Project Report On Different Schemes of Mutual Fund

Track Record of the Different Schemes of Mutual funds and their comparative
analysis

EXECUTIVE SUMMR!"
Primary investment objective of an individual or organization is to maximize the returns
and minimizing Market risk through effective diversification.
Mutual funds have become latest buzz word for the average person to invest their
money. It is said that the bank investment is the first priority of people to invest their
savings and next and safer investment place is in mutual funds. A Mutual fund pools
resources from thousands of investors and then diversifies its investment into many
different holdings such as in stocks bonds!debt instruments "overnment securities etc.
in order to provide more safer and relatively high returns as compared with #ixed
deposits etc.
$he Project is basically %#I&A&'( P)*+('$, which tries to explain in layman-s
language about the history growth and pros . cons of investing in mutual funds.

In the second part of this project it will cover the detailed track record of the three
Mutual fund schemes such as / #ranklin 0lue chip #und
I'I'I Prudential Power and
12#' capital builder fund.
And also comparative analysis of these funds with their respective benchmark indices.
$he main reason for selecting these three schemes is / All three schemes incepted in the
year 3445 and since then they are in market it will give me an opportunity to take in
depth 36 year track records with market performance and also to know how these funds
performed during market crash!ups and downs of the market movement.
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analysis

Topic of the study"
&Track Record of the Different Schemes of Mutual funds and their comparative
analysis'
Main ($)ective of the *ro)ect"
&Understandin+ the Concept of Mutual funds, and comparative analysis of three
Mutual fund schemes'
Su$ ($)ectives"
3. 7tudy the Mutual fund industry in India
8. Analyzing the performance of three funds since 3445.
9. $o study the performance of schemes compared to their respective benchmark.
5. $o study the risk involved in these 9 schemes compared to their 0enchmark.
Research Desi+n"
2escriptive research is study of existing facts to a conclusion. In this research I will
make an attempt to analyze the performance of the funds and also how much risk
associated with them.
analysis

Methodolo+y"
*rimary data" 2iscussion with company "uide and with other officials
Secondary Data/
3. Materials Provided by *rganization like
:3; )esearch reports :8; Monthly fact sheets
8. 0usiness Magazines like
:3; Mutual funds insight
:8; Money $oday etc.
9. Internet./ www.bseindia.com
www.nseindia.com
www.valueresearch.com etc.
analysis

0enefits of the study/
3. $his study will help us to know the workings and concept of Mutual funds.
8. this research helps to find how much return can earned by investing in Mutual
funds as compared with #2
9. It will also help to convince the others regarding how Mutual #unds re better risk
adjusted as compared with direct investment through shares.
5. and finally it will give Picture about how these three funds :#ranklin
0luechipI'I'I Prudential power12#' capital builder fund; performing over
last 36 years.
-imitations/ Main <imitation is that in this project we are only considering three
schemes of mutual funds and another limitation is data availability!collection is very
tedious
analysis

.I/DI/0S (. T1E *R(2ECT RE"
Among these three funds more popular among investors is #ranklin blue chip
fund.
0oth #ranklin blue chip fund and I'I'I pru power fund faced problems during
8=== and 8==3 main reasons are/
3.>etan Parek-s case and
8.7eptember 33
th
attack on ?7 @$*
12#' capital 0uilder fund faced crucial period during 8==A main reason was its
portfolio then mainly consisting of #M'" companies and in that year they
drastically came down.
Among these three funds highest 0eta is of #ranklin i.e =.4Alowest is of 12#'
capital builder fund and sharp ratio high in case of #ranklin and low in case of
12#''0 fund .
I'I'I Pru Power-s performance is more or less is stable even if we see its
0($AAlpha7harp ratio and average returns also good i.e 8.BA.
Average )eturn is high in case of 12#' '0 #und i.e 9.=5
#ranklin blueCchip fund once upon a time it was considered to be as star in mutual
funds but due to high market volatility in the year 8==A and 8==D but now from
8==B +anuary on words it could salvage some of its lost pride because of
comparatively low volatility in 0lue chip stocks
analysis

SU00ESTI(/3REC(MME/DT(/ T( I/VEST(RS"
0y the study and analysis of the mutual fund industry it will be better to suggest that even
though mutual funds are subject to risk but they are better risk adjusted as compared with
stocks from last five years it has become a buzz word for investment main reason it is
useful in case of getting tax reductions etc.
If a person wants to earn more as compared to 0ank #2 where possible returns are just
3=C38E where as in mutual fund minimum is around 36C8=E mutual funds are good
option compared with stock market .
If person does not want to take much risk then he can invest in the funds like 12#'
'apital builder fund because as we have already seen in returns chart compared with
other two fundsF#ranklin blueCchip and I'I'I powerG.that it has given constant returns in
shorter period of time with less 0($A and arithmetic mean return is also high
If a person is more interested and ready to take risk then the #ranklin 0lueCchip fund will
the good option. 0y looking at its 0($A and 72 )isk both are high but if person invest in
this fund for more than 5 years he will get returns around 96E.
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analysis

Mutual funds
The concept"
In earlier times HdirectH was the only investment vehicle available. If we wanted to buy
fixed deposit!bond we had to apply on our own. 7imilarly when we wanted to buy
shares we had to call up stock brokers who would procure shares on our behalf and
same was the case with property. $he cost involved in HdirectH buying is least amongst all
investment vehicles. 1owever we need to have skills and time to use this form of
investing.
Another investment vehicle is a mutual fund. Mutual fund works on the concept of
pooling in money. Assume there are 6 to A friends who want to invest money in a
particular asset class say eIuity. Also assume they do not have skills and time. 1owever
one of them knows an expert who regularly invests in stock markets. All these friends go
to an expert and give him their investment amount. $he expert invests on their behalf. If
there is profit in investment they all benefit and if there is any loss they suffer. (xperts
get certain fee for investing on their behalf. $his is the concept of a mutual fund.
Investing in mutual fund is slightly expensive than JdirectJ form of investing. 1owever
the decisionCmaking and procedure of investing is transferred to the Mutual #und
'ompany. Insurance as an investment vehicle works somewhat similar to mutual fund
while traditional insurance plans invest only in debtCbased products and are not market
linked.
vehicle for investin+ in stocks and $onds
A mutual fund is not an alternative investment option to stocks and bonds rather it pools
the money of several investors and invests this in stocks bonds money market
instruments and other types of securities.0uying a mutual fund is like buying a small
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analysis

slice of a big pizza. $he owner of a mutual fund unit gets a proportional share of the
fund-s gains losses income and expenses.
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analysis

