Roll No

MFM-09-25

CERTIFICATE

This is to certify that project titled MUTUAL FUND has been submitted by Mr. towards
partial fulfillment of the requirements of the MFM degree course 2009-2012 and has
been carried out by him under the guidance of
Mrs. at the IES Management College and Research Centre affiliated to the University of
Mumbai.

The matter presented in this report has not been submitted for any other purpose in this
Institute.

Guide:

Director:

Place : Mumbai
Date :15/10/2011

Place : Mumbai
Date : 15/10/2011

ACKNOWLEDGEMENT

I take this opportunity to express my deepest gratitude to all those people, without those
spontaneous support, guidance, encouragement and understanding, this project would
never had reached completion.

Mere words of gratitude will never suffice to their valuable guidance, patience and faith
shown in my work.

I would also like to avail this opportunity to express my sincere thanks and profound
gratitude to my project guide Prof .Devaki Nadkarni, whose valuable knowledge and
guidance have me complete this project successfully.

I acknowledge the timely help extended by all my colleagues and all the unmentioned
names from the concerned field.

INDEX

SR. NO.
PARTICULARS
PAGE NO.
1
EXECUTIVE SUMMARY
6
2
RESEARCH OBJECTIVE:
7
3
ABOUT THE COMPANY
9
4
THE SUBSIDIARIES OF INDIA INFO LINE LTD ARE:
12
5
INTRODUCTION TO MUTUAL FUND
15
6
ORGANIZATION OF A MUTUAL FUND
17
7
MAJOR MUTUAL FUND COMPANIES IN INDIA
18
8

KOTAK MAHINDRA ASSTE MANAGEMENT COMPANY

20
9
BENEFITS OF MUTUAL FUND INVESTMENT
27
10
LIMITATION OF MUTUAL FUND INVESTMENT
29
11
HISTORY OF MUTUAL FUND:
31
12
EMERGING ISSUES IN MUTUAL FUND
36
13
MUTUAL FUND BEST PRCTICES
38
14
COMPARATIVE STUDY OF MUTUAL FUNDS ON THE BASES OF ALPHA, BETA AND
STANDARD DEVIATION:
40
15
CONCLUSION:
68
16
BIBLIOGRAPHY:
70

EXECUTIVE SUMMARY

The project has been carried out the title Comparative Analysis of Mutual Fund on
the basis of Alpha, Beta and Standard Deviation.

The main function of having analysis of Mutual fund is to pinpoint the strong points and
weaknesses of mutual fund schemes.

For this I have taken the following parameters: Analyzing Mutual Fund using:-

1) Alpha: - I came to know how particulars Mutual Fund schemes performed related to
what it was expected to do.

2) Beta:- By comparing Mutual Fund on the basis of beta we come to know how volatile
a particular Mutual Fund as related to stock market is.

3) Standard Deviation:- The standard deviation of a fund measures this risk by

measuring the degree to which the fund fluctuates in relation to its mean return.

4) Schemes selected for project:o Equity Diversified

o Balanced Fund
o Debt fund

o Liquid fund

RESEARCH OBJECTIVE:

To evaluate investment performance of selected mutual funds in terms of risk and return.
Also to analyze the performance of mutual fund schemes on the basis of various
parameters. Primarily to understand the basic concepts of Mutual fund and its benefits
as an investment avenue.
Secondly, to compare and evaluate the performance of different schemes of mutual fund
companies on the basis of risk, return and volatility

SCOPE OF PROJECT:
The Schemes were categorized and selected on evaluating their performance and
relative risk. The scope of the project is mainly concentrated on the different categories
of the mutual funds such as equity schemes, debt funds, balanced funds and liquid fund.

RESEARCH METHODOLGY:
Research Methodology is a very organized and systematic medium through which a
particular case or problem can be solved. It is analytical, descriptive and quantitative
research where the comparison between the different mutual fund schemes is made on
the basis of risk, volatility and return.

FINDINGS AND ANALYSIS:

The collection of information is based on the secondary probe. The information has been
collected through various books, and internet.
An attempt has been made to evaluate the performance of the selected mutual fund
schemes. Performance of mutual fund schemes has been evaluated by using the
following performance measures.
(a) Risk

(b) Standard Deviation.

(c) Beta

LIMITATIONS:
To get an insight in the process of risk and return and deployment of funds by fund
manager is difficult.

The project is unable to analyze each and every scheme of mutual funds to create
awareness about risk and return. The risk and return of mutual fund schemes can
change according to the market conditions

ABOUT THE COMPANY

INDIA INFOLINE:

INDIA INFOLINE is a one-stop financial services shop, most respected for quality of its
advice, personalized service and cutting-edge technology.
VISION is to be the most respected company in the financial services space. India
Infoline Ltd:

India Infoline Ltd is listed on both the leading stock exchanges in India, viz. the Stock
Exchange, Mumbai (BSE) and the National Stock Exchange (NSE). The India Infoline
group, comprising the holding company, India Infoline Ltd and its subsidiaries, straddles

the entire financial services space with offerings ranging from Equity research, Equities
and derivatives trading, Commodities trading, Portfolio Management Services, Mutual
Funds, Life Insurance, Fixed deposits, GoI bonds and other small savings instruments to
loan products and Investment banking. India Infoline also owns and manages the
websites, www.indiainfoline.com and www.5paisa.com.
India Info line Ltd, being a listed entity, is regulated by SEBI (Securities and
Exchange Board of India). It undertakes equities research which is acknowledged by
none other than Forbes as 'Best of the Web' and 'a must read for investors in Asia'.

India Infoline's research is available not just over the internet but also on international
wire services like Bloomberg , Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers.
Its various subsidiaries are in different lines of business and hence are governed by
different regulators.

Geographical presence
IIL has pan-India presence across 94 cities. It started off with major branches in metros
and now it is focusing on Tier II and III cities. In Q1-FY11 the company opened 56
branches, taking the total number of branches to 233 branches. Almost 50%of the
revenue comes from centers in Maharashtra and Delhi.

FOLLOWED BY OTHER REGIONS.

THE SUBSIDIARIES OF INDIA INFO LINE LTD ARE:

India Infoline Securities Pvt Ltd:

India Infoline Securities Pvt. Ltd is a 100% subsidiary of India Infoline Ltd, which

is engaged in the businesses of Equities broking and Portfolio Management Services. It

holds memberships of both the leading stock exchanges of India viz. the Stock
Exchange, Mumbai (BSE) and the National Stock Exchange (NSE). It offers broking
services in the Cash and Derivatives segments of the NSE as well as the Cash segment
of the BSE.

India Infoline Commodities Pvt Ltd:

India Infoline Commodities Pvt Ltd is a 100% subsidiary of India Infoline Ltd, which is
engaged in the business of commodities broking. They have memberships with the MCX
and NCDEX, two leading Indian commodities exchanges, and has recently acquired
membership of DGCX.

India Infoline Distribution Co Ltd (IILD):

India Infoline Distribution Co Ltd is a 100% subsidiary of India Infoline Ltd and
is engaged in the business of distribution of Mutual Funds, IPOs, Fixed Deposits and
other small savings products. It is one of the largest 'vendor-independent' distribution
houses and has a wide pan-India footprint of over 232 branches coupled with a huge
number of 'feet-on-street', which help source and service customers across the length
and breadth of India.

Mortgages & Loans:

IILD has also entered the business of distribution of mortgages and loan products during
the year 2005-2006.

India Infoline Insurance Services Ltd:

India Infoline Insurance Services Ltd is also a 100% subsidiary of India Infoline Ltd and
is a registered Corporate Agent with the Insurance Regulatory and Development
Authority (IRDA). It is the largest Corporate Agent for ICICI Prudential Life Insurance Co
Ltd, which is India's largest private Life Insurance Company

India Infoline Investment Services Ltd:

India Infoline Investment Service Ltd is also a 100% subsidiary of India Infoline Ltd. It
has an NBFC licence from the Reserve Bank of India (RBI) and offers marginfunding

facility to the broking customers.

Management of India infoline:

Mr. Nirmal Jain

Nirmal Jain is the founder and Chairman of India Info line Ltd. He holds an MBA degree
from IIM Ahmedabad, and is a Chartered Accountant and a Cost Accountant. He has
had an impeccable professional and academic track record. He then joined hands with
two local brokers to set up their equity research division Inquire, in 1994. His work set
new standards for equity research in India. In 1995, he founded his own independent
financial research company, now known as India Info line Ltd.

Mr. R Venkataraman
Venkataraman is the co-promoter and Executive Director of India Infoline Ltd.
He holds a B.Tech degree in Electronics and Electrical Communications Engineering
from IIT Kharagpur and an MBA degree from IIM Bangalore. He has held senior
managerial positions in various divisions of ICICI Limited, including ICICI Securities
Limited, their investment banking joint venture with J P Morgan of USA and with BZW
and Taib Capital Corporation Limited. He has also held the position of Assistant Vice
President with G E Capital Services India Limited in their private equity division.

The Board of Directors

Apart from Nirmal Jain and R Venkataraman, the Board of Directors of India Infoline
comprises:
Mr Sat Pal Khattar (Non Executive Director)
Mr Sanjiv Ahuja (Independent Director)
Mr Nilesh Vikamsey (Independent Director)
Mr Kranti Sinha (Independent Director)

INTRODUCTION TO 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 appreciation 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
mutual fund is the ideal investment vehicle for todays complex and modern financial
scenario. Markets for equity shares, bonds and other fixed income instruments, real
estate, derivatives and other assets have become mature and information driven. Price
changes in these assets are driven by global events occurring in faraway places.

A typical individual is unlikely to have the knowledge, skills, inclination and time to keep
track of events, understand their implications and act speedily. An individual also finds it
difficult to keep track of ownership of his assets, investments, brokerage dues and bank
transactions etc.

Draft offer document is to be prepared at the time of launching the fund.

Typically, it pre specifies the investment objectives of the fund, the risk associated, the
costs involved in the process and the broad rules for entry into and exit from the fund

and other areas of operation. In India, as in most countries, these sponsors need
approval from a regulator, SEBI (Securities exchange Board of India) in our case. SEBI
looks at track
records of the sponsor and its financial strength in granting approval to the fund for
commencing operations.

A sponsor then hires an asset management company to invest the funds according to
the investment objective. It also hires another entity to be the custodian of the assets of
the fund and perhaps a third one to handle registry work for the unit holders
(subscribers) of the fund.

