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CHAPTER-1
INTRODUCTION
DESCRIPTIVE RESEARCH:
In this research an attempt has been made to analyze the past performance of the
Reliance Mutual schemes and to know the benefits to the investors. The study is to be
done on different schemes provided by the company to know the company’s performance
for the past few months and to know the risk and returns of the funds.
SOURCES OF DATA:
• Secondary source of data
The source of data were only the secondary source as the comparison of the schemes
were done keeping BSE sensex as the base and thus the project did not require any first
hand information in the form of primary source. The data were collected through, the
sources like the www.Reliancemutual.com for getting the NAV’s of past five years ,
announcement of publishing of company and other sites used in the project were
www.mutualfundsindia.com, www.bseindia.com and other internet sites, fact sheets of
various mutual funds.
• Beta:
• Standard deviation
• Alpha
• Sharpe Ratio
• Treynor Ratio
CONCEPTUAL DESIGN:
CHAPTER-2
COMPANY PROFILE
About Reliance Capital Asset Management Ltd.
Reliance Capital Asset Management Limited (RCAM) was approved as the Asset
Management Company for the Mutual Fund by SEBI vide their letter no
IIMARP/1264/95 dated June 30, 1995. The Mutual Fund has entered into an Investment
Management Agreement (IMA) with RCAM dated May 12, 1995 and was amended on
August 12, 1997 in line with SEBI (Mutual Funds) Regulations, 1996. Pursuant to this
IMA, RCAM is authorized to act as Investment Manager of Reliance Mutual Fund. The
net worth of the Asset Management Company including preference shares as on
September 30, 2007 is Rs.152.02 crores. Reliance Mutual Fund has launched thirty-five
Schemes till date, namely:
Reliance Capital Asset Management Limited (RCAM) was approved as the Asset
Management Company for the Mutual Fund by SEBI vide their letter no
IIMARP/1264/95 dated June 30, 1995. The Mutual Fund has entered into an Investment
Management Agreement (IMA) with RCAM dated May 12, 1995 and was amended on
August 12, 1997 in line with SEBI (Mutual Funds) Regulations, 1996. Pursuant to this
IMA, RCAM is authorized to act as Investment Manager of Reliance Mutual Fund. The
networth of the Asset Management Company as on March 31, 2008 is Rs 709.39 crores.
Reliance Mutual Fund has launched Forty Three Schemes till date, namely:
VISION STATEMENT
MISSION STATEMENT
Reliance Mutual Fund (RMF) has been established as a trust under the Indian Trusts
Act, 1882 with Reliance Capital Limited (RCL), as the Settlor/Sponsor and Reliance
Capital Trustee Co. Limited (RCTCL), as the Trustee.
RMF has been registered with the Securities & Exchange Board of India (SEBI)
vide registration number MF/022/95/1 dated June 30, 1995. The name of Reliance
Capital Mutual Fund has been changed to Reliance Mutual Fund effective 11th. March
2004 vide SEBI's letter no. IMD/PSP/4958/2004 date 11th. March 2004. Reliance Mutual
Fund was formed to launch 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
Reliance Mutual Fund (RMF) is one of India’s leading Mutual Funds, with Average
Assets Under Management(AAUM) of Rs. 71,094 Crores (AAUM as on 31st Oct 2008)
and an investor base of over 70.68 Lakhs
\
To carry on the activity of a Mutual Fund as may be permitted at law and formulate
and devise various collective Schemes of savings and investments for people in India
and abroad and also ensure liquidity of investments for the Unit holders;
To deploy Funds thus raised so as to help the Unit holders earn reasonable returns on
their savings and to take such steps as may be necessary from time to time to realize
the effects without any limitation.
Equity/Growth Schemes
The aim of growth funds is to provide capital appreciation over the medium to
long- term. Such schemes normally invest a major part of their corpus in equities. Such
funds have comparatively high risks. These schemes provide different options to the
investors like dividend option, capital appreciation, etc. and the investors may choose an
option depending on their preferences. The investors must indicate the option in the
application form. The mutual funds also allow the investors to change the options at a
later date. Growth schemes are good for investors having a long-term outlook seeking
appreciation over a period of time.
Debt/Income Schemes
The aim of income funds is to provide regular and steady income to investors.
Such schemes generally invest in fixed income securities such as bonds, corporate
debentures, Government securities and money market instruments. Such funds are less
risky compared to equity schemes. These funds are not affected because of fluctuations in
equity markets. However, opportunities of capital appreciation are also limited in such
funds. The NAVs of such funds are affected because of change in interest rates in the
country. If the interest rates fall, NAVs of such funds are likely to increase in the short
run and vice versa. However, long term investors may not bother about these fluctuations.
These are the funds/schemes which invest in the securities of only those sectors or
industries as specified in the offer documents. e.g. Pharmaceuticals, Software, Fast
Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are
dependent on the performance of the respective sectors/industries. While these funds may
give higher returns, they are more risky compared to diversified funds. Investors need to
keep a watch on the performance of those sectors/industries and must exit at an
appropriate time. They may also seek advice of an expert.
EQUITY/GROWTH SCHEMES
Reliance Natural Resources Fund :
(An Open Ended Equity Scheme) The primary investment objective of the scheme
is to seek to generate capital appreciation & provide long-term growth opportunities by
investing in companies principally engaged in the discovery, development, production, or
distribution of natural resources and the secondary objective is to generate consistent
returns by investing in debt and money market securities.
(An Open-ended Scheme.) Equity Option: The primary investment objective of this
option is to seek capital appreciation and/or to generate consistent returns by actively
investing in Equity &Equity-related Securities.
DEBT/LIQUID SCHEMES
Reliance Gilt Securities Fund - Short Term Gilt Plan & Long Term Gilt Plan :
Open-ended Government Securities Scheme) The primary objective of the Scheme
is to generate Optimal credit risk-free returns by investing in a portfolio of securities
issued and guaranteed by the central Government and State Government
Sector Funds are specialty funds that invest in stocks falling into a certain sector of
the economy. Here the portfolio is dispersed or spread across the stocks in that particular
sector. This type of scheme is ideal for investors who have already made up their mind to
confine risk and return to a particular sector.