Each mutual fund has a specific stated o$)ective
$he fund-s objective is laid out in the fundHs prospectus which is the legal document that
contains information about the fund its history its officers and its performance
.und ($)ective 4hat the fund 5ill invest in
(Iuity F"rowthG *nly in stocks
2ebt FIncomeG *nly in fixedCincome securities
Money Market Fincluding
"iltG
In shortCterm money market instruments Fincluding
government securitiesG
0alanced Partly in stocks and partly in fixedCincome securities
in order to maintain a HbalanceH in returns and risk
Mana+ed $y an sset Mana+ement Company 6MC7
$he company that puts together a mutual fund is called an AM'. An AM' may have
several mutual fund schemes with similar or varied investment objectives.
$he AM' hires a professional money manager who buys and sells securities in line with
the fundHs stated objective.
ll MCs Re+ulated $y SE#I, .unds +overned $y #oard of Directors
$he 7ecurities and (xchange 0oard of India F7(0IG mutual fund regulations reIuire that
the fund-s objectives are clearly spelt out in the prospectus.
In addition every mutual fund has a board of directors that is supposed to represent the
shareholdersH interests rather than the AM'-s.
analysis

.or small and medium investor 8 5ho does not have skills and time 8 mutual fund
seems the $est option%
'urrently in India we have mutual funds which invest mainly in two asset classes debt
and eIuity. And now many mutual fund companies also investing in real estate
infrastructure projects natural energy resources etc.
Mutual funds concept can $e 5ell understood 5ith the follo5in+ dia+ram"
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analysis

0enefits through investing in Mutual funds/
*rofessional Money Mana+ement/ #und managers are responsible for implementing a
consistent investment strategy that reflects the goals of the fund. #und managers monitor
market and economic trends and analyze securities in order to make informed
investment decisions.
Diversification/ 2iversification is one of the best ways to reduce risk Mutual funds
offer investors an opportunity to diversify across assets depending on their investment
needs
-i9uidity/ Investors can sell their mutual fund units on any business day and receive the
current market value on their investments within a short time period Fnormally threeC to
fiveCdays
fforda$ility/ $he minimum initial investment for a mutual fund is fairly low for most
funds Fas low as )s6== for some schemesG.
Convenience/ Most private sector funds provide you the convenience of periodic
purchase plans automatic withdrawal plans and the automatic reinvestment of interest
and dividends. Mutual funds also provide you with detailed reports and statements that
make recordCkeeping simple. Lou can easily monitor the performance of your mutual
funds simply by reviewing the business pages of most newspapers or by using our Mutual
Funds section in Investor-s Mall.
.le:i$ility and variety/ Lou can pick from conservative blueCchip stock funds sectoral
funds funds that aim to provide income with modest growth or those that take big risks
33
analysis

in the search for returns. Lou can even buy balanced funds or those that combine stocks
and bonds in the same fund.
38
analysis

Ta: $enefits on Investment in Mutual .unds/
3G 3==E Income $ax exemption on all Mutual #und dividends
8G 'apital "ains $ax to be lower of C
3=E on the capital gains without factoring indexation benefit and
8=E on the capital gains after factoring indexation benefit.
9G *penCend funds with eIuity exposure of more than 6=E are exempt from the
payment of dividend tax for a period of 9 years from 3444C8===.
Disadvanta+es of Mutual .unds"
/o Control (ver the costs
/o tailor made portfolios
39
analysis

I/DUSTR! (VERVIE4
little history /
Mutual funds made an opening in India in 34A9 under the enactment f ?nit $rust of India
F?$IG which came out with is debut scheme named ?7CA5 an open ended scheme n
which is operating till date. ?p to 34BACBD it had launched 8= schemes mobilizing net
resources amounting to )s. 56A5 crores.for these 89 long years up to 34BD ?$I enjoyed
complete monopoly of the unit trust business in India. It remained one and the only
mutual fund in India. as the next logical step public sector banks and financial
institutions were allowed to float mutual funds and their success emboldened the
government to allow the private sector to foray into this area.
$he initial years of the industry also saw the emerging years of the Indian eIuity market
when a number of mistakes were made and hence the mutual fund schemes which
invested in lesserCknown stocks and at very high levels became loss leaders for retail
investors. #rom those days to today the retail investor for whom the mutual fund is
actually intended has not yet returned to the industry in a big way. 0ut to be fair the
industry too has focused on brining in the large investor so that it can create a significant
base corpus which can make the retail investor feel more secure.
Ups ; Do5ns of Mutual fund Industry In India
$en years ago closeCend funds were the order of the day. Most debt funds offered assured
returns. And even eIuity funds managed to convey the impression of fixed returns by
sporting calling themselves J$riple PlusJ and J2ouble 7Iuare PlusJ. (Iuity funds were
largely judged by their dividends rights and bonus offers rather than by the returns.
$he mutual fund industry has lived through its share of crises of confidence over the past
ten years. And there are still grey areas. 0ut the regulatory framework disclosure norms
35
analysis

and service standards have all changed beyond recognition making mutual funds one of
the most investorCfriendly avenues available today.
*rivate sector plays/
@hen the first crop of private sectorCsponsored mutual funds Fsuch as >othari Pioneer
8=th 'entury #inance and Apple #inanceG debuted in 3449C45 they had a difficult time
weaning investors away from the ?nit $rust of India and the public sector bankC
sponsored funds.
$he bull market of 3445 and the subseIuent IP* boom changed all this. @ith retail
investors tasting the power of the eIuity a spate of private eIuity funds made their debut
in 3445C46.
#unds such as the Apple Midas the "oldshare and Morgan 7tanley "rowth #und drew
retail investors in large numbers. ?nfortunately as the IP* bubble burst and the eIuity
market went into a slide so did the &AK of the eIuity funds launched in the bull market.
0ut the important development during this period was the emergence of openCend funds
which offered onCtap liIuidity to their investors and raised the bar on &AK and portfolio
disclosures.
The second comin+/ After the upsets of 3445C46 it was a slow and painstaking recovery
for the private sector funds. In the five years that followed many more private sector
funds threw their hat into the ring some of them big global names such as Alliance
'apital the $empleton group &ewton and Principal #inancial.
@ith a lull in the eIuity market fund houses spent this period expanding their portfolio
of debt offerings. Alongside the plainCvanilla debt funds came the gilt liIuid cash funds
36
analysis