In the Indian context, the sponsors promote the Asset Management Company
also, in which it holds a majority stake. In many cases a sponsor can hold a 100% stake
in the Asset Management Company (AMC). E.g. Birla Global Finance is the sponsor of
the Birla Sun Life Asset Management Company Ltd., which has floated different mutual
funds schemes and also acts as an asset manager for the funds collected under the
schemes.

ORGANIZATION OF A MUTUAL FUND

There are many entities involved and the diagram below illustrates the organizational set
up of a mutual fund

Organization of a Mutual Fund

A Mutual Fund is set up in the form of trust, which has sponsor, trustees,
asset management company (AMC), and custodian. The trust is established by
sponsor or more than one sponsor who is like a promoter of company. The trustee of
mutual fund holds its property for the benefit of unit holders. Asset Management

Company (AMC) approved by SEBI manages the funds by making investments in

various types of securities. Custodian, who registered with SEBI, holds the securities of
the fund in its custody. The trustees are vested with the general power of
superintendence and direction over AMC. They monitor the performance and
compliance of SEBI regulations by mutual fund.

SEBI regulations required that at least two thirds of the directors of trustee
company or board of trustees must be independent i.e. they should not be
associated with sponsors. Also, 50% of the directors of the AMC must be
independent. All mutual funds are required to be registered with SEBI before they launch
their schemes.

MAJOR MUTUAL FUND COMPANIES IN INDIA

ABN AMRO MUTUAL FUND

ABN AMRO Mutual Fund was setup on April 15, 2004 with ABN AMRO Trustee(India)
Pvt. Ltd. as the Trustee Company. The AMC, ABN AMRO Asset Management (India) Ltd.
was incorporated on November 4, 2003. Deutsche Bank A G is the custodian of ABN
AMRO Mutual Fund.

BIRLA SUN LIFE MUTUAL FUND

Birla Sun Life Mutual Fund is the joint venture of Aditya Birla Group and Sun Life
Financial. Sun Life Financial is a global organization evolved in 1871 and is being
represented in Canada, the US, the Philippines, Japan, Indonesia and Bermuda apart
from India. Birla Sun life Mutual Fund follows a conservative long-term approach to
investment. Recently it crossed a AUM of Rs.10, 000 crores.

BANK OF BARODA MUTUAL FUND

Bank of Baroda Mutual Fund or BOB Mutual Fund was setup on October 30, 1992 under
the sponsorship of Bank of Baroda. BOB Assets Management Company Limited is the
AUM of BOB Mutual Fund and was incorporated on November 5, 1992. Deutsche Bank

AG is the custodian.

HDFC MUTUAL FUND

HDFC Mutual Fund was setup on June 30, 2000 with two sponsors namely
Housing Development Finance Corporation Limited and Standard Life Investments
Limited.

ING VYSYA MUTUAL FUND

ING Yysya Mutual Fund was setup on February 11, 1999 with the same named Trustee
Company. It is a joint venture of Vysya and ING. The AMC, ING Investment
Management (India) Pvt. Ltd. was on corporaed on April 6, 1998.

PRUDENTIAL ICICI MUTUAL FUND

The mutual fund of ICICI is a joint venture with Prudential Plc. Of America, one of the
largest life insurance companies in the US of A. Prudential ICICI Mutual Fund was setup
on 13 October, 1993 with two sponsors, Prudential Plc. and the AMC is Prudential ICICI
Asset Management Company Limited incorporated on 22 June, 1993.

SAHARA MUTUAL FUND

Sahara Mutual Fund was setup on July 18, 1996 with Sahara India financial Corporation
Ltd. as the sponsor. Sahara Assets Management Company Private Limited incorporated
on August 31, 1995 works as the AMC of Sahara Mutual Fund. The paid up capital of the
AMC stands at Rs.25.8 crore.

STATE BANK OF INDIA MUTUAL FUND

State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to launch
offshore fund, the India Magnum Fund with a corpus of Rs.225 crore
approximately. Today it is the largest Bank sponsored Mutual Fund in India. They already
launched 35 schemes out of which 15 have already yield handsome returns to investors.

State Bank of India Mutual Fund has more than Rs.5, 500 crores as AUM. Now it has an
investor base of over 8 lakhs spread over 18 schemes.

TATA MUTUAL FUND

TATA Mutual Fund is a Trust under the Indian Trust Act, 1882. the sponsors for Tata
Mutual Fund are Tata Sons Ltd., and Tata Investment Corporation Ltd. the investment
manger is Tata management Limited is one of the fastest in the country with more than
Rs.7,703 Crore(as on 2005) of AUM.
KOTAK MAHINDRA ASSET MANAGEMENT COMPANY

Kotak Mahindra Asset Management Company is a subsidiary of KMBL. It is presently

having more than 1, 99,818 investors in its various schemes. KMAMC stared its
operations in December 1998. Kotak Mahindra Mutual Fund offers schemes catering to
investors with varying risk return profiles. It was the first company to launch to
dedicated gilt scheme investing only in government securities.

UNIT TRUST OF INDIA MUTUAL FUND

UTI Asset Management Company Private Limited, established in Jan 24, 2003
manages the UTI Mutual Fund with the support of UTI Trustee Company Private Limited.
UTI Asset Management Company presently manages a corpus of over Rs.20, 000 crore.
The sponsors of UTI Mutual Fund are Bank of Baroda, Punjab National Bank, State
Bank of India, and Life Insurance Corporation of India. The schemes of UTI Mutual Fund
are Liquid Funds, assets Management Funds, Index Funds and Balanced Funds.

RELIANCE MUTUAL FUND

Reliance Mutual Fund was established as trust under Indian Trusts Act, 1882.The
sponsor of RMF is Reliance Capital Limited and Reliance Capital Trustee Co. Limited is
the Trustee. It was registered on June 30, 1995 as Reliance Mutual Fund which was
changed on March 11, 2004. Reliance Mutual Fund was formed for launching of various
schemes under which, units are issued to the public with a view to contribute to the
capital market and to provide investors the opportunities to make investments in
diversified securities.

STANDARD CHARTERED MUTUAL FUND

Standard Chartered Mutual Fund was setup on March 13, 2000 sponsored by Standard
Chartered Bank. The Trustee is Standard Chartered Trustee Company Pvt. Ltd.
Standard Chartered Asset Management Company Pvt. Ltd is the AMC which was
incorporated with SEBI on December 20, 1999.

FRANKLIN TEMPLETON MUTUAL FUND

The group, Franklin Templeton investment is a California based company with a global
AUM of US $409.2(as on 2005). It is one of the largest financial service group in the
world. Investors can buy or sell the Mutual Fund through their financial advisor or
through mail or through their website. They have open end Diversified Equity schemes,
Open end Sector Equity schemes, Open end Hybrid schemes, Open end tax saving
schemes, Open end income and liquid schemes, Closed end Income schemes and
Open end Fund of Funds schemes to offer.

MORGAN STANLEY MUTUAL FUND

Morgan Stanley is a world wide financial services company and its leading in the
market in securities, investment management and credit services. Morgan Stanley
investment management was established in the year 1975. it provides customized asset
management services and products to governments, corporations, pension funds and
non profit organizations. Its services are also extending to high net worth individuals and
retail investors. In India it is known as Morgan Stanley investment management Private
Ltd. and its AMC is Morgan Stanley Mutual Fund. This is the first closed end diversified
equity scheme serving the needs of Indian retail investors focusing on the long term
capital appreciation.

ESCORT MUTUAL FUNDS

Escort Mutual Funds was set up on April 15th, 1996 with Escorts Finance Ltd. as its
sponsor. The Trustee Company is Escorts Investments Trust Ltd.. its AMC was
incorporated on Dec1st, 95 with the name Escorts Asset Management Ltd.

ALLAINCE CAPITAL MUTUAL FUND

Allaince Capital Mutual Fund was set up on December 30, 1994 with Alliance Capital
Management Corp. of Delaware (USA) as sponsor. The Trustee is ACAM Trust

Company Pvt. Ltd. and AMC, the Alliance Capital Asset Management India Pvt. Ltd. with
the corporate office in Mumbai.

BENCHMARK MUTUAL FUND

Benchmark Mutual Fund was setup on June 12, 2001 with Niche Financial Services Pvt.
Ltd. as the sponsor and Benchmark Trustee Company Pvt. Ltd. as the trustee Company.
incorporated on October 16, 2000 and headquartered in Mumbai, Benchmark Assets
Management Company Pvt. Ltd. is the AMC.

CAN BANK MUTUAL FUND

Can Bank Mutual Fund was setup on December 19, 1987 with Canara Bank acting as
the sponsor. Canara bank investment Management Service Ltd. incorporated on March
2, 1993 is the AMC. The Corporate Office of the AMC is in Mumbai.

CHOLA MUTUAL FUND

Chola Mutual Fund under the sponsorship of Cholamandalam Investment & Finance
Company Ltd. was setup on January 3, 1997. Cholamandalam Trustee Co. Ltd. is the
Trustee Company and AMC is Cholamandalam AMC Limited.

LIC MUTUAL FUND

Life Insurance Corporation on India setup LIC Mutual Fund on 19th June 1989. It
contributed Rs.2 crore towards the corpus of the Fund. LIC Mutual Fund was constituted
as a trust in accordance with the provisions of the Indian trust Act, 1882. The Company
started its bsiness on 29th April 1994. The Trustees of LIC Mutual Fund have appointed
Jeevan Bima Sahayog Asset Management Company Ltd. as the Investment Managers
for mutual fund.

GIC MUTUAL FUND

GIC Mutual Fund, sponsored by General Insurance Corporation of India, a government
of India undertaking and the four Public Sector General Insurance Companies, viz.
National Insurance Co. Ltd, the New India Assurance Co. Ltd. the Oriental Insurance Co.
Ltd and United India Insurance Co. Ltd and is constituted as a Trust in Accordance with
the provisions of the Indian Trusts Act, 1882.

Types of Mutual Funds

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

By 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.

By Investment Objective:

Growth Funds:
The aim of growth funds is to provide capital appreciation over the medium to long- term.
Such schemes normally invest a majority of their corpus in equities. It has been proven
that returns from stocks, have outperformed most other kind of investments held over
the long term. Growth schemes are ideal for investors having a long-term outlook
seeking growth over a period of time

Income Funds:
The aim of income funds is to provide regular and steady income to investors.
Such schemes generally invest in fixed income securities such as bonds, corporate
debentures and Government securities. Income Funds are ideal for capital stability and
regular income.