CHAPTER-3
REVIEW OF LITERTURE
A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities. The income earned through
these investments and the capital appreciations realized are shared by its unit holders in
proportion to the number of units owned by them. Thus a Mutual Fund is the most
suitable investment for the common man as it offers an opportunity to invest in a
diversified, professionally managed basket of securities at a relatively low cost. The flow
Chart below describes broadly the work
• Professional Management
1 • Convenient Administration
2 • Return Potential
3 • Low Costs
4 • Liquidity
5 • Transparenc
6 • Flexibility
7 • Choice of schem
8 • Tax benefits
9 • Well regulated
When three Boston securities executives pooled their money together in 1924 to
create the first mutual fund, they had no idea how popular mutual funds would become.
The idea of pooling money together for investing purposes started in Europe in the
mid-1800s. The first pooled fund in the U.S. was created in 1893 for the faculty and staff of
Harvard University. On March 21st, 1924 the first official mutual fund was born. It was
called the Massachusetts Investors Trust.
After one year, the Massachusetts Investors Trust grew from $50,000 in assets in
1924 to $392,000 in assets (with around 200 shareholders). In contrast, there are over 10,000
mutual funds in the U.S. today totaling around $7 trillion (with approximately 83 million
individual investors) according to the Investment Company Institute.
The stock market crash of 1929 slowed the growth of mutual funds. In response to the
stock market crash, Congress passed the Securities Act of 1933 and the Securities Exchange
Act of 1934. These laws require that a fund be registered with the SEC and provide
prospective investors with a prospectus. The SEC (U.S. Securities and Exchange
Commission) helped create the Investment Company Act of 1940, which provides the
guidelines that all funds must comply with today.
With renewed confidence in the stock market, mutual funds began to blossom. By the
end of the 1960s there were around 270 funds with $48 billion in assets.
In 1976, John C. Bogle opened the first retail index fund called the First Index Investment
Trust. It is now called the Vanguard 500 Index fund. In November of 2000 it became the
largest mutual fund ever with $100 billion in assets.
The history of Mutual Funds in India can be broadly divided into 4 Phases:
1 � The Unit Trust of India (UTI) was established in the year 1963 by passing an
3 �The UTI was setup by the Reserve Bank of India (RBI) and functioned under
5 �The First scheme in the history of mutual funds was UNIT SCHEME-64,
7 �In 1978, UTI was de-linked from RBI. The Industrial Development Bank of
9 �At the end of the year 1988, UTI had Rs.6,700/- Crores of Assets Under
10 Management.
2 �In the year 1987, public sector Mutual Funds setup by public sector banks,
5 �State Bank of India Mutual Fund was the first non-UTI Mutual Fund.
At the end of 1993, the entire Mutual Fund Industry had Assets under Management of
2 investors.
3 �In 1993, the first Mutual Fund Regulations came into existence, under which
5 �The Erstwhile Kothari Pioneer (now merged with Franklin Templeton) was
7 �In 1996, the 1993 Securities Exchange Board of India (SEBI) Mutual Funds
9 Fund Regulations.
10 �The number of Mutual Fund houses went on increasing, with many foreign
12 �In this time, the Mutual Fund industry has witnessed several Mergers
13 &Acquisitions.
14 �The UTI with Rs.44, 541/- Crores. Of Assets Under management was way
The diagram below shows the three segments and some players in each segment:
1 �Following the repeal of the UTI Act in February 2003, it was (UTI)
3 �One is the specified undertaking of the UTI with asset under management of
5 �The second is the UTI Mutual Funds Limited, sponsored by State Bank of
6 India, Punjab National Bank, Bank of Baroda and Life Insurance Corporation
7 of India.
9 the Government of India and does not come under the purview of the
11 �The UTI Mutual Funds Limited is registered with SEBI and functions under
13 �With the bifurcation of the Erstwhile UTI, with the setting up of a UTI
14 Mutual Fund, confirming to the SEBI Mutual Fund Regulations and with
16
place among different private sector funds, the Mutual Fund Industry has entered its
current phases of consolidation and growth.
1 �At the end of September 2004, there were 29 funds, which manage assets of
3 �At the end of March 2006, the status of Mutual fund Industry was:
The following graph shows the amount invested in Mutual Fund Industry
AMFI is an apex body of all Asset Management Companies (AMC) which has
been registered with Securities Exchange Board of India (SEBI). Till date all the AMCs
are that have launched mutual fund schemes are its members. It functions under the
supervision and guidelines of its Board of Directors.
Association of Mutual Funds India has brought down the Indian Mutual Fund
Industry to a professional and healthy market with ethical lines enhancing and
maintaining standards. It follows the principle of both protecting and promoting the
interests of mutual funds as well as their unit holders.
1 �This Mutual Fund Association of India maintains high professional and ethical
standards in all areas of operation of the industry.
2 �It also recommends and promotes the top class business practices and code of
conduct which is followed by members and related people engaged in the
activities of Mutual Fund and Asset Management. The agencies who are by any
means connected or involved in the field of capital markets and financial services
also involved in this code of conduct of the association.
1 �AMFI interacts with SEBI and works according to SEBIs guidelines in the
Mutual Fund industry.
5 �At last but not the least Association of Mutual Fund of India also disseminate
information on Mutual Fund Industry and undertakes studies and research either
directly or in association with other bodies.
Institutions
Indian:
AMFI publishes mainly two types of bulletin. One is on the monthly basis and the
other is quarterly. These publications are of great support for the investors to get
intimation of the know how of their parked money. inly
The Government brought Mutual Funds in the Securities market under the
regulatory framework of the Securities and Exchange board of India (SEBI) in the year
1993. SEBI issued guidelines in the year 1991 and comprehensive set of regulations
relating to the organization and management of Mutual Funds in 1993.
The regulations bar Mutual Funds from options trading, short selling and carrying
forward transactions in securities. The Mutual Funds have been permitted to invest only
in transferable securities in the money and capital markets or any privately placed
debentures or securities debt. Restrictions have also been placed on them to ensure that
investments under an individual scheme, do not exceed five per cent and investment in all
the schemes put together does not exceed 10 per cent of the corpus. Investments under all
the schemes cannot exceed 15 per cent of the funds in the shares and debentures of a
single company.