and treasury management plans to cater to high net worth and corporate investors. $here
was also a slew of balanced and hybrid fund launches.
2uring this period assured return schemes from the ?$I and the bankCsponsored funds
were buffeted by controversy after some reneged on promises. $his was followed by the
crisis in ?7CA5. $hese events helped drive the concept of marketClinked returns firmly
into the minds of investors. And this put private sector fund houses firmly back on the
radar screens of investors.
Restructurin+ pays off/ $he years from 344A to 344B saw eIuity funds restructuring
their portfolios and piling them up with #M'" pharma and infotech stocks. 0y endC
3444 the secular bull run led by the I$ stocks had helped many an eIuity fund build an
impressive record of performance. 0ut this Jsecond comingJ of eIuity funds was also to
end in disappointment. $he newfound fancy for eIuity saw the rollout of a slew of
technology funds at the height of the bull markets in 8===. @hen these crashed some of
the goodwill painstakingly built by the eIuity funds also took a beating.
De$t in fashion/ 0ut by then private sector fund houses had managed to build up a
strong performance track record in their debt products. 1elped by the secular decline in
interest rates and a basket of innovative offerings mutual funds managed to deliver
returns that were substantially higher than what was available from alternative savings
avenues such as fixed deposits.
$his led to a largeCscale migration of assets to debtCoriented mutual funds.
0y 8==9 private sector mutual funds had wrested a lionHs share of the mutual fund assets
from the ?$I and the P7? bankCsponsored funds. 0y endC2ecember 8==9 the mutual
fund industry was managing )s 35==== crore of assets with B= per cent of it in private
sector funds.
3A
analysis

S5ept $y consolidation/ $he years from 3444C8==9 saw a considerable churn in the
industry. @ith competition intensifying the weaker players were taken over. $here was
also a coming together of some of the larger fund houses.
3D
analysis

$he takeover of the >othari Pioneer funds by the #ranklin $empleton group and the
Murich funds by the 12#' group are instances. A few fund houses saw their foreign
partners pull out only to be replaced by new ones. *ver the past couple of years some of
the big global names in financial services N 170' "rindlays and 2eutsche 0ank N
have made an entry into the Indian fund arena. @ith ?7 fund behemoth N #idelity N
now readying to enter the Indian market the industry at long last appears to be reaching
maturity.
Re+ulations stay in tune/ )egulations have kept pace with the rapid changes in the
industry structure over the past decade. 0oth the offer documents and the financial
statements of mutual funds have been simplified over the years. 1alfCyearly portfolio and
financial disclosures have been made compulsory.
7tringent investment norms have been put in place to prevent concentration and reduce
exposure to illiIuid and thinly traded securities. 2isclosure reIuirements have been fineC
tuned to reveal more about the pattern of ownership in a fund and transactions with
related and group companies. 7(0I recently trained its sights on reforming the
distribution and selling side of the mutual fund business.
1ealthy competition/ Intensifying competition has ensured that the fund houses have
kept two jumps ahead of the regulatory reIuirements at least on disclosures and service
standards. 2aily &AK is now a standard feature with funds and transactionCprocessing
times have been compressed to less than 5B hours.
Many funds have moved to a monthly disclosure of portfolios. 2issemination of
information has leapfrogged with the use of websites for routine disclosures. KalueCadded
services such as systematic investment plans switch options cheIueCwriting facilities
and call centre services promise to improve the investing experience for investors.
3B
analysis

Savvy investors/ As the eIuity market pauses after the secular bull run of 8==9 eIuity
funds appear to be back in the investorsH good books. 1ybrid products such as the MIPs
FMonthly Income PlansG and eIuity funds have attracted sizeable inflows in the recent
months. Is this a sign that retail investors are finally beginning to channel their
investments in eIuities through mutual fundsO *r are they yet again falling into the ageC
old trap of jumping onto the bandwagon in the late stages of a stock market rallyO
It is early days yet to say which of these is true. 0ut there are a couple of positive signals
from the pattern of fund flows in the recent months.
#or one inflows have been pretty selective a sign that investors are tracking fund
performance far more closely than before.
7econd outflows from eIuity funds have also been rising which suggests that investors
are selling out when their target returns are met.
$hese are signs that mutual fund investors may be on to the two crucial skills for
successful investing N a sense of timing and investment disciplineP and that too at the
same time.
#asis on 5hich Mutual funds are compared /
'hoosing a mutual fund seems to have become a very complex affair lately. $here are no
dearth of funds in the market and they all clamor for attention.
$he most crucial factor in determining which one is better than the rest is to look at
returns. )eturns are the easiest to measure and compare across funds.
34
analysis

At the most trivial level the return that a fund gives over a given period is just the
percentage difference between the starting &et Asset Kalue Fprice of unit of a fundG and
the ending &et Asset Kalue.
8=
analysis

)eturns by themselves donHt serve much purpose. $he purpose of calculating returns is to
make a comparison. (ither between different funds or time periods. And you must be
careful not to make a mistake here. *r else you could end up investing in the wrong
funds.
$solute returns
Absolute returns measure how much a fund has gained over a certain period. 7o you look
at the &AK on one day and look at it say six months or one year or two years later. $he
percentage difference will tell you the return over this time frame.
0ut when using this parameter to compare one fund with another make sure that you
compare the right fund. $o use the ageCold analogy donHt compare apples with oranges.
7o if you are looking at the returns of a diversified eIuity fund Fone that invests in
different companies of various sectorsG compare it with other diversified eIuity funds.
2onHt compare it with a sector fund which invests only in companies of a particular
sector. 2onHt even compare it with a balanced fund Fone that invests in eIuity and fixed
return instrumentsG.
#enchmark returns
$his will give you a standard by which to make the comparison. It basically indicates
what the fund has earned as against what it should have earned. A fundHs benchmark is an
index that is chosen by a fund company to serve as a standard for its returns. $he market
watchdog the 7ecurities and (xchange 0oard of India has made it mandatory for funds
to declare a benchmark index. In effect the fund is saying that the benchmarkHs returns
are its target and a fund should be deemed to have done well if it manages to beat the
benchmark.
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analysis