Balanced Funds:
The aim of balanced funds is to provide both growth and regular income. Such
schemes periodically distribute a part of their earning and invest both in equities and
fixed income securities in the proportion indicated in their offer documents. In a rising
stock market, the NAV of these schemes may not normally keep pace, or fall equally
when the market falls. These are ideal for investors looking for a combination of income
and moderate growth.

Money Market Funds

The aim of money market funds is to provide easy liquidity, preservation of capital and
moderate income. These schemes generally invest in safer short-term instruments such
as treasury bills, certificates of deposit, commercial paper and interbank call money.
Returns on these schemes may fluctuate depending upon the interest rates prevailing in
the market. These are ideal for Corporate and individual investors as a means to park
their surplus funds for short periods.

Load Funds:
A Load Fund is one that charges a commission for entry or exit. That is, each time you
buy or sell units in the fund, a commission will be payable. Typically entry and exit loads
range from 1% to 2%. It could be worth paying the load, if the fund has a good

performance history.

No-Load Funds:
A No-Load Fund is one that does not charge a commission for entry or exit. That is, no
commission is payable on purchase or sale of units in the fund. The advantage of a no
load fund is that the entire corpus is put to work.

Other Schemes:
Tax Saving Schemes:
These schemes offer tax rebates to the investors under specific provisions of the Indian
Income Tax laws as the Government offers tax incentives for investment in specified
avenues. Investments made in Equity Linked Savings Schemes (ELSS) and Pension
Schemes are allowed as deduction u/s 88 of the Income Tax Act, 1961. The Act also
provides opportunities to investors to save capital gains u/s 54EA and 54EB by investing
in Mutual Funds, provided the capital asset has been sold prior to April 1, 2000 and the
amount is invested before September 30, 2000.

Special Schemes:
Industry Specific Schemes:
Industry Specific Schemes invest only in the industries specified in the offer document.
The investment of these funds is limited to specific industries like InfoTech, FMCG,
Pharmaceuticals etc.

Index Schemes:
Index Funds attempt to replicate the performance of a particular index such as the BSE
Sensex or the NSE 50.

Sectoral Schemes:
Sectoral Funds are those, which invest exclusively in a specified industry or a
group of industries or various segments such as 'A' Group shares or initial public
offerings.

BENEFITS OF MUTUAL FUND INVESTMENT

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.

LIMITATION OF MUTUAL FUND INVESTMENT

1. No Control Over Cost:

An Investor in mutual fund has no control over the overall costs of investing. He pays an
investment management fee (which is a percentage of his investments) as long as he
remains invested in fund, whether the fund value is rising or declining. He also has to
pay fund distribution costs, which he would not incur in direct investing.

However this only means that there is a cost to obtain the benefits of mutual fund
services. This cost is often less than the cost of direct investing.

2. No Tailor-Made Portfolios:
Investing through mutual funds means delegation of the decision of portfolio composition
to the fund managers. The very high net worth individuals or large corporate investors
may find this to be a constraint in achieving their objectives.
However, most mutual funds help investors overcome this constraint by offering large
no. of schemes within the same fund.

3. Managing A Portfolio Of Funds:

Availability of large no. of funds can actually mean too much choice for the
investors. He may again need advice on how to select a fund to achieve his objectives.
AMFI has taken initiative in this regard by starting a training and certification program for
prospective Mutual Fund Advisors. SEBI has made this certification compulsory for
every mutual fund advisor interested in selling mutual fund.

a. Taxes:
During a typical year, most actively managed mutual funds sell anywhere
from
20 to 70 percent of the securities in their portfolios. If your fund makes a profit on its
sales, you will pay taxes on the income you receive,
even if you reinvest the money
you made.

b. Cost of Churn:
The portfolio of fund does not remain constant. The extent to which the
portfolio changes is a function of the style of the individual fund manager i.e. whether he
is a buy and hold type of manager or one who aggressively churns the fund. It is also
dependent on the volatility of the
fund size i.e. whether the fund constantly
receives fresh subscriptions and redemptions. Such portfolio changes have
associated costs of
brokerage, custody fees etc. that lowers the portfolio return
commensurately.

Net Asset Value (NAV)

The net asset value of the fund is the cumulative market value of the assets fund net of
its liabilities. In other words, if the fund is dissolved or liquidated, by selling off all the
assets in the fund, this is the amount that the shareholders would collectively own. This
gives rise to the concept of net asset value per unit, which is the value, represented by
the ownership of one unit in the fund. It is calculated simply by dividing the net asset
value of the fund by the number of units. However, most people refer loosely to the NAV
per unit as NAV, ignoring the "per unit". We also abide by the same convention.

Calculation of NAV
The most important part of the calculation is the valuation of the assets owned by the
fund. Once it is calculated, the NAV is simply the net value of assets divided by the
number of units outstanding. The detailed methodology for the calculation of the asset
value is given below.

Asset value is equal to

Sum of market value of shares/debentures
+ Liquid assets/cash held, if any
+ Dividends/interest accrued Amount due on unpaid assets Expenses accrued but not

paid

HISTORY OF MUTUAL FUND:

Mutual Funds in India (1964-2000)

The end of millennium marks 36 years of existence of mutual funds in this country. The
ride through these 36 years is not been smooth. Investor opinion is still divided. While
some are for mutual funds others are against it.
UTI commenced its operations from July 1964 .The impetus for establishing a
formal institution came from the desire to increase the propensity of the middle and
lower groups to save and to invest. UTI came into existence during a period marked by
great political and economic uncertainty in India. With war on the borders and economic
turmoil that depressed the financial market, entrepreneurs were hesitant to enter capital
market.

UTI commenced its operations from July 1964 "with a view to encouraging savings and
investment and participation in the income, profits and gains accruing to the Corporation
from the acquisition, holding, management and disposal of securities." Different
provisions of the UTI Act laid down the structure of management, scope of business,
powers and functions of the Trust as well as accounting, disclosures and regulatory
requirements for the Trust.

The opening up of the asset management business to private sector in 1993 saw
international players like Morgan Stanley, Jardine Fleming, JP Morgan, George Soros
and Capital International along with the host of domestic players join the party. But for
the equity funds, the period of 1994-96 was one of the worst in the history of Indian
Mutual Funds.

1999-2000 Year of the funds

Mutual funds have been around for a long period of time to be precise for 36 yrs but the
year 1999 saw immense future potential and developments in this sector. This year
signaled the year of resurgence of mutual funds and the regaining of investor confidence

in these MFs. This time around all the participants are involved in the revival of the
funds the AMCs, the unit holders, the other related parties. However the sole factor that
gave lifr to the revival of the funds was the Union Budget. The budget brought about a
large number of changes in one stroke. An insight of the Union Budget on mutual funds
taxation benefits is provided later.

It provided centrestage to the mutual funds, made them more attractive and
provides acceptability among the investors. The Union Budget exempted mutual fund
dividend given out by equity-oriented schemes from tax, both at the hands of the
investor as well as the mutual fund. No longer were the mutual funds interested in selling
the concept of mutual funds they wanted to talk business which would mean to increase
asset base, and to get asset base and investor base they had to be fully armed with a
whole lot of schemes for every investor .So new schemes for new IPOs were inevitable.
The quest to attract investors extended beyond just new schemes. The funds started to
regulate themselves and were all out on winning the trust and confidence of the
investors under the aegis of the Association of Mutual Funds of India (AMFI)

One cam say that the industry is moving from infancy to adolescence, the industry is
maturing and the investors and funds are frankly and openly discussing difficulties
opportunities and compulsions.

Future Scenario
The asset base will continue to grow at an annual rate of about 30 to 35 % over
the next few years as investors shift their assets from banks and other traditional
avenues. Some of the older public and private sector players will either close shop or be
taken over.

Out of ten public sector players five will sell out, close down or merge with stronger
players in three to four years. In the private sector this trend has already started with two
mergers and one takeover. Here too some of them will down their shutters in the near
future to come.

But this does not mean there is no room for other players. The market will witness a
flurry of new players entering the arena. There will be a large number of offers from
various asset management companies in the time to come. Some big names like

Fidelity, Principal, Old Mutual etc. are looking at Indian market seriously. One important
reason for it is that most major players already have presence here and hence these big
names would hardly like to get left behind.

The mutual fund industry is awaiting the introduction of derivatives in India as this would
enable it to hedge its risk and this in turn would be reflected in its Net Asset Value
(NAV).

SEBI is working out the norms for enabling the existing mutual fund schemes to
trade in derivatives. Importantly, many market players have called on the Regulator to
initiate the process immediately, so that the mutual funds can implement the changes
that are required to trade in Derivatives.

GROWTH IN ASSETS UNDER MANAGEMENT

RECENT TRENDS IN MUTUAL FUND INDUSTRY :

The most important trend in the mutual fund industry is the aggressive expansion of the
foreign owned mutual fund companies and the decline of the companies floated by
nationalized banks and smaller private sector players. Many nationalized banks got into
the mutual fund business in the early nineties and got off to a good start due to the stock
market boom prevailing then. These banks did not really understand the mutual fund
business and they just viewed it as another kind of banking activity.

Few hired specialized staff and generally chose to transfer staff from the parent
organizations. The performance of most of the schemes floated by these funds was not
good. Some schemes had offered guaranteed returns and their parent organizations had
to bail out these AMCs by paying large amounts of money as the difference between the
guaranteed and actual returns. The service levels were also very bad.

Most of these AMCs have not been able to retain staff, float new schemes etc. and it is
doubtful whether, barring a few exceptions, they have serious plans of continuing the

activity in a major way. The experience of some of the AMCs floated by private sector
Indian companies was also very similar. They quickly realized that the AMC business is
a business, which makes money in the long term and requires deep-pocketed support in
the intermediate years.

Some have sold out to foreign owned companies, some have merged with others and
there is general restructuring going on. The foreign owned companies have deep
pockets and have come in here with the expectation of a long haul. They can be credited
with introducing many new practices such as new product innovation, sharp
improvement in service standards and disclosure, usage of technology, broker education
and support etc. In fact, they have forced the industry to upgrade itself and service levels
of organizations like UTI have improved dramatically in the last few years in response to
the competition provided by these.

WHY SHOULD INVESTORS INVEST IN MUTUAL FUND?

An investor avails of the service of experienced and skilled professionals who are
backed by a dedicated of companies and selects suitable investments to achieve the
objectives of the schemes.