SEBI grants registration to only those mutual funds that can prove an efficient and
orderly conduct of business. The track record of sponsors, a minimum experience of five
years in the relevant field of Investment, financial services, integrity in business
transactions and financial soundness are taken into account. The regulations also
prescribe the advertisement code for the marketing schemes of Mutual Funds, the
contents of the trust deed, the investment management agreement and the scheme-wise
balance sheet. Mutual Funds are required to be formed as trusts and managed by
separately formed as trusts and managed by separately formed Asset Management
Companies (AMC). The minimum net worth of such AMC is stipulated at Rs.5 crores of
which, the Mutual Fund should have a custodian who is not associated in any way with
the AMC and registered with the SEBI.
The minimum amount raised in closed-ended scheme should be Rs.20 Crores and
for the open-ended scheme, Rs.50 Crores. In case, the amount collected falls short of the
minimum prescribed, the entire amount should be refunded not later than six weeks from
the date of closure of the scheme. If this is not done, the fund is required to pay an
interest at the rate of 15 per cent per annum from the date of expiry of six weeks. In
addition to these, the Mutual Funds are obliged to maintain books of accounts and
provision for depreciation and bad debts.
Further, the Mutual Funds are now under the obligation to publish scheme-wise
annual reports, furnish six month un-audited accounts, quarterly statements of the
movements of the net asset value and quarterly portfolio statements to the SEBI. There is
also a stipulation that the Mutual Funds should ensure adequate disclosures to the
investors. SEBI has agreed to let the Mutual Funds buy back the units of their schemes.
However, the funds cannot advertise this facility in their prospectus. SEBI is also
empowered to appoint an auditor to investigate into the books of accounts or the affairs
of the Mutual Funds.
SEBI can suspend the registration of Mutual Funds in the case of deliberate
The increase in the number of MFs and the types of schemes offered by them
necessitated uniform norms for valuation of investments and accounting practices in
order to enable the investors to judge their performance on a comparable basis. The
Mutual Fund Regulations is sued in December 1996 provide for a scheme-wise report
and justification of performance, disclosure of large investments which constitute a
significant portion of the portfolio and disclosure of the movements in the unit capital.
The existing Asset Management Companies are required to increase their net
worth from Rs.10 crores within one year from the date of notification of the amended
guidelines. AMCs are also allowed to do other fund-based businesses such as providing
investment management services to offshore funds, other Mutual Funds, Venture Capital
Funds and Insurance Companies. The amended guidelines retained the former fee
structure of the AMCs of 1.25% of weekly average Net Asset Value (NAV) up to Rs.100
crores and 1% of NAV for net assets in excess of Rs.100 crores.
The consent of the investors has to be obtained for bringing about any change in
the fundamental attributes of the scheme on the basis of which the unit holders had made
initial investments. The regulation empowers the investor. The amended guidelines
require portfolio disclosure, standardization of accounting policies, valuation norms for
NAV and pricing. The regulations also sought to address the areas of misuse of funds by
introducing prohibitions and restrictions on affiliate transactions and investment
exposures to companies belonging to the group of sponsors of mutual funds. The
payment of early bird incentive for various schemes has been allowed provided they are
viewed as interest payment of early bird incentive for early investment with full
disclosure.
The various Mutual Funds are allowed to mention an indicative return for
schemes for fixed income securities. In 1998-99 the Mutual Funds Regulation were
amended to permit Mutual Funds to trade in derivatives for the purpose of hedging and
portfolio balancing. SEBI registered Mutual Funds and Fund managers are permitted to
invest in overseas markets, initially within an overall limit of US $500 million and a
ceiling for an individual fund at US$ 50 million.
SEBI made (October 8, 1999) investment guidelines for MFs more stringent. The
new guidelines restrict MFs to invest no more than 10% of NAV of a scheme in share or
share related instruments of a single company. MF’s in rated debt instruments of a single
issuer is restricted to 15% of NAV of the scheme (up to 20% with prior approval of
Board of Trustees or AMC). Restrictions in un- rated debt instruments and in shares of
unlisted companies. The new norms also specify a maximum limit of 25% of NAV for
any scheme for investment in listed group companies as against an umbrella limit of
25% of NAV of all schemes taken together earlier. SEBI increased (June 7, 2000) the
maximum investment limit for MFs in listed companies from 5% to 10% of NAV in
respect of open-ended funds. Changes in fundamental attributes of a scheme was also
allowed without the consent of three fourths of unit holders provided the unit holders are
given the exit option at NAV without any exit load. MFs are also not to make assurance
or claim that is likely to mislead investors. They are also banned from making claims in
advertisement based on past performance.
Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial
position, risk tolerance and return expectations etc. The table below gives an overview
into the existing types of schemes in the Industry.
By Structure
3 �Interval Schemes
1 By Investment Objective
Growth/Equity Schemes
0 General Purpose
1 Income/Debt Funds
2 Money Market
3 Guilt Funds
4 Balanced Schemes
Other Schemes
�Special Schemes:
�Index Schemes
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.
Gilt Funds
These primarily invest in Government Debt. Hence, the investor usually does not
have to worry about credit risk since Government Debt is generally credit risk free. The
investor is open to Interest risk, where the value of the securities changes in relation to
the market scenario. Sahara Gilt Fund is an example of one such scheme.
Special Schemes
These schemes restrict their investing to one or more pre-defined sectors, e.g.
technology sector. They depend upon the performance of these select sectors only and are
hence inherently more risky than general-purpose equity schemes. Ideally suited for
informed investors who wish to take a view and risk on the concerned sector. The Tata
Life Sciences and Technology Fund is an example of sector specific equity scheme.
Index schemes:
At the end of 2006 March, Indian mutual fund industry reached Rs. 2, 57, 499
crores. It is estimated that by 2010 March-end, the total assets of all scheduled
commercial banks should be Rs. 40, 90, 000 crores.
The annual composite rate of growth is expected 13.4% during the rest of the
decade. In the last 5 years we have seen annual growth rate of 9%. According to the
current growth rate, by year 2010, mutual fund assets will be double.
Going by the above facts and generally, mutual funds have often been considered
a good route to invest and earn returns with reasonable safety. Small and big investors
have both invested in instruments that have suited their needs. And so equity and debt
funds have attracted investments alike. The performance of the investments, equity in
particular, for the last one-year, has however been disappointing for the investors.