<etHs say the fund is a diversified eIuity fund that has benchmarked itself against the
7ensex.
7o the returns of this fund will be compared visCaCviz the 7ensex. &ow if the markets are
doing fabulously well and the 7ensex keeps climbing upwards steadily then anything less
than fabulous returns from the fund would actually be a disappointment.
If the 7ensex rises by 3=E over two months and the fundHs &AK rises by 38E it is said to
have outperformed its benchmark. If the &AK rose by just BE it is said to have
underperformed the benchmark.
0ut if the 7ensex drops by 3=E over a period of two months and during that time the
fundHs &AK drops by only AE then the fund is said to have outperformed the benchmark.
A fundHs returns compared to its benchmark are called its benchmark returns.
At the current high point in the stock market almost every eIuity fund has done
extremely well but many of them have negative benchmark returns indicating that their
performance is just a sideCeffect of the marketsH rise rather than some brilliant work by
the fund manager.
Time period
$he most important thing while measuring or comparing returns is to choose an
appropriate time period.
$he time period over which returns should be compared and evaluated has to be the same
over which that fund type is meant to be invested in.
If you are comparing eIuity funds then you must use three to five year returns. 0ut this is
not the case of every other fund.
88
analysis

#or instance cash funds are known as ultra shortCterm bond funds or liIuid funds that
invest in fixed return instruments of very short maturities. $heir main aim is to preserve
the principal and earn a modest return. 7o the money you invest will eventually be
returned to you with a little something added.
Investors invest in these funds for a very short time frame of around a few months. 7o it
is alright to compare these funds on the basis of their six month returns.
Market conditions
It is also important to see whether a fundHs return history is long enough for it to have
seen all kinds of market conditions.
#or example at this point of time there are eIuity funds that were launched one to two
years ago and have done very well. 1owever such funds have never seen a sustained
declining market Fbear marketG. 7o it is a little misleading to look at their rate of return
since launch and compare that to other funds that have had to face bad markets.
If a fund has proved its mettle in a bear market and has not dipped as much as its
benchmark then the fund manager deserves a pat on the back.
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analysis

T!*ES (. MUTU- .U/DS" Mutual fund schemes can be broadly classified in to
two categories. $hey are
P*)$#*<I* '<A77I#I'A$I*&
*P()A$I*&A< '<A77I#I'A$I*&
MUTU- .U/D SC1EME
Portfolio classification operational classification
)eturn based
Income scheme
"rowth scheme *penCended scheme
'onservative scheme
Investment based
(Iuity scheme
0ond scheme
0alanced structure
7ector based
)eal (state schemes
Industry specific 'losed ended scheme
*ther scheme
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analysis

<everaged 0ased
<everaged schemes
&onCleveraged
*ther schemes
"ilt scheme
Index funds
86
analysis

(perational schemes
AG *penCended schemes
In these schemes size of the fund is not predetermined as
entry to or exit from the funds is open to investor who can buy or sell the securities to
the fund at any time. $his fund has greater liIuidity to the funds along with the
predetermined repurchase price based on the declared &et Asset Kalue. Portfolio mix
of such schemes consists of actively traded securities in the market preferably eIuity
8A
analysis

shares. As investors can anytime withdraw from the fund therefore the management
of such funds is Iuiet tedious.
0G 'losed Qended schemes
$his scheme has deposits redemption date unlike openC
ended schemes. $hese funds have fixed capital base and are traded among the
investors among the secondary market. the forces of demand and supply hence
determine their price. Price is free to deviate from its net asset value. Management of
such fund is comparatively easier because manager can evolve long term investment
plans depending upon the life of the scheme.
@ithin these two broad operational classification there are following
classification being made.
RETUR/ 8#SED C-SSI.ICTI(/
Income funds/ $hese are for the investors who are more concerned about regular
returns from their investment.
"rowth funds/ $he main objective of this fund is to achieve an increase in value of
investment through capital appreciation and not the regular income.
8D
analysis

Conservative funds/ $hese funds aim at giving reasonable rate of return in addition to
capital appreciation.
Investment 8$ased classification"
(Iuity funds /$hese funds invest in the eIuity shares of companies and undertake greater
risk associated with it. $his gives good rate of return in rising market.
0ond funds/ $hese funds provide greater security to investors by investing in bonds
debenture etc. investment here has no capital appreciation.
0alanced funds/ $hese funds are a combination of both debt and eIuity .trends in market
will determine which proportion of the mix is to be determined.

Sector $ased classification" $hese funds or the schemes that invest in the securities of
only those sectors or industries as specified in the offer documents.eg pharmaceuticals
software fast moving consumer goods F#M'"G petroleum stocks etc. the returns on
these funds or the schemes depends on the performance of that particular
sector!industries. $hese schemes may give the higher returns but are very risky compared
to diversified funds. Investors need to keep an eye on the performance of these of these
sectors and should exit on an appropriate time.
-evera+e $ased classification"In this type of fund or scheme investment is made by
borrowing money from the market and making investment in fund there by making
leverage benefits available to mutual fund investor i.e. giving good returns to the
investors from the income earned by investing borrowed funds.
Inde:<$ased classification /Index funds replicate the portfolio of a particular index such
as the 07( sensitive index 7.P &7( 6= index FniftyG. $hese schemes invest in the
8B
analysis

securities in the same weight age comprising of an index. &AKs of such schemes would
rise or fall in accordance with the rise or fall in the index through not exactly by the
84
analysis

same by the same percentage due to some factors. &ecessary disclosure in this regard is
made in offer document of the mutual fund schemes. $here are also exchange traded
index funds launched by the mutual funds that are traded on the stock exchanges.
0I-T<.U/D"$hese funds invest exclusively in government securities. "overnment
securities have no default risk .&AKs of these schemes also fluctuate due to change in
interest rates and other economic factors as are the case with income or debt Qoriented
schemes.
DI..ERE/T T!*ES (. *-/S T1E MUTU- .U/D (..ERS
Mutual fund offers different types of plans to its investors. they are as follows.
3. ")*@$1 P<A&
?nder growth plan the investor realizes only the capital
appreciation on the investment and does not get any income in the form of dividend.
8. I&'*M( P<A&
?nder income plan the investor realizes income in the form of
dividend. 1owever his &AK will all to the extent of the dividend.
9. 2IKI2(&2 )(CI&K(7$M(&$ P<A&
1ere the dividend accrued on the mutual funds is
automatically reCinvested in the purchasing additionally units in the open ended
funds. In most cases mutual funds offer the investor an option of collecting dividends
or reCinvesting the same.
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analysis

5. 7L7$(MA$I' I&K(7$M(&$ P<A& In this type of plan the investor is given
the option of preparing a predetermined number of post dated cheIues in favour of the
fund. 1e will get the units on the date of cheIue at the existing &AK. #or instances if on
the 6
th
March he has given a post dated cheIue for +une 6
th
8==A he will get units on 6
th
+une 8==A at the existing &AK.
6. 7L7$(MA$I' @I$12)A@A< P<A& As opposed to 7IP the systematic
withdrawal plan allows the investor the facility to withdraw predetermined
amount!units from his fund at a preCdetermined interval. $he investor-s units will
be redeemed at the existing &AK as on that day. $he unit holder may setCup a
systematic @ithdrawal plan on a monthly Iuarterly or semi annually or on a
annual basis to redeem a fixed number of units or redeem enough units to provide
a fixed amount of money.
A. )($I)(M(&$ P(&7I*& P<A& 7ome schemes are linked with retirement
pension. Individuals participate in these plans for themselves and corporate for their
employees.
D. I&7?)A&'( P<A&7/
7ome schemes launched by ?$I and <I' offer insurance cover to investor.
93
analysis