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 the
stocks decline at the same time and in the
same proportion. The investors achieve
this diversification through a
mutual fund with far less money than you can do on
our own.

Investing in a mutual fund reduces paperwork and helps an investor avoid

many problems such as bad deliveries, delayed payments and
unnecessary
follow.

EMERGING ISSUES IN MUTUAL FUND

Rating of Mutual Fund Schemes:

Total returns has been the criteria for measuring the performance of mutual
fund. Therefore, CRISIL has development a composite performance ranking which
measures performance for each of the openended schemes. According to
CRISIL, this measures is applicable only
to those schemes,
which are at least
two years old and disclose 100% of
their portfolios.

Changes in Mutual Fund due to the Advent of Net:

As per SEBI regulations, bond funds and equity funds can charge a
maximum
of 2.25% and 2.5% as administrative fees, respectively.
Mutual Funds could bring
down their administrative costs to 0.75%, if
trading is done online and consequently
improves the return potential of their schemes. Mutual Funds could provide better advise
or servise to their investors through the Net.

New Norms on NPA Classification:

The Malegan committee has made important recommendations regarding

norms on classification of NPAs in debt securities and norms for valuation of liquid
securities in a mutual fund schemes. The committee has recommended that debt
securities held by mutual fund in their portfolio
can be classified as NPA, if the
principal or interest is not received for six
months. The mutual funds will have to
disclose the NPAs to unit holders in
a half-yearly basis.

INFLUENCE OF TECHNOLOGY:

A majority of the mutual fund have their own websites providing

basic
information relating to the schemes. Mutual Fund have begun to
use electronic
fund transfer method top remit their dividends and redemption proceeds. However, the
most significant influence of
technology is seen in servicing investors. So technology
can bridge the
gap between investor education and products positioning.

PRODUCT INNOVATION:

Product innovation is an emerging feature in the mutual fund industry in

India. Most of the products offered by mutual fund can be divided among
three
classes of cash funds, income funds and equity funds. The year
2002 was different

in that the products offered were far more innovative. Templeton India launched a debt
fund that would invest predominantly in
floating rate bonds.

INDICES FOR MUTUAL FUNDS:

The AMFI has recently launched four indices for gilt funds and another
set
of indices for balanced funds, bond funds, monthly income plans and liquid funds. The
indices, which have been developed and will be
maintained by ICICI securities and
finance companied and CRISIL.com,
respectively, will be mandated for use by
mutual funds to enable the comparison of performance.

FUNDS OF FUNDS:

The SEBI may soon permit mutual funds to float a new category of funds
called
funds of funds, which will invest in other mutual fund schemes. These scheme will
enable people to invest in different mutual funds schemes through a single find

MUTUAL FUND BEST PRCTICES

THE PRACTICE OF RESTFUL Risk- Reward Relationship:

A clear and direct relationship of risk with reward has to be developed and the concept
instilled in the mind of the investor, and this is the basis of all classification of Mutual
Fund.

Ease of Business:
The business of Mutual Fund is not an easy one. It is easy only for the ones who have
either been in the business for a long time, or for the people, institutions which have
been in the investment space for a long time and are willing to experiment and learn
from their mistake, and can be flexible.

Service:

The service provision ought to be flawless, for after all, Mutual Fund is a service,
and the only way the number of customers can be increased and the existing ones
retained is by providing a higher level of service, thereby increasing customer
satisfaction.

Trust / Transparency:
A high level of transparency has to be built into the system of processes and
investments in Mutual Fund. This is of vital importance as the terms Transparency and
Trust, in the case of Mutual Funds is synonyms. Trust in the firm would come only with
transparency. And with Trust would come more business.

Fairness to Investors:
This, of course, is an offshoot of the previous point that we made. No business
can survive unless it is fair to the customer. However, what is important here is that it has
to be made evidently clear that the firm is actually being fair to its customers. Modesty
doesnt help, and this has to be told to your customers so that they actually notice.
The objective of the investment have to be always kept in mind while marketing Mutual
Fund, for if there is a deviation, its utility is lost, or the customers remain unsatisfied.

Liquidity:
This has again and again highlighted, for it the basic premise that most investors invest
in Mutual Fund only because of the high level of liquidity. There has to be a good market
development for your issue, so that there is a ready market available for them.

COMPARATIVE STUDY OF MUTUAL FUNDS ON THE BASES OF ALPHA, BETA AND

STANDARD DEVIATION

ALPHA:Measures how much if any of the extra risk helped the fund outperform its
corresponding benchmark. Using beta, alpha's computation compares the fund's

performance to that of the benchmark's risk-adjusted returns and establishes if the

fund's returns outperformed the market's, given the same amount of risk. For
example, if a fund has an alpha of 1, it means that the fund outperformed the benchmark
by 1%. Negative alphas are bad in that they indicate that the fund under performed for
the amount of extra, fund-specific risk that the fund's investors undertook.

BETA :Beta is useful statistical measure, which determines the volatility, or risk, of a fund in
comparison to that of its index or benchmark. A fund with a beta very close to 1 means
the fund's performance closely matches the index or benchmark. A beta greater than 1
indicates greater volatility than the overall market, and a beta less than 1 indicates less
volatility than the benchmark.

STANDARD DEVIATION :The standard deviation essentially reports a fund's volatility, which indicates the
tendency of the returns to rise or fall drastically in a short period of time. A security that is
volatile is also considered higher risk because its performance may change quickly in
either direction at any moment. The standard deviation of a fund measures this risk by
measuring the degree to which the fund fluctuates in relation to its mean return.

SENSEX RETURNS:
MONTH SENSEX RETURNS
March -0.14
April 0.14
May 0.02
June -0.17
July

0.11

CALCULATION OF RETURNS ON MUTUAL FUND SCHEMES: BALANCE

FUND:
TATA BALANCED FUND (GROWTH)
PRU ICICI FUND (GROWTH)
HDFC PRUDENCE FUND (GROWTH)

TATA BALANCED FUND

DATE

NAV

DATE

RETURN
(%)

(%)

NAV

RETURN
(%)

(%)

DATE

NAV

RETURN

DATE

NAV

DATE

RETURN

NAV

RETURN

(%)

1-Mar -1.30%

2-Apr -1.94

3-May 1.16% 1-Jun 0.09% 2-Jul

2-Mar -3.23%
0.74%

3-Apr 0.74% 4-May -0.39%

0.34%

4-Jun -0.49%

3-Jul

5-Mar 1.10% 4-Apr 1.06% 7-May -0.23%

5-Jun 0.62% 4-Jul

6-Mar 1.10% 5-Apr 0.55% 8-May -0.44%

6-Jun -1.10% 5-Jul -0.27%

7-Mar -0.91%
0.52%

9-Apr 1.64% 9-May 0.07% 7-Jun -0.09%

8-Mar 2.36% 10-Apr 0.28% 10-May

9-Mar -0.84%
-0.39%

0.01% 8-Jun -0.59%

11-Apr 0.50% 11-May

12-Mar 0.80% 12-Apr -0.13%

0.14%

14-May

13-Mar 0.82% 13-Apr 1.52% 15-May

1.17%
14-Mar -1.96%
0.83%

16-Apr 1.74% 16-May

0.17%

6-Jul
9-Jul

0.45%

0.26% 11-Jun -0.22%

10-Jul

0.83% 12-Jun -0.11%

11-Jul

0.08% 13-Jun -0.45%

12-Jul

1.19% 14-Jun 1.18% 13-Jul

16-Mar -0.60%
0.17%

17-Apr -0.47%

17-May

0.83% 15-Jun 0.04% 16-Jul

19-Mar 1.33% 18-Apr 0.01% 18-May

-0.68%

-0.05%

20-Mar 0.24% 19-Apr 0.06% 21-May

0.59% 19-Jun 1.11% 19-Jul 0.83%

21-Mar 0.93% 20-Apr 1.08% 22-May

0.24% 20-Jun 0.75% 20-Jul 0.07%

22-Mar 1.87% 23-Apr 0.10% 23-May

0.94%

-0.28%

21-Jun 0.70% 23-Jul

23-Mar 0.31% 24-Apr 0.81% 24-May

0.14%

-0.62%

22-Jun -0.23%

26-Mar -0.41%
-0.75%

25-Apr 0.16% 25-May

28-Mar -1.17%
-0.09%

26-Arp -0.13%

27-Apr -0.78%

29-May

30-Apr 0.61% 30-May

31-May

Avg.

RETURNS
RETURNS

17-Jul

24-Jul

0.55% 25-Jun 0.31% 25-Jul

28-May

0.37% 26-Jun 0.48% 26-Jul

0.71% 27-Jun -0.31%

27-Jul 2.66%

-0.47%

28-Jun 0.29% 30-Jul 0.01%

0.79% 29-Jun 0.95% 31-Jul 1.67%

TOTAL 0.44% TOTAL -1.85%

Avg.

18-Jun -0.25%

Avg.

Avg.