The fall in NAVs of equity funds, and it is really steep in some, even to the extent
of 60-70 percent, has left investors disgusted. Such backlash was only to be expected
when funds, in a hurry to post good returns invested in volatile tech stocks. The move,
though good under conducive market conditions, is the point of rebuttal now. Owing to
volatility in market and profit warnings by some IT majors, tech stocks have been on the
downhill journey and the result is fall in NAVs of most equity funds.
This hurts the investor but then investments in equity are never safe. Mutual funds
are not just guilty of mismanaging their risks as the recent survey by Pricewaterhouse
Coopers indicates but also not educating their investors enough on the risks facing them.
It is for the mutual benefit of the investors as well as mutual funds that investor is
educated enough or else an agitated investor might route his investments to other avenues
that are considered safe.
Debt funds are safe investments and generate returns far in excess of what other so-called
safe avenues such as banks generate. Despite this, the inflow of funds in debt funds and
banks is by no means comparable. The factor contributing to this the lack of
understanding caused by improper guidance by the intermediaries.
Till now, Investor education has been one of the issues, less cared for, by the
industry. The industry focused upon the amounts and not why a person wanted to invest
or whether a particular product suited him or not. While educating the customer might
not have been on the cards earlier, the things are beginning to change now.
With SEBI passing on the guidelines, the funds will engage in investor education.
The guidelines state that funds will utilize the income earned on unclaimed money lying
with them for a period exceeding three years to educate the investors. AMFI has started a
certification program for intermediaries. This will be made mandatory for the
intermediaries and is aimed at educating the investors about the risks attached to the
schemes and to inculcate adequate skills into the intermediaries to help the investors
choose the right kind of fund. Steps such as these are aimed at obliterating various flaws
in the system by standardizing the knowledge base of intermediaries, as they are the
interface between the investor and the funds.
Although the investors themselves are also guilty of picking funds that were not
suited for them, the blame can’t lie square on their shoulders alone. The industry has also
got to bear some of it. With such programs becoming mandatory, it can be ensured to
some extent that ignorance ceases to be an aspect associated with the industry.
Till now, investors have been ignorant about the kind of fund to be picked or how
to select a fund. Teaching an investor how to select a fund is thus an important aspect.
Educated investors can, on their part, ask pertinent questions to find funds that qualify to
be in their portfolio as per their risk bearing capacity.
It would not be improper to say that investor education is still the key to managing the
funds handed over by investors. The investors are important to the industry and likewise,
mutual funds form an important avenue for an investor. It would thus be of critical
importance to educate people for an informed investor is in the best position to pick up
Schemes as per his need. This would also infuse some confidence in the minds of the
investors who under the current scenario seem to be losing faith on account of the falls
suffered in recent times. An educated and informed intermediary stands the best chance
of understanding the needs of the client and also of winning his confidence through
proper guidance. As it is, investor education will remain a key issue for mutual funds in
the longer run and educating the intermediaries will be the first step towards it.
A rational investor before investing his/her money in stock analysis the risk
associated with the particular stock. The actual returns he receives from the stock may
vary from the expected one and thus an investor is always caution about the rate of risk
associated with particular stock. hence it becomes very essential on the part of investors
to know the risk as the hard earned money is being invested with the view to good return
on investment.
Risk mainly consists of two components.
• Systematic risk
• unsystematic risk
Systematic risk
The systematic risk affects the entire market. The economic conditional, political
situation, sociological change affects the entire market in turn affecting the company and
even the stock market. These situations are uncontrollable by corporate and investeors.
Unsystematic risk
The Unsystematic risk is unique to industries. It differs from industries to
industries. Unsystematic risk stems from managerial inefficiency, technological change
in production process, availability of raw materials, change in the customer preference
and labour problem. The nature and magnitude of above mentioned factors differ from
industry to industry and company to company.
In general view, the risk for any investor would be the probably loss from
investing money in any mutual fund.but when look at the technical side of its, we cant
just say these schemes/ fund carry risk without any proof. They are certain set formulas to
say the percentage risk associated with it.
There are certain tools or formulas used to calculate the risk associated with
schemes. These tools helps us to understand the associated wit the schemes. These
schemes are compared with the benchmark BSE 100
Arithmetic mean
AM=Σy/N
Where y= returns of NAV values
N= number of observation
Average returns that can be expected from investment. The Arithmetic returns is
appropriate as a measure of a central tendency of a number of returns calculated from
particular time i.e. for 5 years.
RETURNS
Investor wants to maximize expected retunes subject to their tolerance for risk.
Returns are the motivating force and principal reward in investment process and it is the
key method available to investors in comparing alternative the investments. Measuring
the historical returns allows investor to access the how well the stocks have performed.
Investor get returns either in form of interest, dividend or capital appreciation. There are
two terms, realized term and expected return. Realized return earned in past.
STANDARD DIVEATION
The Standard deviation is measure of the variables around its mean or it is square root of
the sum of the squared root deviations from the mean divided the number of observation.
S.D is used to measure the variability of return i.e the a measure of dispersion. S.D is
calculated as the square root of variation. In finance investments volatility.S.D is also
know as historical volatility and its used by investors as a gauge from the amounted of
volatility.
S.D=√(y-Y)²
N
Where y= return of portfolio
Y=average return of portfolio
N= number of months
BETA: Beta describes the relationship between the securities return and the index
returns.
1 Beta = + 1.0
One percent change in market index returns causes exactly one percent change in the
security return. It indicates that the security moves in tandem with the market.
1 Beta = + 0.5
One percent change in the market index return causes 0.5 percent change in the security
return. The security is less volatile compared to the market.
1 Beta = + 2.0
One percent change in the market index return causes 2 percent change in the security
return. The security return is more volatile. When there is a decline of 10% in the market
return, the security with beta of 2 would give a negative return of 20%. The security with
more than 1 beta value is considered to be risky.
1 Negative Beta
Negative beta value indicates that the security return moves in the opposite direction to
the market return. A security with a negative beta of -1 would provide a return of 10%, if
the market return declines by 10% and vice-versa.