TX SVI/0 SC1EMES
$hese schemes offer tax rebates to the investors under specific provisions of
the income tax act 34A3 as the government offers tax incentives for investment in
specified avenues eg/ (Iuity <inked 7aving 7cheme F(<77G. Pension schemes
launched by the mutual fund also offer tax benefits. $hese schemes are growthC
oriented and invest preCdominantly in eIuities. $heir growth opportunities and risk
associated are like any eIuity oriented scheme.
-(D (R /( -(D .U/D
A load fund is one that charges a percentage of &AK for entry or exit. $hat is
each time one buys or sells the units in the fund a charge will be payable. $his charge
is used by the mutual fund for marketing and distribution expenses. 7uppose the &AK
per unit is )s.3= .if the entry as well as exit load charge is 8E then the investors who
buy would be reIuired to pay )s.3=.8= and those would want to repurchase must pay
)s.4.B= per unit. A noCload fund is the one that does not charge for entry or exit. It
means the investors can enter the fund!scheme at &AK and no additional charges are
payable on the purchase or sale of units.

98
analysis

Terminolo+ies Demystified=
R sset llocation
Q 2iversifying investments in different assets such as stocks bonds real
estate cash in order to optimize risk.
R .und Mana+er
Q $he individual responsible for making portfolio decision for a mutual
fund in line with fund-s objective.
R .und (ffer Document
Q 2ocument with investment objectives risk factors expenses summary
how to invest etc.
R Dividend
Q Profits given to the investor from time to time.
R 0ro5th
Q Profits ploughed back into scheme. $his causes the &AK to rise.
R /V
Q Market value of assets of scheme minus its liabilities.
R *er unit /V S &et Asset Kalue
&o. of ?nits *utstanding on Kaluation date
R Entry -oad3.ront<End -oad 6><?%?@A7
Q $he commission charged at the time of buying the fund.
99
analysis

Q $o cover costs for selling processing
R E:it -oad3#ack< End -oad 6>%?@<?%?@A7
Q $he commission or charge paid when an investor exits from a mutual
fund. Imposed to discourage withdrawals
Q May reduce to zero as holding period increases.
R Sale *rice3 (ffer *rice
Q Price you pay to invest in a scheme. May include a sales load. FIn this
case sale price is higher than &AKG
R Re<*urchase *rice3 #id *rice
Q Price at which closeCended scheme repurchases its units
R Redemption *rice
Q Price at which openCended scheme
95
analysis

96
analysis

SS(CITI(/ (. MUTU- .U/DS I/ I/DIBM.IC
@ith increase in Mutual #und players in India a need for mutual fund association in
India was generated to function as a nonCprofit organization.
Association of mutual funds in India FAM#IG was incorporated on 88
nd
August 3446.

AM#I is an apex body of all Assets Management 'ompanies FAM'G which has been
registered with 7ecurity (xchange 0oard of India F7(0IG .till date all the AM's are that
have mutual fund schemes are its members. It functions under the supervision and
guidelines of its board of 2irectors.
Association of Mutual #unds India has brought down the Indian Mutual #und Industry to
a professional and a healthy market with the 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.
$1( *0+('$IK(7 *# A77*'IA$I*& *# M?$?A< #?&27 I& I&2IA
$he Association of Mutual #unds of India works with 9= registered AM'7 of the
country. It has certain defined objectives which juxtaposes the guidelines of its 0oard of
2irectors. $he objectives are as follows.
$his Mutual #und Association of India maintains high professional and ethical
standards in all areas of operation of the industry.
It also recommends and promotes the top class business practices and code of conduct
which is followed by members and related people engaged in activities of Mutual #und
and Assets Management. $he agencies that are by any means connected or involved in
this code of conduct of the association.
9A
analysis

AM#I interacts with 7(0I and works according to 7(0I-s guidelines in the mutual
fund industry.

Association of Mutual #und of India do represent the government of India the
)eserve bank of India and other related bodies on matters relating to the Mutual
#und Industry.
It develops a team of well Iualified and trained agent distributors. It implements a
programme of training and certification for all intermediaries and other engaged in
the Mutual #und Industry.
.
AM#I undertakes all India awareness programme for investors in order to promote
proper understanding of the concept and working of mutual funds.
At last 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.
9D
analysis

The sponsors of ssociation of Mutual .unds in India%
#ank sponsored
3G 70I Mutual management <td.
8G 0*0 asset management '*. <td.
9G 'anbank Investment Management 7ervices. <td
5G ?$I Asset management 'ompany Pvt <td.
Institution
"I' Asset management 'o.<td
+eevan 0ima sahayog asset management 'ompany.
*RIVTE SECT(R
I/DI/
0enchmark asset management company
'holamandalam Asset Management 'o.<td
'redit 'apital Asset Management 'o.<td
(scorts Asset Management <td
+M #inancial Mutual fund
>otak Mahindra asset management company
)eliance capital Asset management <td
7ahara Asset management 'o.<td
7undaram Asset management 'o.<td
9B
analysis

$ata Asset Management Private <td
94
analysis

Indian )oint ventures
0irla 7un life Asset management company
27P Merill <ynch #und Managers company
12#' Asset management company
*redominantly .orei+n 2oint Ventures"<
A0& AM)* Asset Management FIG <td.
Alliance 'apital Asset Management FIndiaG Pvt. <td.
2eutsche Asset Management FIndiaG Pvt. <td.
#idelity #und Management Private <imited
#ranklin $empleton Asset Mgmt. FIndiaG Pvt. <td.
170' Asset Management FIndiaG Private <td.
I&" Investment Management FIndiaG Pvt. <td.
Morgan 7tanley Investment Management Pvt. <td.
Principal Asset Management 'o. Pvt. <td.
Prudential I'I'I Asset Management 'o. <td.
7tandard 'hartered Asset Mgmt 'o. Pvt. <td.
ssociation of Mutual .unds in India *u$lications" AM#I publishes mainly two types
of bulletin. *ne is on the monthly basis and the other is Iuarterly. $hese publications are
of great support for the investors to get intimation of the know how of their parked
money.
5=
analysis