0.02% RETURNS
0.13% RETURNS

PRU ICICI BALANCED FUND

TOTAL 5.20% TOTAL 2.68% TOTAL 8.67%

Avg.
0.092325
0.41%

RETURNS

0.25%

DATE

NAV

DATE

RETURN
(%)

(%)

NAV

RETURN
(%)

(%)

5-Mar -3.23%
-0.22%

NAV

RETURN

NAV

RETURN

4-Jun -0.60%

4-Apr 0.64% 7-May -0.34%

0.02%
3-Jul

5-Jun 0.55% 4-Jul

6-Jun -1.62%

5-Jul

9-Apr 1.57% 9-May 0.09% 7-Jun -0.06%

6-Jul

10-May

11-Apr 0.42% 11-May

12-Mar 0.34% 12-Apr -0.47%

0.30%

14-May

13-Mar 0.76% 13-Apr 1.96% 15-May

0.97%
14-Mar -2.11%
0.59%

DATE

RETURN

3-Apr 0.80% 4-May -0.74%

8-Mar 2.54% 10-Apr -0.12%

0.57%
9-Mar -0.70%
-0.30%

NAV

3-May 1.03% 1-Jun 0.16% 2-Jul

6-Mar 1.44% 5-Apr 0.39% 8-May -0.60%

-0.08%
7-Mar -0.86%
0.14%

DATE

(%)

1-Mar 1.05% 2-Apr -1.92%

2-Mar -1.66
0.90%

DATE

16-Apr 1.20% 16-May

16-Mar 0.00% 17-Apr -0.66%

-0.21%

17-May

19-Mar 1.11% 18-Apr 0.38% 18-May

-0.16%
20-Mar 0.76% 19-Apr -0.12%
0.83%

21-May

0.09% 8-Jun -0.56%

9-Jul

0.55% 11-Jun 0.03% 10-Jul

1.15% 12-Jun -0.20%
0.17% 13-Jun -0.59%

11-Jul
12-Jul

0.79% 14-Jun 1.27% 13-Jul

0.79% 15-Jun 0.03% 16-Jul
-0.17%

18-Jun -0.34%

1.01% 19-Jun 0.92% 19-Jul

21-Mar 0.70% 20-Apr 1.24% 22-May

0.06% 20-Jun 0.78% 20-Jul 0%

22-Mar 1.71% 23-Apr 0.03% 23-May

0.69%

-0.39%

21-Jun 0.22% 23-Jul

17-Jul

23-Mar -0.15%
24-Jul
0.21%

24-Apr 0.66% 24-May

-0.58%

26-Mar -0.59%
-0.92%

25-Apr 0.37% 25-May

0.59% 25-Jun -0.06%

28-Mar -1.31%
-0.18%

26-Apr -0.23%

27-Apr -1.33%

29-May

30-Apr 0.03% 30-May

31-May

22-Jun -0.47%
25-Jul

28-May

0.83% 26-Jun 0.36% 26-Jul

0.55% 27-Jun -0.17%

27-Jul -2.70%

-0.79%

28-Jun 0.19% 30-Jul -0.24%

0.41% 29-Jun 0.85% 31-Jul 1.61%

TOTAL -0.20%

TOTAL 4.84% TOTAL 4.50% TOTAL 0.69% TOTAL 1.90%

Avg.

Avg.

Avg.

RETURNS
0.03%

Avg.

Avg.

0.25% RETURNS
RETURNS
0.09%

0.24% RETURNS

0.21% RETURNS

NAV

DATE

HDFC PRUDENCE FUND

DATE

NAV

DATE

RETURN
(%)

(%)

NAV

RETURN
(%)

(%)

DATE

RETURN

DATE

NAV

RETURN

NAV

RETURN

(%)

1-Mar 0.15% 2-Apr -1.50%

3-May 0.79% 1-Jun 0.71% 2-Jul

0.72%

2-Mar -1.05%
0.67%

3-Apr 0.52% 4-May -0.57%

4-Jun -0.57%

5-Mar -3.39%
-0.51%

4-Apr 0.75% 7-May -0.12%

5-Jun 0.72% 4-Jul

6-Mar 0.09% 5-Apr 0.61% 8-May -0.59%

6-Jun -0.88%

3-Jul

5-Jul

-0.34%
7-Mar -1.34%
0.28%

9-Apr 1.49% 9-May 0.22% 7-Jun -0.11%

8-Mar 1.91% 10-Apr 0.55% 10-May

0.75%
9-Mar -0.19%
-0.24%

-0.01%

11-Apr 0.83% 11-May

12-Mar 0.66% 12-Apr -0.47%

-0.06%

8-Jun -0.36%

1.37% 12-Jun -0.66%

0.30% 13-Jun -0.15%

14-Mar -1.42%
0.28%

16-Apr 1.50% 16-May

16-Mar -0.14%
0.66%

17-Apr -0.73%

9-Jul

0.48% 11-Jun 0.15% 10-Jul

14-May

13-Mar 0.29% 13-Apr 0.97% 15-May

1.17%

6-Jul

11-Jul
12-Jul

0.62% 14-Jun 1.17% 13-Jul

17-May

0.11% 15-Jun 0.16% 16-Jul

19-Mar 0.68% 18-Apr 0.09% 18-May

-0.65%

-0.30%

18-Jun -0.24%

20-Mar 0.72% 19-Apr 0.01% 21-May

0.57% 19-Jun 0.69% 19-Jul 1.02%

21-Mar 0.98% 20-Apr 0.45% 22-May

0.24% 20-Jun 1.12% 20-Jul 0.13%

23-Mar -0.24%
0.57%

23-Apr 0.13% 23-May

0.01% 21-Jun 0.41% 23-Jul

26-Mar -0.31%
24-Jul -0.07%

24-Apr 0.24% 24-May

-0.85%

28-Mar -1.18%
-0.42%

25-Apr 0.55% 25-May

0.37% 25-Jun 0.21% 25-Jul

26-Apr -0.26%

28-May

1.21% 26-Jun 0.37% 26-Jul 0.19%

27-Apr -0.41%

29-May

0.33% 27-Jun 0.11% 27-Jul -1.49%

30-Apr 0.81% 30-May

31-May

-0.42%

28-Jun -0.09%

17-Jul

22-Jun -0.32%

30-Jul -0.04%

0.88% 29-Jun 0.71% 31-Jul 1.73%

TOTAL -3.78%

TOTAL 6.13% TOTAL 4.64% TOTAL 3.15% TOTAL 4.35%

Avg.

Avg.

RETURNS
RETURNS

Avg.

Avg.

Avg.

-0.22%
RETURNS
0.31% RETURNS
0.15% RETURNS
0.21%

0.22%

CALCULATION OF RETURNS ON MUTUAL FUND SCHEMES:

Sensex

(Sm-Sm)*

(Sm-mean)*

(Mm-mean)*

Month Returns
mean) (Mm-mean)

tata bal

March -0.14

0.02

-0.132 -0.1240

0.016368

0.0004 0.015376

April

-0.09

0.148 -0.2340

-0.034632

0.0081 0.054756

0.14

(Sm-mean)

May

0.02

0.25

0.028 0.1060 0.002968

June

-0.17

0.13

-0.162 -0.0140

July

0.11

0.41

0.118 0.2660 0.031388

0.72

0.01836

TOTAL -0.04

(Mm-mean)

0.0625 0.011236

0.002268

0.0169 0.000196

0.1681 0.070756

0.256 0.030525

mean -0.008 0.144

BETA

0.01836/ 0.08028
0.2286996

PRU

ALPHA

(Mm-Mm) (Sm-

0.1458296

Standard Deviation 0.030525

Month
sensex returns
ICICI
(Sm-mean)
(Tm-mean)
(Sm-Sm)*(Tm-Tm)
(Tm-mean)*(tm-mean)
(Tm-mean)*(tm-mean)
March
-0.14
0.25
-0.132
0.086
-0.011352
0.007396
0.007396
April
0.14
0.24
0.148
0.076
0.011248
0.005776
0.005776
May
0.02

0.21
0.028
0.046
0.001288
0.002116
0.002116
June
-0.17
0.03
-0.162
-0.134
0.021708
0.017956
0.017956
July
0.11
0.09
0.118
-0.074
-0.008732
0.005476
0.005476
TOTAL
-0.04
0.82
0.01416

MEAN
-0.008
0.164

BETA

0.01416/ 0.08028

ALPHA

0.1654111

0.174

Standard Deviation

sensex HDFC (Sm-

(Mm- (Sm-Sm)*(Tm-

0.006

(Tm-mean)*(tm-

Mon
MAG
Month sensex returns
mean)*(tm-mean)

(MmBAL

(Sm-mean)mean) (Sm-Sm)*(Tm-Tm)

March -0.14 -0.04 -0.132 -0.186 -0.186 0.034596

April

0.14

0.32

0.148 0.174 0.174 0.030276

May

0.02

0.23

0.028 0.084 0.084 0.007056

(Tm-

June

-0.17 0.08

-0.162 -0.066 -0.066 0.004356

July

0.11

0.118 -0.006 -0.006 0.013924

0.14

TOTAL -0.04 0.73

0.012

MEAN -0.008 0.146

BETA 0.012/ 0.08028

ALPHA

0.149476831

0.1522422

Standard Deviation

March -0.14 -0.22 -0.132 -0.354 0.046728

0.125316

April

0.14

0.31

0.148 0.176 0.026048

0.030976

May

0.02

0.22

0.028 0.086 0.002408

0.007396

June

-0.17 0.15

-0.162 0.016 -0.002592

0.000256

July

0.11

0.118 0.076 0.008968

0.005776

0.21

0.0137

TOTAL -0.04 0.67

MEAN -0.008 0.134

BETA 0.08156/ 0.08028

1.015944195

ALPHA

0.142127554

Standard Deviation

0.0524

BETA

0.10202/ 0.08028

ALPHA

1.270802192

SCHEMES
TATA

BETA

0.2286996

PRU ICICI

0.218166418

Standard Deviation

0.0185

ALPHA S.D.
0.146 0.031

0.174 0.165 0.006

HDFC 1.314365517 0.142 0.0524

MAG BAL

0.132383266 0.152 0.0137

JM BAL

1.24

0.218 0.0185

INTERPRETATION BETA:

This indicates that HDFC Schemes in balance fund has given return with par with
SENSEX. The highest volatility shown in balance fund is by JM Morgan Balance fund.
And the least volatility is been shown by Magnum Balance Fund.
Alpha:

Alpha of JM Morgan is the highest, this indicate that with the given risk the fund
has given good return. It indicate that JM Morgan strategy is that, it takes comparatively
more risk but at the same time it gives good return. The less return is given by TATA
Balance Fund.

Standard Deviation:
Standard Deviation indicate volatility in the performance. From the Balance Fund it
indicates that HDFC has high volatility in its portfolio.

Investors who do not want to take much risk normally go for Balanced Funds in Balance
Fund also investors who are risk averse can go for Pru ICICI as has less beta that is it is
less volatile but at the same time it is giving good returns.