Beta= N*Σxy-(Σx)(Σy)
N*Σ(x)²-(Σx)²
Where
N=No of observation
X=Total of market index value
Y=Total of return to Nav
ALPHA:
Alpha represent the forecast of residual return, which we consider the future
return of any portfolio. Alpha measures the unsystematic risk of a portfolio property
because the portfolio property also consists of both residual return and future expectation.
It is important to remember that the risk-free portfolio will always show a zero
residual return hence, any risk less security like cash will have always alpha equal to
zero. A positive alpha of 1.0 means the fund has outperformed its benchmark index by
1% correspondingly, a similar negative alpha would indicate an underperformance of 1%.
Alpha indicates that the stock return is independent of the market return .A positive
value of alpha is a healthy sign. Positive alpha values would yield profitable return.
Where
SHARPE RATIO
The performance measure developed by William sharpe is referred to as the sharpe
ratio or the reward to variability ration. It is the ratio of the reward or risk to the
variability of return or risk measured by the standard deviation of return the formula for
calculating sharpe ratio may be stated as:
Sharpe ratio= Rp-Rf
S.D
Where,
Rp=Realised return on the portfolio.
Rf=Risk free rate of return.
S.D=standard deviation of portfolio return
Sharpe performance index gives a single value to be used for the performance ranking of
various fund or portfolio. sharpe index measures the risk premium of the portfolio
relative to the total amount of risk in the portfolio. The risk premium is the difference
between the portfolio’s average rate of return and the risk less rate of return. The standard
Deviation of the portfolio indicates the risk.
Higher the value of sharpe ratio better the fund has performed. Sharpe ratio can be used
to rank the desirability of fund or portfolio. The fund that has performed well compared
to other will be rank first than others.
Treynor ratio
The performance measure by jack. Treynor is referred to as Treynor ratio or
reward to volatility ratio. It is the ratio of the reward or risk premium to the volatility of
return as measuring by the portfolio beta. The formula for calculating Treynor ratio may
be stated as:
Treynor ratio= Rp-Rf
Beta
Where:
Rp= realized return on the portfolio
Rf= risk free rate of return
Beta=portfolio beta.
CHAPTER-4
ANALYSIS AND INTERPRETATION
4000 40
3500 35
3000 30
2500 25
index
2000 20
Navs
1500 15
1000 10
500 5
0 0
1 2 3 4 5 6 7 8 9 10 11 12
Analysis:
The above graph shows the movement of NAV of reliance growth fund and
Benchmark index for the period from Jan 2004 to Dec 2004. From the above graph we
can see there is some correlation between the movement of both
6000 60
5000 50
4000 40
index
3000 30
Navs
2000 20
1000 10
0 0
1 2 3 4 5 6 7 8 9 10 11 12
Analysis:
The above graph shows the movement of NAV of reliance growth fund and
Benchmark index for the period from Jan 2004 to Dec 2004. From the above graph we
can see there is some correlation between the movement of both
6000 60
5000 50
4000 40
index
3000 30 Nav
2000 20
1000 10
0 0
1 2 3 4 5 6 7 8 9 10 11 12
Analysis:
The above graph shows the movement of NAV of reliance growth fund and
Benchmark index for the period from Jan 2004 to Dec 2004. From the above graph we
can see there is some correlation between the movement of both
12000 90
80
10000
70
8000 60
50 index
6000
40 Navs
4000 30
20
2000
10
0 0
1 2 3 4 5 6 7 8 9 10 11 12
Analysis:
The above graph shows the movement of NAV of reliance growth fund and
Benchmark index for the period from Jan 2004 to Dec 2004. From the above graph we
can see there is some correlation between the movement of both
10000 80
9000
70
8000
60
7000
50
6000
index
5000 40
Navs
4000 30
3000
20
2000
1000 10
0 0
1 2 3 4 5 6 7 8 9 10 11 12
Analysis:
The above graph shows the movement of NAV of reliance growth fund and
Benchmark index for the period from Jan 2004 to Dec 2004. From the above graph we
can see there is some correlation between the movement of both
1) STANDARD DEVIATION
S.D= √ (y-Y)
N
STANDARD
DEVIATION
YEAR (y-Y)² y-Y)²/N Square root (S.D)
2004 1102.589 91.88242 9.5855
2) BETA
β = N *ΣXY-(ΣX)(ΣY)
NΣX²-(ΣX)²
BETA
YEAR N* Σ XY (ΣX) ( ΣY) NΣx² (ΣX)² β
2004 5286.72 21.69324 7.231404 5286.692 470.5966 0.9878
2005 6118.165 35.14223 35.67909 6656.522 1234.977 0.8972
3) ALPHA
α =Y-β(X)
ALPHA
YEAR Y β X α =Y-β(X)
2004 1.205234 0.9878 1.972113 -0.742819
4)SHARPE RATIO
SR=Rp-Rf/SD
Where;
Rp= (Closing Nav/opening Nav-1)
SHARPE
RATIO
YEAR Rp Rf SD SR
2004 5 9.5855
1.316166 -0.38431
5)TREYNOR RATIO
TR=Rp-Rf/β
TREY
NOR RATIO
YEAR Rp Rf β TR
2004 5 0.9878 -3.72933
1.316166
INTERPRETATION
In the year 2004 standard deviation was high at the rate of 9.5855 and in the year 2006
standard deviation was low at the rate of 6.7258. in the year 2007 β is 1.0644 which is
high risk because β greater than 1 in the year 2008 β value is 0.5357it is less risky
because it is less than 1 . In the year 2005 sharpe index was higher at the rate of 4.182091
and in the year 2008 sharpe index was less at the rate of -6.51645. in the year 2005
treynor index was higher at the rate of 35.9905 and in the year 2008 treynor index was
less at the rate of -109.732 .