SE#I RE0U-TI(/S (/ MUTU- .U/DS
$he "overnment brought Mutual #unds in the 7ecurities market under the regulatory
framework of the 7ecurities and (xchange board of India F7(0IG in the year 3449.
53
analysis

7(0I issued guidelines in the year 3443 and comprehensive set of regulations relating to
the organization and management of Mutual #unds in 3449.
SEBI REGULATIONS 1993 (20.1.1993)
$he regulations bar Mutual #unds from options trading short selling and carrying
forward transactions in securities. $he Mutual #unds have been permitted to invest only
in transferable securities in the money and capital markets or any privately placed
debentures or securities debt. )estrictions 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 3= per cent of the corpus. Investments under
all the schemes cannot exceed 36 per cent of the funds in the shares and debentures of a
single company.
7(0I grants registration to only those mutual funds that can prove an efficient and
orderly conduct of business. $he 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. $he regulations also
prescribe the advertisement code for the marketing schemes of Mutual #unds the
contents of the trust deed the investment management agreement and the schemeCwise
balance sheet. Mutual #unds are reIuired to be formed as trusts and managed by
separately formed as trusts and managed by separately formed Asset Management
'ompanies FAM'G. $he minimum net worth of such AM' is stipulated at )s.6 crores of
which the Mutual #und should have a custodian who is not associated in any way with
the AM' and registered with the 7(0I.
$he minimum amount raised in closedCended scheme should be )s.8= 'rores and for the
openCended scheme )s.6= 'rores. In case the amount collected falls short of the
minimum prescribed the entire amount should be refunded not later than six weeks from
58
analysis

the date of 'losure of the scheme. If this is not done the fund is reIuired to pay an
interest at the rate of 36 per cent per annum from the date of expiry of six weeks. In
addition to these the Mutual #unds are obliged to maintain books of accounts and
provision for depreciation and bad debts.
#urther the Mutual #unds are now under the obligation to publish schemeCwise annual
reports furnish six month unCaudited accounts Iuarterly statements of the movements of
the net asset value and Iuarterly portfolio statements to the 7(0I. $here is also a
stipulation that the Mutual #unds should ensure adeIuate disclosures to the investors.
7(0I has agreed to let the Mutual #unds buy back the units of their schemes. 1owever
the funds cannot advertise this facility in their prospectus. 7(0I is also empowered to
appoint an auditor to investigate into the books of accounts or the affairs of the Mutual
#unds.
7(0I can suspend the registration of Mutual #unds in the case of deliberate manipulation
price rigging or deterioration of the financial position of Mutual #unds.
SE#I RE0U-TI(/S, DEEF
7(0I announced the amended Mutual #und )egulations on 2ecember 4 344A covering
)egistration of Mutual #unds 'onstitution and Management of Mutual funds and
*peration of $rustees 'onstitution and Management of Asset Management 'ompanies
FAM'sG and custodian schemes of M#s investment objectives and valuation policies
general obligations inspection and audit. $he revision has been carried out with the
objective of improving investor protection imparting a greater degree of flexibility and
promoting innovation.
$he increase in the number of M#s and the types of schemes offered by them necessitated
uniform norms for valuation of investments and accounting practices in order to enable
59
analysis

the investors to judge their performance on a comparable basis. $he Mutual #und
)egulations is sued in 2ecember 344A provide for a schemeCwise 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.
$he existing Asset Management 'ompanies are reIuired to increase their net worth from
)s.3= crores within one year from the date of notification of the amended guidelines.
AM's are also allowed to do other fundCbased businesses such as providing investment
management services to offshore funds other Mutual #unds Kenture 'apital #unds and
Insurance 'ompanies. $he amended guidelines retained the former fee structure of the
AM's of 3.86E of weekly average &et Asset Kalue F&AKG up to )s.3== crores and 3E
of &AK for net assets in excess of )s.3== crores.
$he 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. $he regulation empowers the investor. $he amended guidelines
reIuire portfolio disclosure standardization of accounting policies valuation norms for
&AK and pricing. $he 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. $he
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.
$he various Mutual #unds are allowed to mention an indicative return for schemes for
fixed income securities. In 344BC44 the Mutual #unds )egulation were amended to
permit Mutual #unds to trade in derivatives for the purpose of hedging and portfolio
balancing. 7(0I registered Mutual #unds and #und managers are permitted to invest in
55
analysis

overseas markets initially within an overall limit of ?7 T6== million and a ceiling for an
individual fund at ?7T 6= million.
7(0I made F*ctober B 3444G investment guidelines for M#s more stringent. $he new
guidelines restrict M#s to invest no more than 3=E of &AK of a scheme in share or share
related instruments of a single company. M#-s in rated debt instruments of a single issuer
is restricted to 36E of &AK of the scheme Fup to 8=E with prior approval of 0oard of
$rustees or AM'G. )estrictions in unC rated debt instruments and in shares of unlisted
companies. $he new norms also specify a maximum limit of 86E of &AK for any
scheme for investment in listed group companies as against an umbrella limit of 86E of
&AK of all schemes taken together earlier. 7(0I increased F+une D 8===G the maximum
investment limit for M#s in listed companies from 6E to 3=E of &AK in respect of openC
ended funds. 'hanges 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 &AK without any exit load. M#s are also not to make assurance or claim that is
likely to mislead investors. $hey are also banned from making claims in advertisement
based on past performance.
56
analysis

C(M*/! *R(.I-E
The Gotak Mahindra 0roup
>otak Mahindra is one of IndiaHs leading financial conglomerates offering complete
financial solutions that encompass every sphere of life. #rom commercial banking to
stock broking to mutual funds to life insurance to investment banking the group caters
to the financial needs of individuals and corporates.
$he group has a net worth of over )s. 6A=4 crore employs around 3D3== people in its
various businesses and has a distribution network of branches franchisees representative
offices and satellite offices across 955 cities and towns in India and offices in &ew Lork
<ondon 2ubai Mauritius and 7ingapore. $he "roup services around 9.A million
customer accounts.
>otak "roup Products . 7ervices/
3. 0ank
8. <ife Insurance
9. Mutual #und
5. 'ar #inance
6. 7ecurities
A. Institutional (Iuities
D. Investment 0anking
B. >otak Mahindra International
4. >otak Private (Iuity
3=. >otak )ealty #und
5A
analysis