EQUITY FUND:

Reliance Vision Fund

Magnum Multicap Fund

Birla Midcap Fund

CALCULATION OF RETURNS ON MUTUAL FUND SCHEMES:

EQUITY DIVERSIFIED

RELIANCE VISION FUND - (G)

DATE

NAV

DATE

RETURN
(%)

NAV

DATE

RETURN
(%)

NAV

DATE

RETURN
(%)

NAV

DATE

NAV

RETURN
(%)

RETURN

(%)

1-Mar 1.25% 2-Apr 2.36% 3-May 1.94% 1-Jun 0.54% 2-Jul

0.85%

2-Mar -2.32%
0.50%

3-Apr 1.09% 4-May -0.21%

4-Jun -0.93%

3-Jul

5-Mar -4.74%
0.62%

4-Apr 0.84% 7-May -0.34%

5-Jun -0.18%

4-Jul

6-Mar 1.31% 5-Apr 0.87% 8-May -0.78%

-0.18%
7-Mar -0.97%
0.70%

6-Jun -1.18%

5-Jul

9-Apr 2.30% 9-May 0.42% 7-Jun -0.12%

6-Jul

8-Mar 3.96% 10-Apr 0.48% 10-May

1.19%
9-Mar -1.29%
-0.55%

11-Apr 0.15% 11-May

0.01% 8-Jun -0.70%

9-Jul

0.80% 11-Jun 0.22% 10-Jul

12-Mar 0.17% 12-Apr 0.06% 14-May

-0.19%

1.00% 12-Jun -0.27%

11-Jul

13-Mar 1.10% 13-Apr 1.98% 15-May

1.78%

0.21% 13-Jun -0.55%

12-Jul

14-Mar -2.52%
0.39%

16-Apr 1.28% 16-May

1.04% 14-Jun 1.29% 13-Jul

17-Apr 0.83% 17-May

1.34% 15-Jun 0.13% 16-Jul

16-Mar -0.66%
0.39%

19-Mar 1.52% 18-Apr 0.35% 18-May

-0.71%

-0.26%

18-Jun 0.24% 17-Jul

20-Mar 0.77% 19-Apr 0.11% 21-May

0.63% 19-Jun 1.68% 19-Jul 1.49%

21-Mar 0.67% 20-Apr 1.32% 22-May

0.74% 20-Jun 1.27% 20-Jul 0.02%

22-Mar 2.14% 23-Apr 0.23% 23-May

0.49%

-0.84%

21-Jun 0.45% 23-Jul

23-Mar -0.03%
0.02%

24-Apr 1.02% 24-May

0.31% 22-Jun 0.07% 24-Jul

26-Mar -1.11%
-0.79%

25-Apr 0.68% 25-May

0.32% 25-Jun 0.39% 25-Jul

28-Mar -1.52%
0.36%

26-Apr 0.69% 28-May

0.72% 26-Jun 0.18% 26-Jul

27-Apr 1.41% 29-May

0.96% 27-Jun -0.27%

30-Apr 1.00% 30-May

-0.52%

31-May

27-Jul -2.42%

28-Jun 0.70% 30-Jul 0.19%

1.02% 29-Jun 0.71% 31-Jul 1.54%

TOTAL -2.27%

TOTAL 9.73% TOTAL 8.51% TOTAL 3.67% TOTAL 5.69%

Avg.

Avg.

Avg.

Avg.

Avg.

RETURNS -0.13% RETURNS 0.49% RETURNS 0.41% RETURNS 0.17% RETURNS

0.27%

MAGNUM MULTICAP FUND (G)

BIRLA MIDCAP FUND (G)

DATE NAV

DATE NAV

RETURN
RETURN

DATE

RETURN

NAV DATE NAV

RETURN

RETURN

DATE NAV

(%)

(%)

(%)

(%)

(%)

1-Mar 0.21% 2-Apr -1.48%3-May 0.51% 1-Jun -0.08%

2-Jul

1.24%

2-Mar -0.96% 3-Apr 0.52% 4-May 0.43% 4-Jun -0.70%

3-Jul

0.66%

5-Mar -4.75% 4-Apr 1.05% 7-May -0.29%

5-Jun 0.48% 4-Jul

0.98%

6-Mar 0.29% 5-Apr 0.64% 8-May -0.38%

6-Jun -0.84%

5-Jul

7-Mar -1.49% 9-Apr 1.72% 9-May 0.24% 7-Jun -0.18%

8-Mar 2.37% 10-Apr
1.00%

1.14% 10-May0.59%

9-Mar -0.61% 11-Apr

-0.63%

0.84% 11-May

6-Jul

-0.01%

0.30%

8-Jun -0.49%
1.33% 11-Jun

9-Jul

-0.18% 10-Jul

12-Mar
0.50% 12-Apr
11-Jul 0.64%

-0.26%14-May1.75%

12-Jun

-0.61%

13-Mar
0.87% 13-Apr
12-Jul 1.47%

1.29% 15-May 0.37%

13-Jun

-0.49%

14-Mar
-1.67% 16-Apr
13-Jul 1.40%

1.66% 16-May

1.64% 14-Jun

1.19%

16-Mar
-0.57% 17-Apr
16-Jul 1.10%

0.00% 17-May

0.27% 15-Jun

0.44%

19-Mar
0.78% 18-Apr
0.07% 17-Jul
-0.76%

0.36%

18-May0.11%

20-Mar
0.82% 19-Apr
1.03% 19-Jul 0.91%

0.27%

21-May

1.31% 19-Jun

21-Mar
0.39% 20-Apr
1.69% 20-Jul -0.35%

0.49%

22-May

0.16% 20-Jun

22-Mar
1.29% 23-Apr
0.62% 23-Jul 0.55%

-0.16%

23-May -0.48%

23-Mar
0.32% 24-Apr
-0.40% 24-Jul -0.25%

1.66% 24-May

-0.70%

26-Mar
-0.52% 25-Apr
25-Jul -0.85%

0.77% 25-May

0.47% 25-Jun

0.21%

28-Mar
-1.44% 26-Apr
26-Jul 1.02%

-0.32% 28-May

1.24% 26-Jun

0.26%

18-Jun

21-Jun
22-Jun

27-Apr

-0.68% 29-May

0.35% 27-Jun

0.00% 27-Jul -2.74%

30-Apr

0.88% 30-May

-0.41% 28-Jun

0.66% 30-Jul 0.60%

31-May

1.11% 29-Jun

0.95% 31-Jul 1.44%

TOTAL -4.17%
7.72%
Avg.

Avg.

TOTAL 10.39%
Avg.

Avg.

TOTAL 9.62% TOTAL

3.63% TOTAL

Avg.

RETURNS -0.23% RETURNS0.52% RETURNS 0.46% RETURNS0.17%

RETURNS0.37%

EQUITY DIVERSIFIED

BETA

0.08578/ 0.08028 ALPHA

1.068510214

0.181

Standard Deviation 0.0161

sensex

Birla

Month returns

(Sm- (Bm- (Sm-Sm)*(TmMid

mean)

March -0.14 -0.23 -0.132

mean)

-0.488

(Tm-mean)*(tmTm)

0.064416

April

0.14

0.52

0.148 0.262 0.038776

0.021904

May

0.02

0.46

0.028 0.202 0.005656

0.000784

June

-0.17 0.17

-0.162

0.014256

July

0.11

0.118 0.112 0.013216

TOTAL

0.37

-0.04 1.29 0.13632

-0.088

0.013924

mean)
0.017424

0.026244

MEAN

-0.008

0.258

BETA 0.13632/0.08028
1.698056801

ALPHA

0.272

Standard Deviation 0.0952

sensex

Fran Ind

Month returns

(Sm- (Bm- (Sm-Sm)*(Tm-

Opp

mean)

March -0.14 -0.03 -0.132

mean)

-0.31 0.04092

0.14

0.41

0.148 0.13

0.01924

May

0.02

0.73

0.028 0.45

0.0126

June

-0.17 0.14

-0.162

-0.14 0.02268

July

0.11

0.118 -0.13 -0.01534

TOTAL -0.04 1.4

MEAN -0.008

0.0801
0.28

BETA 0.0801/0.08028
0.997757848

ALPHA

0.288

Standard Deviation

0.087

SCHEMES BETA ALPHA S.D.

DSP ML Eq 1.09 0.241

0.036

Rel VIS

1.31 0.252

0.057

Mag Mul

1.07 0.181

0.016

Birla Mid

1.698

Fran Ind

0.272

0.095

Tm)
0.0961

April

0.15

(Tm-mean)*(tm-

0.0169
0.2025
0.0196

0.0169

mean)

Opp 0.998

0.288

0.087

INTERPRETATION
BETA:
Beta of Birla Midcap Equity Scheme is the highest, this indicate that the risk profile of
Birla Mutual Fund for Equity schemes is more. In equity schemes all the above mention
schemes have shown volatility as compared to SENSEX.
But Franklin India Opportunies Fund has shown less volatility as compared to other
Equity Mutual Fund.

ALPHA:
The highest return is given by Franklin India Opportunies Fund. But the risk taken by this
fund is less. Magnum Multicap fund has shown volatility at par with SENSEX but among
the Equity Schemes this fund has given less returns.

STANDARD DEVIATION:
Birla and Franklin Equity Mutual Fund has shown more deviation in its Movement.
Therefore these fund has shown more volatility in its performance.
For investors who invest in Equity Fund for getting more returns as compared to other
schemes, thereofore in order to get more returns they have to take more risks. Investors
who donot want to take risk but want to get more returns can go for Franklin India
Opportunies Fund

GILT FUND:

MAGNUM GILT FUND(SHORT TERM)

HDFC GILT LONG TERM PLAN

PRU ICICI GILT FUND(INVESTMENT)

BIRLA GILT PLUS REGULAR FUND

CALCULATION OF RETURNS ON MUTUAL FUND SCHEMES:

MAGNUM GILT FUND - SHORT TERM

DATE NAV

DATE NAV

RETURN
(%)

DATE NAV

RETURN
(%)

DATE NAV

RETURN
(%)

DATE NAV

RETURN
(%)

RETURN

(%)

1-Mar 0.00% 2-Apr 0.07% 3-May 0.07% 1-Jun 0.07% 2-Jul

0.07%

2-Mar 0.02% 3-Apr 0.02% 4-May 0.02% 4-Jun 0.09% 3-Jul

0.07%

5-Mar 0.06% 4-Apr 0.02% 7-May 0.07% 5-Jun 0.03% 4-Jul

0.10%

6-Mar 0.02% 5-Apr 0.02% 8-May 0.02% 6-Jun 0.03% 5-Jul

0.18%

7-Mar 0.02% 9-Apr 0.08% 9-May 0.02% 7-Jun 0.03% 6-Jul

0.16%

8-Mar 0.02% 10-Apr

0.02% 10-May 0.02% 8-Jun

0.03% 9-Jul

0.32%

9-Mar 0.02% 11-Apr

0.02% 11-May 0.02% 11-Jun 0.08% 10-Jul 0.02%

12-Mar

0.11% 12-Apr

0.02% 14-May 0.07% 12-Jun 0.03% 11-Jul 0.02%

13-Mar

0.02% 13-Apr

0.02% 15-May 0.02% 13-Jun 0.03% 12-Jul 0.02%

14-Mar

0.02% 16-Apr

0.07% 16-May 0.02% 14-Jun 0.03% 13-Jul 0.02%

16-Mar

0.04% 17-Apr

0.02% 17-May 0.04% 15-Jun 0.03% 16-Jul 0.07%

19-Mar

0.07% 18-Apr

0.02% 18-May 0.04% 18-Jun 0.08% 17-Jul 0.02%

20-Mar

0.02% 19-Apr

0.02% 21-May 0.09% 19-Jun 0.03% 19-Jul 0.05%

21-Mar

0.02% 20-Apr

0.03% 22-May 0.04% 20-Jun 0.03% 20-Jul 0.01%

22-Mar

0.02% 23-Apr

0.08% 23-May 0.04% 21-Jun 0.03% 23-Jul 0.18%

23-Mar

0.02% 24-Apr

0.02% 24-May 0.04% 22-Jun 0.03% 24-Jul 0.02%

26-Mar

0.07% 25-Apr

0.02% 25-May 0.04% 25-Jun 0.08% 25-Jul 0.02%

28-Mar

0.04% 26-Apr

0.02% 28-May 0.20% 26-Jun 0.03% 26-Jul 0.02%

27-Apr

0.02% 29-May

0.02% 27-Jun

0.03% 27-Jul 0.01%

30-Apr

0.07% 30-May

0.02% 28-Jun

0.09% 30-Jul 0.04%

31-May

0.03% 29-Jun

0.03% 31-Jul 0.01%

TOTAL 0.61% TOTAL 0.68% TOTAL 0.95% TOTAL 0.94% TOTAL 1.43%
Avg.