Benchmark -100
4000 90
3500 80
70
3000
60
2500
50 index
2000
40 Navs
1500
30
1000
20
500 10
0 0
1 2 3 4 5 6 7 8 9 10 11 12 13
Analysis:
The above graph shows the movement of NAV of reliance vision fund and
Benchmark index for the period from Jan 2004 to Dec 2004. From the above graph we
can see there is some correlation between the movement of both
6000 140
5000 120
100
4000
80
index
3000
60 Navs
2000
40
1000 20
0 0
1 2 3 4 5 6 7 8 9 10 11 12
Analysis:
The above graph shows the movement of NAV of reliance vision fund and
Benchmark index for the period from Jan 2004 to Dec 2004. From the above graph we
can see there is some correlation between the movement of both
8000 200
180
7000
160
6000
140
5000
120
index
4000 100
Navs
3000 80
60
2000
40
1000 20
0 0
1 2 3 4 5 6 7 8 9 10 11 12 13
Analysis:
The above graph shows the movement of NAV of reliance vision fund and
Benchmark index for the period from Jan 2004 to Dec 2004. From the above graph we
can see there is some correlation between the movement of both
12000 350
10000 300
250
8000
200 index
6000
150 Navs
4000
100
2000 50
0 0
1 2 3 4 5 6 7 8 9 10 11 12
Analysis:
The above graph shows the movement of NAV of reliance vision fund and
Benchmark index for the period from Jan 2004 to Dec 2004. From the above graph we
can see there is some correlation between the movement of both
10000 300
9000
250
8000
7000
200
6000
index
5000 150
Navs
4000
100
3000
2000
50
1000
0 0
1 2 3 4 5 6 7 8 9 10 11 12 13
Analysis:
The above graph shows the movement of NAV of reliance vision fund and
Benchmark index for the period from Jan 2004 to Dec 2004. From the above graph we
can see there is some correlation between the movement of both
1) STANDARD DEVIATION
S.D= √ (y-Y)
N
2) BETA
β = N *ΣXY-(ΣX)(ΣY)
NΣX²-(ΣX)²
BETA
YEAR N* Σ XY (ΣX) ( ΣY) NΣx² (ΣX)² β
2005 6005.88 35.14223 45.42131 6656.52 1234.97 0.8133
3) ALPHA
α =Y-β(X)
ALPHA
YEAR Y β X α =Y-β(X)
4)SHARPE RATIO
SR=Rp-Rf/SD
Where;
S
HARPE
RATIO
YEAR Rp Rf SD SR
2004 28.87423 5 6.8527 3.483916
5)TREYNOR RATIO
TR=Rp-Rf/β
TREY
NOR RATIO
YEAR Rp Rf β TR
2004 28.87423 5 1.048 22.78075
INTERPRETATION
In the year 2004 standard deviation was high at the rate of 9.6610 and in the year 2006
standard deviation was low at the rate of 5.5407. in the year 2006 β is 1.0279 which is
high risk because β greater than 1 in the year 2005 β value is 0.8133 it is less risky
because it is less than 1 . In the year 2005 sharpe index was higher at the rate of 8.377194
and in the year 2008 sharpe index was lesser at the rate of – 5.31774 and . in the year
2005 treynor index was higher at the rate of 57.0706 and treynor index was lesser at the
rate of -60.4408.
8000 20
7000 18
16
6000
14
5000
12
index
4000 10
Navs
3000 8
6
2000
4
1000 2
0 0
1 2 3 4 5 6 7 8 9 10 11 12
Analysis:
The above graph shows the movement of NAV of reliance equity fund and
Benchmark index for the period from Jan 2004 to Dec 2004. From the above graph we
can see there is some correlation between the movement of both
7000 18
16
6000
14
5000
12
4000 10 index
8 Navs
3000
6
2000
4
1000
2
0 0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
08 08 08 08 08 08 08 08 08 08 08 08
Analysis:
The above graph shows the movement of NAV of reliance equity fund and
Benchmark index for the period from Jan 2004 to Dec 2004. From the above graph we
can see there is some correlation between the movement of both
1)STANDARD DEVIATION:
S.D= √ (y-Y)
N
2)BETA
β = N *ΣXY-(ΣX)(ΣY)
NΣX²-(ΣX)²
BETA
YEAR N* Σ XY (ΣX) ( ΣY) NΣx² (ΣX)² β
2007 6714.48 45.28385 43.48137 8280.6 2050.62 0.7617
3) ALPHA
α =Y-β(X)
YEAR Y β X α =Y-β(X)
2007 3.952852 0.7617 4.116714 0.81715
4)SHARPE RATIO
SR=Rp-Rf/SD
Where;
SHARPE
RATIO
YEAR Rp Rf SD SR
2007 50.97706 7 5.0710 8.672265
5)TREYNOR RATIO
TR=Rp-Rf/β
TREY
NOR RATIO
YEAR Rp Rf β TR
2007 50.97706 7 0.7617 57.7354
INTERPRETATION
Dec 04 20.7444
Jan 05 12.2833 -40.7874 -43.6211 1902.8
Feb 05 12.3696 0.70258 -2.13112 4.541686
Mar 05 12.4257 0.453531 -2.38017 5.665219
Apr 05 21.1542 70.24554 67.41184 4544.356