G(TG SECURITIES" >otak 7ecurities <td. 3== E subsidiary of >otak Mahindra
0ank is one of the oldest and largest broking firms in the Industry with a market share of
B.6 E Fas on 9=th 7eptemberG.
$heir offerings include stock broking through the branch and Internet Investments in
IP* Mutual funds and Portfolio management service.
Their ccolades include"
0est Performing (Iuity 0roker in India Q '&0' #inancial Advisor Awards 8==B
Avaya 'ustomer )esponsiveness Awards F8==DG in #inancial 7ervices 7ector
0est 0rokerage #irm in India by Asiamoney in 8==D
$he <eading (Iuity 1ouse in India in $homson (xtel 7urveys Awards for the year 8==D
(uromoney Award F8==A and 8==DG C 0est Provider of Portfolio Management/ (Iuities
Avaya 'ustomer )esponsiveness Awards F8==AG in #inancial Institution 7ector
Asiamoney Award F8==AG C 0est 0roker in India
(uromoney Award F8==6G C 0est (Iuities 1ouse in India
#inance Asia Award F8==6G C 0est 0roker in India
#inance Asia Award F8==5G C IndiaHs best (Iuity 1ouse
Prime )anking Award F8==9C=5G C <argest 2istributor of IP*Hs
$hey have been the first in providing many products and services which have now
become industry standards. 7ome of them are/
5D
analysis

#acility of Margin #inance to the customers
Investing in IP*s and Mutual #unds on the phone
7M7 alerts before execution of depository transactions
Mobile application to track portfolios
Auto Invest C A systematic investing plan in (Iuities and Mutual funds
Provision of margin against securities automatically against shares in your 2emat account
$hey have a fullCfledged research division involved in Macro (conomic studies 7ectoral
research and 'ompany 7pecific (Iuity )esearch combined with a strong and well
networked sales force which helps deliver current and up to date market information and
news.
$hey are also a depository participant with &ational 7ecurities 2epository <imited
F&72<G and 'entral 2epository 7ervices <imited F'27<G providing dual benefit
services wherein the investors can avail our brokerage services for executing the
transactions and the depository services for settling them. $hey use to process more than
A===== trades a day which is much higher even than some of the renowned international
brokers.
$heir network spans over 93= cities with BAD outlets.
>otak 7ecurities <imited has over )s. 5=== crore of Assets ?nder Management FA?MG
as of 93st 2ecember 8==D. $he portfolio Management 7ervice provides top class service
catering to the high end of the market. Portfolio Management from >otak 7ecurities
comes as an answer to those who would like to grow exponentially on the crest of the
stock market with the backing of an expert.
5B
analysis

54
analysis

*)"A&IMA$I*& 7$)?'$?)( *# >*$A> 7('?)I$I(7
6=
Chairman ; MD
Vice<*resident
Re+ional 1eads
7outh (ast west
7tate heads 7tate heads 7tate heads 7tate heads
Area
managers
Area
managers
Area
managers
Area
managers
0) Mgr 0) Mgr 0) Mgr 0) Mgr
)M )M )M )M
&orth
analysis

/-!SIS *RT (. T1E *R(2ECT
Analysis part of the project starts from the detailed information about the funds selected
that is as follows/
63
#und Manager/
'handresh &igam
#und Manager/
Mr Anand 7hah
#und Manager" >. &. 7iva
7ubramanian
Min Investment/)s 6=== Min Investment/)s 6=== Minimum Investment
F)s/6===
Inception/ 2ec 93 3449 Inception/ Aug 85 3445 Inception" &ov 9= 3449
0ench mark/ 7.P
'&U6==
0enchmark/7.P '&U &ifty 0ench mark/07( sensex
$ype/ *pen (nded
diversified eIuity
7cheme
$ype/ *pen (nded
diversified eIuity 7cheme
$ype/ *pen (nded diversified
eIuity 7cheme
*bjective/ $he fund
plans to achieve capital
appreciation in fixed
period of time by
investing predominantly
in eIuity oriented
securities
*bjective/ $o generate
capital appreciation through
investments in eIuity
related securities in core
sectors and associated
feeder industries.
Objective: " Aims to achieve
a high degree of capital
appreciation through
investments in wellC
established large size blue
chip companies
1D.C capital
$uilder fund
ICICI *rudential
*o5er
.ranklin India #lue
chip .und
analysis

TRCG REC(RD (. T1E *R(2ECTS"<
?nder this project we selected those funds that are introduced during the year 3449C45
As this was the year when major private sectors entered into mutual fund business until
that only the ?$I enjoyed the monopoly in this industry. $he main reason for this is to
study and analyze the industry properly.
.ranklin India #lue<chip .und607
$out .ranklin Templeton
#ranklin $empleton is one of the largestV private sector fund houses in the country with
over )s.933D6 crores of assets under management for over 85 lakh investor accounts Fas
of 2ecember 93 8==DG. It manages one of the most comprehensive ranges of mutual
funds F5BG catering to varied investor reIuirements and offering different investment
styles to choose from. It has *ffices in 99 cities and 'ollection 'entres in another 5A
locations across the country.
#ranklin $empleton Investments is one of the largest financial services groups in the
world based at 7an Mateo 'alifornia ?7A. $he group has ?7T A5D billion in assets
under management globally Fas of &ovember 9= 8==DG. #ranklin $empleton has A= years
of experience in investment management and with offices in over 84 countries provides
investment management and advisory services to a client base of over 3D.D million
unitholder accounts.
68
analysis

#ranklin $empleton Mutual #unds are managed by #ranklin $empleton Investments C a
global investment management major. #ranklin $empleton started their India operations
in 344A as $empleton Asset Management India Pvt. <imited. It flagged off the mutual
fund business with the launch of $empleton India "rowth #und in 7eptember 344A.
#ranklin $empleton Asset Management FIndiaG Private <imited acts as the asset
management company with $empleton holding a majority of D6 per cent of the eIuity.
.ranklin India #lue chip .und
#und 2etails/
Type of Scheme *pen (nded
/ature of Scheme (Iuity
Inception Date &ov 9= 3449
.ace Value6Rs3Unit7 3=
.und SiHe 6Rs% in crores7 85D3.5BBB on +an 93 8==B
Increase3Decrease since Dec ID, ?>>J 6Rs%
in crores7
C568.B66
*revious /ame Pioneer I$I 0luechip C "rowth
Minimum Investment 6Rs7 6===
*urchase Redemptions 2aily
/V Calculation 2aily
.und Mana+er >. &. 7iva 7ubramanian
Entry -oad (ntry <oad is 8.86E.
E:it -oad (xit <oad is =E.
($)ective" Aims to achieve a high degree of capital appreciation through investments in
wellCestablished large size blue chip companies
7cheme Performance FEG as on Mar 5 8==B
DK days D month I months D year I yrsL InceptionL
CD.B3 C3=.BB C3D.59 8D.9 98.5 8D.6
Top D> 1oldin+s as on 2an ID, ?>>M
69
analysis