Avg.

RETURNS
0.04%

Avg.

Avg.

Avg.

0.03% RETURNS
RETURNS
0.07%

0.03% RETURNS

0.05% RETURNS

HDFC GILT FUND LONG TERM PLAN

DATE NAV

DATE NAV

RETURN
RETURN
(%)

DATE NAV

RETURN
(%)

1-Mar 0.26% 2-Apr 0.06%

DATE NAV

RETURN
(%)

DATE NAV

RETURN
(%)

3-May 0.13% 1-Jun 0.06% 2-Jul

(%)
0.19%

2-Mar -0.06% 3-Apr -0.90%

0.03%

4-May -0.03%

4-Jun -0.01%

5-Mar -0.02% 4-Apr 0.09%

7-May 0.10% 5-Jun -0.07% 4-Jul 0.16%

3-Jul

6-Mar 0.09% 5-Apr -0.18%

8-May 0.16% 6-Jun -0.21% 5-Jul 0.17%

7-Mar 0.08% 9-Apr 0.37%

9-May 0.12% 7-Jun 0.16% 6-Jul

8-Mar -0.33% 10-Apr0.39%

0.29%

10-May-0.23%

9-Mar -0.02% 11-Apr-0.14%

Jul
-0.07%

11-May

-0.09%

8-Jun -0.25%

0.00% 11-Jun

9-Jul

-0.92%

10-

12-Mar
0.03%

0.34% 12-Apr
11-Jul -0.03%

-0.11%

14-May

0.15% 12-Jun

13-Mar
-0.17%

-0.12%13-Apr
12-Jul 0.04%

-0.10%

15-May

0.15% 13-Jun

14-Mar
0.58%

-0.06%16-Apr
13-Jul -0.02%

-0.06%

16-May

0.08% 14-Jun

16-Mar
0.34%

-0.30%17-Apr
16-Jul 0.06%

0.13%

17-May

-0.03%15-Jun

19-Mar
0.48%

0.06% 18-Apr
17-Jul 0.12%

0.17%

18-May

-0.06%18-Jun

20-Mar
-0.10%

-0.20%19-Apr
19-Jul 0.06%

0.08%

21-May

0.23% 19-Jun

21-Mar
-0.08%

0.10% 20-Apr
20-Jul 0.12%

0.04%

22-May

-0.05%20-Jun

22-Mar
0.53% 23-Apr
23-Jul 0.59%

-0.08%

23-May

-0.05% 21-Jun 0.06%

23-Mar
0.04% 24-Apr
24-Jul -0.20%

0.55%

24-May

-0.02% 22-Jun 0.04%

26-Mar
0.07%

-0.23%25-Apr
25-Jul -0.26%

0.03%

25-May

0.18% 25-Jun

28-Mar
-0.06%

0.13% 26-Apr
26-Jul 0.12%

-0.29%

28-May

0.38% 26-Jun

27-Apr
-0.26%

-0.29%29-May-0.06%

27-Jun

-0.09% 27-Jul

30-Apr

-0.01%30-May-0.04%

28-Jun

0.16% 30-Jul 0.30%

31-May0.16%

29-Jun

0.02% 31-Jul -0.51%

TOTAL 0.29% TOTAL -0.25%

Avg.

Avg.

RETURNS
0.00%

Avg.

Avg.

TOTAL 1.27% TOTAL 0.04% TOTAL 0.81%

Avg.

0.02% RETURNS
RETURNS
0.04%

-0.01%

RETURNS

0.06% RETURNS

DATE NAV

DATE NAV

PRU ICICI GILT FUND (INVESTMENT) -

DATE NAV

DATE NAV

RETURN
RETURN
(%)

DATE

NAV

RETURN

RETURN

(%)

(%)

1-Mar 0.04% 1-Mar 0.04% 3-May

RETURN
(%)

(%)

0.09% 1-Jun -0.04%2-Jul 0.31%

2-Mar -0.04%2-Mar -0.09%4-May -

0.05% 4-Jun -0.05%3-Jul 0.34%

5-Mar 0.02% 5-Mar 0.01% 7-May -

0.05% 5-Jun -0.02%4-Jul 0.11%

6-Mar 0.00% 6-Mar 0.22% 8-May

0.09% 6-Jun 0.01% 5-Jul

0.09%

7-Mar 0.02% 7-Mar 0.07% 9-May

0.02% 7-Jun 0.00% 6-Jul

0.47%

8-Mar 0.00% 8-Mar 0.01% 10-May

-0.09%8-Jun -0.09%9-Jul 0.40%

9-Mar 0.03% 9-Mar 0.02% 11-May

0.01% 11-Jun

12-Mar
11-Jul

0.14% 10-Jul 0.04%

0.03% 12-Mar
0.07%

-0.04%14-May

0.17% 12-Jun

0.10%

13-Mar
0.00% 13-Mar
12-Jul -0.08%

0.07% 15-May

0.06% 13-Jun

-0.05%

14-Mar
-0.02%14-Mar0.06%
Jul
0.17%

16-May

0.05% 14-Jun

-0.05%13-

16-Mar
16-Jul

0.05% 16-Mar
0.34%

0.00% 17-May

-0.04%15-Jun

0.10%

19-Mar
17-Jul

0.07% 19-Mar
0.15%

0.08% 18-May

0.00% 18-Jun

0.24%

20-Mar
0.08% 20-Mar
-0.05%19-Jul
0.14%

0.04% 21-May

0.08% 19-Jun

21-Mar
20-Jul

0.17% 21-Mar
0.46%

0.08% 22-May

-0.01%20-Jun

0.01%

22-Mar
23-Jul

0.03% 22-Mar
-0.17%

0.27% 23-May

0.05% 21-Jun

0.02%

23-Mar
-0.27%

-0.05%23-Mar 0.07%24-May

26-Mar
0.07% 26-Mar
-0.04%25-Jul
0.14%
28-Mar
26-Jul

28-Mar
-0.28%

-0.05%22-Jun

-0.17%25-May
-0.07%28-May

30-Apr
0.53%

-0.03%29-May-0.05%

30-May

-0.06%

31-May

0.10% 29-Jun

28-Jun

-0.01% 24-Jul

0.11% 25-Jun
0.15% 26-Jun

27-Jun

-0.12%

0.06%
27-Jul

0.13% 30-Jul -0.49%

-0.02%

31-Jul

TOTAL 0.50% TOTAL 0.64% TOTAL 0.58% TOTAL 0.27% TOTAL 2.47%
Avg.

Avg.

RETURNS
0.01%

Avg.

Avg.

Avg.

0.03% RETURNS
RETURNS
0.12%

0.03% RETURNS

0.03% RETURNS

BIRLA GILT PLUS - REGULAR

DATE NAV

DATE NAV

RETURN
RETURN
(%)

(%)

(%)

DATE

NAV

RETURN
(%)

DATE NAV

RETURN

DATE NAV

RETURN

(%)

1-Mar 0.04% 2-Apr 0.00% 3-May

0.08% 1-Jun 0.00% 2-Jul

0.29%

2-Mar -0.03%3-Apr -0.01%4-May

0.01% 4-Jun -0.04%3-Jul 0.07%

5-Mar -0.03%4-Apr 0.02% 7-May

0.06% 5-Jun 0.04% 4-Jul

6-Mar 0.10% 5-Apr 0.01% 8-May

0.05% 6-Jun -0.19%5-Jul 0.39%

7-Mar 0.01% 9-Apr 0.11% 9-May

0.03% 7-Jun 0.12% 6-Jul

0.47%

0.03%

8-Mar -0.15%10-Apr

0.03% 10-May

-0.03%8-Jun -0.19% 9-Jul 0.54%

9-Mar -0.01%11-Apr
-0.03%

-0.03%11-May

-0.01%11-Jun

-0.09%10-Jul

12-Mar
0.08% 12-Apr
-0.01%11-Jul
-0.04%

-0.02%14-May

0.12% 12-Jun

13-Mar
-0.02%13-Apr
-0.03%12-Jul
0.10%

0.02% 15-May

0.15% 13-Jun

14-Mar
13-Jul

0.02% 16-Apr
-0.08%

0.03% 16-May

0.07% 14-Jun

0.04%

16-Mar
16-Jul

0.00% 17-Apr
0.15%

0.07% 17-May

-0.05%15-Jun

0.05%

19-Mar
17-Jul

0.05% 18-Apr
0.33%

0.02% 18-May

-0.10%18-Jun

0.12%

20-Mar
-0.05%19-Apr
-0.05%19-Jul
0.05%

0.09% 21-May

0.23% 19-Jun

21-Mar
0.03% 20-Apr
-0.02%20-Jul
0.12%

0.03% 22-May

-0.04%20-Jun

22-Mar
23-Jul

0.13% 23-Apr
0.51%

0.04% 23-May

0.00% 21-Jun

0.03%

23-Mar
24-Jul

0.02% 24-Apr
-0.13%

0.75% 24-May

-0.02%22-Jun

0.00%

26-Mar
25-Jul

0.02% 25-Apr
-0.11%

0.08% 25-May

0.05% 25-Jun

0.12%

28-Mar
0.04% 26-Apr
-0.10%26-Jul
0.16%

-0.26%28-May

0.07% 26-Jun

30-Mar
0.03% 27-Apr
Jul
-0.13%

-0.17%29-May

-0.03%27-Jun

30-Apr

-0.04%30-May-0.01%28-Jun

31-May 0.04%29-Jun

0.22% 30-Jul 0.17%

0.01% 31-Jul -0.04%

TOTAL 0.28% TOTAL 0.77% TOTAL 0.67% TOTAL -0.07%

Avg.