May 05 21.327 0.816859 -2.01684 4.06766
Jun 05 21.4811 0.722558 -2.11114 4.456933
Jul 05 21.576 0.441784 -2.39192 5.721279
Aug 05 21.6339 0.268354 -2.56535 6.581018
Sep 05 21.7031 0.319868 -2.51383 6.319366
Oct 05 21.7566 0.246509 -2.58719 6.693576
Nov 05 21.838 0.374139 -2.45956 6.049454
Dec 05 21.8817 0.20011 -2.63359 6.935814
TATOL 34.00444 6504.188
Y=Σy/12 2.833703
Dec 05 21.8817
Jan 06 21.9243 0.194683 -0.28891 0.083467
Feb 06 21.9714 0.21483 -0.26876 0.072232
Mar 06 22.0254 0.245774 -0.23782 0.056556
Apr 06 22.1279 0.465372 -0.01822 0.000332
May 06 22.2222 0.426159 -0.05743 0.003298
Jun 06 22.2053 -0.07605 -0.55964 0.313197
Jul 06 22.321 0.521047 0.037457 0.001403
Aug 06 22.5169 0.877649 0.394059 0.155283
Sep 06 22.7517 1.042772 0.559183 0.312685
Oct 06 22.9167 0.725221 0.241631 0.058385
Nov 06 23.1332 0.944726 0.461136 0.212647
Dec 06 23.1843 0.220895 -0.2627 0.069009
TOTAL 5.803077 1.338493
Y=Σy/12 0.48359
Dec 06 23.1843
Jan 07 23.2206 0.156571 -0.58936 0.34735
Feb 07 23.1169 -0.44659 -1.19252 1.422109
Dec 07 25.3343
Jan 08 25.9301 2.351752 0.592287 0.350804
Feb 08 25.8515 -0.30312 -2.06259 4.254267
Mar 08 25.5116 -1.31482 -3.07428 9.451211
Apr 08 25.5555 0.172079 -1.58739 2.519795
May 08 25.596 0.158479 -1.60099 2.563157
Jun 08 23.5116 -8.14346 -9.90292 98.06792
Jul 08 25.3348 7.75447 5.995005 35.94009
Aug 08 25.6685 1.317161 -0.4423 0.195633
Sep 08 25.7618 0.363481 -1.39598 1.948772
Oct 08 26.1378 1.459525 -0.29994 0.089964
Nov 08 26.9895 3.258499 1.499034 2.247104
Dec 08 30.7787 14.03953 12.28007 150.8001
TOTAL 21.11358 308.4288
Y=Σy/12 1.759465
STANDARD DEVIATION
S.D= √ (y-Y)
N
STANDA
RD DEVIATION
YEAR (y-Y)2 y-Y)2/N Square root (S.D)
2004 7.178206 0.59818 0.77342
INTERPRETATION
In the year 2005 standard deviation was high at the rate of 23.2812 and in the year 2006
standard deviation was low at the rate of 0.3339
RETURN OF PORTFOLIO
DATE NAV Rp(y) (y-Y) (y-Y)2
Jan 04 11.1677
Feb 04 11.202 0.307136 -0.02615 0.000684
Jun 04 11.3348 0.303526 -0.02976 0.000886
Jul 04 11.3711 0.320253 -0.01303 0.00017
Aug 04 11.4086 0.329783 -0.0035 1.23E-05
Sep 04 11.4462 0.329576 -0.00371 1.38E-05
Oct 04 11.4878 0.363439 0.030155 0.000909
Nov 04 11.537 0.42828 0.094996 0.009024
Dec 04 11.584 0.407385 0.074101 0.005491
TOTAL 3.666125 0.022968
Y=Σy/12 0.333284
Dec 04 11.584
Jan 05 11.6257 0.359979 -0.01823 0.000332
Feb 05 11.6643 0.332023 -0.04618 0.002133
Mar 05 11.7086 0.379791 0.001584 2.51E-06
Dec 05 12.1208
Jan 06 12.1862 0.539568 10.12145 102.4438
Feb 06 12.243 0.466101 10.04798 100.962
Mar 06 12.3054 0.509679 10.09156 101.8396
Apr 06 12.3561 0.412014 9.993898 99.87799
May 06 12.4067 0.409514 9.991398 99.82803
Jun 06 12.459 0.421546 10.00343 100.0686
Jul 06 12.5136 0.438237 10.02012 100.4028
Aug 06 12.5759 0.497858 10.07974 101.6012
Sep 06 12.6371 0.486645 10.06853 101.3753
Oct 06 0 -100
Nov 06 0 #DIV/0!
Dec 06 -- #VALUE!
TOTAL -95.8188 908.3993
Y=Σy/12 -9.58188
Dec 06 0
Jan 07 12.9355 #DIV/0!
Feb 07 13.0013 0.508678 0.045501 0.00207
Mar 07 13.0952 0.722235 0.259059 0.067112
Dec 07 13.6097
Jan 08 13.6668 0.419554 -0.13968 0.01951
Feb 08 13.7314 0.472678 -0.08656 0.007492
Mar 08 13.8034 0.524346 -0.03489 0.001217
Apr 08 13.8604 0.412942 -0.14629 0.021401
May 08 13.9262 0.474734 -0.0845 0.00714
Jun 08 14.0024 0.54717 -0.01206 0.000146
Jul 08 14.0846 0.587042 0.027809 0.000773
Aug 08 14.176 0.648936 0.089702 0.008047
Sep 08 14.2857 0.773843 0.21461 0.046057
Oct 08 14.4055 0.838601 0.279367 0.078046
Nov 08 14.4827 0.535906 -0.02333 0.000544
Dec 08 14.5515 0.47505 -0.08418 0.007087
TOTAL 6.710801 0.197461
Y=Σy/12 0.559233
STANDARD DEVIATION
S.D= √ (y-Y)
N
STANDA
RAD
DEVIATION
YEAR (y-Y)2 y-Y)2/N Square root (S.D)
INTERPRETATION
In the year 2006 standard deviation was high at the rate of 8.7005 and in the year 2008
standard deviation was low at the rate of 0.212
RETURN OF PORTFOLIO
DATE NAV Rp(y) (y-Y) (y-Y)2
Jan 04
Feb 04 -- #VALUE! #VALUE!
Mar 04 10.9298 #VALUE!
Apr 04 -- #VALUE!
May 04 -- #VALUE!
Jun 04 -- #VALUE!
Jul 04 10.6578 #VALUE!