Avg.

RETURNS
0.00%

Avg.

Avg.

TOTAL 2.82%

Avg.

0.01% RETURNS
RETURNS
0.13%

HDFC LIQUID FUND

-0.10%27-

0.04% RETURNS

0.03% RETURNS

PRU ICICI LIQUID

MAGNUM INST. CASH

INTERPRETATION:

BETA
In Liquid most of the schemes has shown more volatility except HDFC Liquid
Fund and JM Basic Fund. All other funds has been volatile as compared to SENSEX.
ALPHA . As the nature of Liquid Fund is to provide easy liquidly to investors, therefore
the return accepted from this type of fund is also less. Among these funds Magnum
Instacash has given less returns as compared to other funds.

STANDARD DEVIATION
Among the above mentioned schemes Pru ICICI has shown more volatility in its
portfolio. But Magnum Insta cash has shown no deviation in its portfolio.
Therefore for short term investors HDFC Liquid Fund is suitable as it has given
returns and at the same time in has not shown much volatility as compared to SENSEX
returns.

Remember to pack the following investment gems in your luggage as you set forth on
your financial journey. These guideposts reinforce and expand the key points covered
throughout Building Your Mutual Fund Portfolio.
Diversify for investment success: Develop a solid plan based on your age, time
horizon, liquidity needs, income and risk tolerance. Stick with it until your circumstances
change.

 Periodically rebalance your holdings to your original asset allocation

benchmark: By doing this, you will wind up selling shares in expensive funds and
reinvesting in cheaper ones.
Invest as much as you can in stock funds: As a rough rule, try to hold a
percentage at least equal to 100 minus your age in stocks. Senior citizens might
consider 110 minus their ages to avoid growing too conservative.
Dont hop from fund to fund: Traders often lag the long-range returns of thestock and
bonds markets.
Set your sights on building wealth slowly: Get rich quick schemes often
backfire. People who amass fortunes through speculation frequently also learn how
itfeels to get poor quickly.
Keep it simple: Basic investment plans often work best on the quest for wealth.
Avoid gimmicks: Dont invest in anything you dont understand. Pain vanilla
funds survive the test of time better than faddish peers that make use of derivatives and
other arcane strategies.
Do your home work before starting out: Never buy or sell Mutual Funds solely on the
basis of tips. If a suggestion seems to have merit, do your own analysis.
Focus on risk, return and cost when evaluating funds: Keep in mind that a
funds risk and expenses are easier to predict than its return.
Judge past performance with a grain of salt: Historic returns dont always
predict future results, especially if a funds management or investment style has
changed recently.
Dont neglect the prospectus: Youll find the guts of this document in the
financial - highlights. Look for past expense rations, portfolio turnovers, total annual
returns and year to year changes in assets.
Consider hiring a stockbroker or financial planner if you need help with your portfolio:
Just make sure the individual is competent and will your needs. The more you
understand about investment risks, return and costs, better you can evaluate the kind of
jobs your advisor is doing.
Dont overlook estate planning in your investment game plan: A living trust has
important advantage over a will.

 Make sure your Mutual Fund accounts are titled correctly: Individual, joint,
custodial and trust account are four common alternatives. The manners of titling takes
precedence over any instructions in your heirs know about your accounts.
Take advantage of fund company service: Telephone reps often can furnish answers
to your questions.

Let time work for you: At 10 percent annually - the long run average return on stocks
your money doubles every 7.3 years, quadruples every 14.6 years and expands tenfold
every 24.2 years.
Emphasize time over market timing: Buy good stock funds and stay with them for the
long haul. Even professional have trouble predicting the markets next move.
Invest regularly: Its been demonstrated that you can do well over the long haul even
if you invest money each year at or near the markets annual peak.
Recognize that the risk of being in stock decreases as your holding period
lengthens: Known as time diversification, it works because the good years far outweigh
the bad over lengthy period. On average, seven out of every ten years are winners in the
stock market.
Save as much of your paycheck as you can: The older you get and the higher your
income, the larger the percentage you should strive to set aside.
Consider painless and efficient automatic investment plans, as offered by
many fund companies. Your monthly investment go straight into your chosen fund from
either a bank account or your paycheck.
Pay attention to what T-bills yield relative to stocks: by dividing the yield on
the former by the yield on the latter, when 91 days T-bills yield more than twice the
sensex 30s yield, it could signal that stocks have become overpriced.
Conversely, recognize the excellent value offered by stocks any time the T- bills
/stock yield ration is considerably below 2. At the extreme, stock market condition could
be highly favorable when both numbers are about equal.
Dont expect good or bad times to last forever. Stocks can stay overvalued or
undervalued for surprisingly long stretches, but bull markets always come to an end, and
o do bear markets.
Use standard deviation instead of beta to evaluate a mutual fund risk: The
former is a pure, unbiased measure of volatility, which is not tied to a particular stock-

price index as is beta. Standard deviation measures the extent to which returns bob up
and down around their average.
Examine your funds composite PE ratio: The average price earnings ratio for all the
stocks it holds. If a funds PE is well above that of the sensex 30s, it faces greater
possible losses in a correction or bear market.
Remember that volatile funds might not be so bad when held in appropriate
proportions within a broad portfolio. Combining funds that rise and fall at different times
could result in an overall smoother ride.
Combine funds that follow the growth and value stock picking styles: as one
style normally is out of favour when the other is in. your portfolios fluctuations will be
less erratic if you include investments from both camps.
Dont give up stock funds, even if youre retired: A 65 year old retiree can
expect to live another 20 years or so. If you need income, take your dividends in cash. If
thats insufficient, make systematic withdrawals from a diversified portfolio.
But dont set up a systematic withdrawal plan without forst calculating how
long your capital will last: given your expected return and withdrawal rate. Considering
the impact of taxes and inflation, you risk depleting your nest egg if your annual
withdrawal rate exceeds about 6 percent.
Stay away from funds that are not members of reputable families: Unless you know
the manager has an excellent record. In particular, avoid tiny funds those with assts less
than 400 million unless they are promising members of an established group.
Dont assume that laggard funds will bounce back: Long term losers have
perennially poor performance records, along with outsized expenses, a small and
declining asset base, high portfolio turnover and, sometimes, legal problems.
Dont look to your nest egg for thrills and excitement: Some times, relatively dull
investments, such as index funds, are best.
Keep in minds that about 70 percent of actively managed funds under
perform the market: because operating expenses, transaction costs and cash holdings
lower returns. This represents the main argument in favor of index funds.
Favor index funds for a meaningful core portion of your stock allocation:
say 25 to 50 percent or so. With these portfolios you need not worry that a fund manager
might jump ship. With a passive approach, it doesnt matter so much whos in control.

 Beware of gimmicks when shopping for an index fund: Avoid enhanced

index portfolios that claim they can outperform the sensex or other benchmarks. Plain
vanilla products with rock bottom costs are best.
Include small cap and international funds in your portfolio for better risk
adjusted performance: Younger investors with long time horizons should take a
significant stake in these categories.
Look beyond a funds name to its actual investment policies and portfolio
holdings.
Avoid small stock portfolios with assets greater than 20,000 million or so
unless youre convinced the management is exceptionally talented.
Keep in mind that small stocks move in cycles of five to seven years, during
which they either outperform or underperform the large blue chips.
Conversely, do take bigger positions in small stocks when theyre cheap:
Small companies represent excellent value when the PE of any funds approximates that
of the sensex.
Dont hesitate to venture abroad: International investing is a great way to round out a
portfolio, since about two-thirds of world stock market values exist outside India.
Lean to international rather than global funds for your over-seas exposure:
The former invest exclusively in foreign markets, whereas the latter have stakes in
stateside stocks as well. With international funds, you can fine tune your overseas
exposure more precisely.
Check the foreign weightings of your domestic stock funds: which could hold up to 15
percent or more of their assets in non- Indian issues to try to improve performance. You
may already have more international exposure than you think.
Maintain modest stake in emerging stock markets: as well if you have a
lengthy investment horizon. Developing nations offer exciting long term growth
potential.
Dont expect international diversification to reduce your portfolios volatility
all the time: Normally, it works reasonably well, but during a global panic, all the worlds
major stock exchanges could tumble together.

CONCLUSION:

In order to study the concept of mutual fund we should note that a mutual fund is a trust
that pools the money of several investors and manages investments on behalf. The fund
collects this money from investors through various schemes. Each schemes is
differentiated by its objectives of investments or in other words a broadly defined
purpose of how the collected money is going to be involved.

Investors invest in mutual fund due to following advantages: they have

professional management, diversification, convenient administration, return potential,
low cost, liquidity. By comparing the above mentioned schemes I came to know the risk
and return relation between the specified schemes.

From ALPHA I came to know how Mutual Fund schemes performed and get highest
return with the low risk factor .ALPHA of JM Morgan ,Reliance Vision Fund and Birla
Midcap funds is highest and low risk , as a result investor get good return from this
schemes

BETA helps me to analyzing high volatility in market as result investor get low return with
high risk. BETA indicates that HDFC Schemes, JM Morgan and Magnum Balance Funds
are less volatility in the sensex because this schemes provide easy liquidly to investor
and return accepts from this fund is also less.

The standard deviation helps to understand the volatility of market. Investor can averse
the risk of their existing investment. It also help to measuring the degree to which the
fund fluctuates in relation to its mean return but investor get more returns as compare to
other schemes. A Birla and Franklin Equity fund has less risk but get more return to
investor.

Therefore investors before investing in any Mutual Fund schemes they should study the

risk and return relation. And if the risk and returns is been matched with their planning,
then only the investors should go for Mutual Fund schemes.

According to me investor needs to focus on risk, return and value of his schemes and
keep in mind that funds risk and expenses are easier to analysis for good returns.