Aug 04 10.81 1.428062 0.365919 0.133897
Sep 04 10.9379 1.183164 0.12102 0.014646
Oct 04 10.9925 0.499182 -0.56296 0.316926
Nov 04 11.0035 0.100068 -0.96208 0.925588
Dec 04 11.2346 2.100241 1.038098 1.077646
TOTAL 5.310717 2.468703
Y=Σy/12 1.062143
Dec 04 11.2346
Jan 05 11.2682 0.299076 -0.26145 0.068357
Feb 05 11.3737 0.936263 0.375735 0.141177
Mar 05 11.4206 0.412355 -0.14817 0.021955
Apr 05 11.4524 0.278444 -0.28208 0.079571
May 05 11.5772 1.089728 0.5292 0.280052
Dec 05 12.0133
Jan 06 11.9936 -0.16398 -0.66541 0.442777
Feb 06 11.9964 0.023346 -0.47808 0.228564
Mar 06 12.0146 0.151712 -0.34972 0.122302
Apr 06 12.0851 0.586786 0.085356 0.007286
May 06 12.096 0.090194 -0.41124 0.169115
Jun 06 11.9516 -1.19378 -1.69521 2.873747
Jul 06 12.0094 0.483617 -0.01781 0.000317
Aug 06 12.2235 1.78277 1.28134 1.641833
Sep 06 12.4444 1.807175 1.305745 1.70497
Oct 06 12.5512 0.858217 0.356788 0.127297
Nov 06 12.7511 1.592676 1.091247 1.190819
Dec 06 12.7509 -0.00157 -0.503 0.253007
TOTAL 6.017157 8.762035
Y=Σy/12 0.50143
Dec 06 12.7509
Jan 07 12.7163 -0.27135 -0.90589 0.820642
Feb 07 12.7042 -0.09515 -0.72969 0.532452
Mar 07 12.7487 0.350278 -0.28426 0.080805
Apr 07 12.7655 0.131778 -0.50276 0.252769
Dec 07 13.7513
Jan 08 14.2153 3.374226 3.341792 11.16758
Feb 08 14.1822 -0.23285 -0.26528 0.070374
Mar 08 13.8361 -2.44038 -2.47282 6.114824
Apr 08 13.9587 0.886088 0.853654 0.728725
May 08 13.9688 0.072356 0.039922 0.001594
Jun 08 13.8601 -0.77816 -0.8106 0.657067
Jul 08 13.7919 -0.49206 -0.52449 0.275094
Aug 08
Sep 08
Oct 08
Nov 08
Dec 08
TOTAL 0.389217 19.01525
Y=Σy/12 0.032434
STANDARD DEVIATION:
S.D= √ (y-Y)
N
STA
NDARAD
DEVIATION
YEAR (y-Y)2 y-Y)2/N Square root (S.D)
INTERPRETATION
In the year 2008 standard deviation was high at the rate of 1.2588and in the year 2005
standard deviation was low at the rate of 0.3169
1)Standard Deviation:
• When we see Reliance growth fund it has high standard deviation in the year
2004 as compared to other 4 years i.e 2005,2006,2007 &2008
• When we see Reliance vision it has high standard deviation in the year 2008 as
compared to other four years .
• In case of Reliance Income Fund has high standard deviation in 2006
• When we see Reliance equity fund it has high standard deviation in the year 2008
as compared to another one year i.e 2007
• When we see Reliance liquid fund has high standard deviation in 2006 compared
other years
• When we see Reliance gilt securities fund has high standard deviation in 2008
compared to last year
• Here standard deviation is referred to volatility of Nav of the scheme hence the
one with high standard deviation means it has high volatility hence the standard
deviation is directly related to the returns hence higher the standard deviation
higher the returns
2Beta:
• βBeta is referred to how much the portfolio is dependent on the market return so
higher the β higher the dependent hence high risk i.e systematic risk
• When we see Reliance growth fund in 2007 it has high β i.e if 10% decrease in Rm
result in 10%cRp which very dangerous to invest ors but at the when observe in
2008 i.e o.5357 which mean 10%decrease in Rm results in 5.3 Rp which is healty
sigh i.e the 2005 the scheme has lowest systematic risk .
• In 2004 1.048 which has higher β value which means the schemes has involved
highest risk
• But it is scheme is all the 5 years the βvalue is less than or which
means decrease in Rm is greater tham decrease in Rp
So it has less systematic risk compared to reliance growth fnd
• When we observe Reliance equity fund the β valu 0.7677 which is highest in the
2007.
• Where as in the other one year 2008 is 0.7183
3 Alpha
By observing the all the 3 schemes we can see that all schemes over the all
3 year s have negative are on . The reason behind alpha in the 3 in due to
change in investment pattern of the as in 2006
4) Sharpe ratio :
Since sharpe ratio is one of the most popular method of knowing the risk
associated with the particulars scheme the higher the ratio better is the performance
• In case of Reliance growth fund the sharpe ratio is high in the year 2005 i.e
4.182091 compared to other four year 2004 i.e -0.38431,2006 i.e 0.553716 2007
i.e 3.532276 & 2008 i.e -6.51645. so we can say that scheme has performed very
well in the year 2005 or compared to other four yea
• In case of Reliance vision fund the sharpe ration is high in the year 2005
8.377194 compared to other 4 years 2004i.e 3.483916 ,2006 i.e 4.777922 i.e
2007 i.e 8.315271 & 2008 i.e -5.31774 . so we can say that the scheme has
performed very well in the year 2005 as compared to other four year
• In case of Reliance equity fund the sharpe ratio is high in the year 2007 i.e
8.672265 compared to other one year 2008 i.e -61.4587 this very good sigh as
compared to all other scheme ,this scheme has recorded higher sharpe ratio with
the value of 8.672265 in 2007.
5) Treynor’s Ratio:
Now coming to another ratio which is derived as treynor’s ratio which is different from
sharp ratio since this ratio observe & consider only systematic risk. which is
uncontrollable but where as sharp ratio considers both controllable & uncontrollable risk
i.e systematic as well as unsystematic.
• In case of Reliance vision fund the treynor’s ratio is high in the year 2005 i.e
4.5912 compared to other four years 2004 i.e -0.2458 , 2006 i.e 3.7252,2007 i.e 4.4819
and 2008 i.e -6.4567.so we can say the scheme performed very well in year 2005
compared to other four years but in 2004 it has lower performance.
• In case of Reliance growth fund the ratio is high in the year 2005 i.e 3.25708
compared to other four years 2004.e 1.16950,2006 i.e 1.79626, 2007 i.e3.12612
and 2008 i.e – 12.9086.so we say the scheme performed very well in year 2005
compared to other four years but in 2008 it has lower performance.
• In case of Reliance equity fund the ratio is high in the year 2007 i.e 5.09761
compared to last year 2008 i.e -6.37737. so we can say the scheme performed
very well in year 2007 compared to last year.
. SUGGESTIONS
1) The Mutual Fund companies should utilize this opportunity of soft interest regime
followed by the banks and attract the fixed deposit and the savings Bank Account
Investors.
2) The Mutual Fund Asset Management companies should Educate and give
Awareness about the concept of Mutual Funds to the investors. As majority of the
investors do not know what a Mutual Fund is. And it should highlight the benefits
of mutual fund over other investment and attract more number of custo
4) Always the fund should state the objective of each fund floated by the Asset
Management Company to the investors so that the right investors choose the right
fund.