Company /ature Value 6Cr%7 A
)eliance Industries <td (W 3B6.44 D.69
0harati $ele C Kentures (W 3A4.5A A.BA
<arsen . $oubro <imited (W 3A4.9 A.B6
1ousing 2evelopment #inance 'orporation <td (W 36A.94 A.99
"rasim Industries <td (W 39B.64 6.A3
I'I'I 0A&> <$2. (W 393.D6 6.99
>otak Mahindra 0ank <td. (W 389.45 6.=3
Infosys $echnologies <td (W 38=.93 5.BD
Aditya 0irla &uvo <imited. (W 3=9.4 5.8
0harat 1eavy (lectricals <td (W 4B.=5 9.4D
Top Industry llocation as on 2an ID, ?>>M
0anks 39.63DAE
*il . "as Petroleum . )efinery 38.3D8E
(ngineering . Industrial Machinery 4.939BE
$elecom B.93DBE
#inance D.3439E
'omputers C 7oftware . (ducation D.34=8E
(lectricals . (lectrical (Iuipments A.439DE
Auto . Auto ancilliaries A.D683E
'ement A.=4A9E
$extiles 5.8=9BE
65
analysis

7pecial #eatures/ (asy liIuidity / all transactions are processed within 9 working days.
Pioneer I$I 0luechip C "rowth changed to #ranklin India 0luechip C "rowth w.e.f Aug
9= 8==8.
Asset Allocation as on +an 93 8==B
E9uity De$t Money Market
4A.65 = 9.5A
#est and 5orst performance"
#est 6*eriod7 4orst 6*eriod7
Month 53.DB F3A!=8!3445 C 3B!=9!3445G C8D.B= F38!=6!8==A C 39!=A!8==AG
Wuarter 66.44 F36!38!344B C 3A!=9!3444G C93.63 F88!=8!8=== C 89!=6!8===G
Lear 344.58 F=5!=3!3444 C =5!=3!8===G C9A.65 F36!=4!8=== C 3D!=4!8==3G
Relative performance Bfund v3s Cate+ory 5iseC
66
analysis

.und Style"
*erformance nalysis"
#)A&><I& I&2IA 0luechip #undCCformerly Pioneer I$I 0luechip #undCChas been a top
performer almost since its inception in *ctober 3449. After the #ranklin $empletonC
Pioneer I$I merger in +uly 8==8 the scheme is managed by #ranklin $empleton
Investments but the eIuity fund management team is intact. >.&. 7iva 7ubramanian is
still the fund manager and )avi Mehrotra continues as 'hief Investment *fficer. Allaying
investorsH fears about a change in fund management styles Mehrotra says/ J$he stock
picking style will remain as that was a prereIuisite demanded by Pioneer I$I while
selling the funds.J
#I0'# was launched as a threeCyear closeCended fund but was converted to an openC
ended one in +anuary 344D. $he fund aims to provide medium to longCterm capital
appreciation by seeking steady and consistent growth from wellCestablished large
companies.
6A
analysis

6D
analysis

Ratin+% Outlook Money has consistently ranked #I0'# among the top performing funds
in the diversified eIuity category. $he fund has a good performance track record and has
delivered steady and consistent returns. In last five years its 'A") Fcompounded
annualised growth rateG has been 8A.35 per centP its threeCyear performance is =.A8 per
cent and oneCyear performance is 35.D5 per cent.
Its benchmark index 07( 7ensex on the other hand has reported a pathetic C3.49 per
cent for five years C33.9D per cent for three years and C3.D4 per cent for one year. In
money terms )s 3==== invested in #I0'# at inception F2ecember 3 3449G would have
grown to )s 688D= as of today. In contrast 7ensex would have given a meagre )s 4B=B.
0y outperforming its benchmark index #I0'# has proved Fat least historicallyG that
active funds can outperform index funds in long term.
6B
analysis

ICICI *RUDE/TI- *(4ER .U/D
A0*?$ I'I'I P)?2(&$IA<
ICICI *rudential Asset Management 'ompany enjoys the strong parentage of
Prudential plc one of ?>Hs largest players in the insurance & fund management sectors
and I'I'I 0ank a wellCknown and trusted name in financial services in India. ICICI
Prudential Asset Management Company, in a span of just over eight years has forged a
position of preCeminence in the Indian Mutual .und industry as one of the largest asset
management companies in the country with assets under management of )s. 9D4=A.85
crore Fas of March 93 8==DG. $he 'ompany manages a comprehensive range of schemes
to meet the varying investment needs of its investors spread across AB cities in the
country.
Sponsors
I'I'I 0ank is IndiaHs secondClargest bank with total assets of about )s. 955A6B crores as
at March 93 8==D and profit after tax of )s. 933= crores for the year ended March 93
8==D F)s. 865= crores for the year ended March 93 8==AG. I'I'I 0ank has a network of
about D3= branches and 56 extension counters and over 98D3 A$Ms. I'I'I 0ank offers a
wide range of banking products and financial services to corporate and retail customers
through a variety of delivery channels and through its specialised subsidiaries and
affiliates in the areas of investment banking life and nonClife insurance venture capital
and asset management. I'I'I 0ank set up its international banking group in fiscal 8==8
to cater to the cross border needs of clients and leverage on its domestic banking
strengths to offer products internationally. I'I'I 0ank currently has subsidiaries in the
?nited >ingdom )ussia and 'anada branches in 7ingapore 0ahrain 1ong >ong 7ri
<anka and 2ubai International #inance 'entre and representative offices in the ?nited
7tates ?nited Arab (mirates 'hina 7outh Africa and 0angladesh. ?> subsidiary of
64
analysis

I'I'I 0ank has established a branch in 0elgium. I'I'I 0ank is the most valuable bank in
India in terms of market capitalisation.
1eadIuartered in <ondon Prudential plc is a leading international financial services
group offering a significant portfolio of life insurance and fund management products in
the ?nited >ingdom the ?nited 7tates Asia and continental (urope.
Prudential plc is a leading international financial services group providing retail financial
products and services and fund management to many millions of customers worldwide.
As a group Prudential plc has as of 2ecember 93 8==A over "0P863 billion of funds
under management more than 8= million customers and over 89=== employees
worldwide as of 2ecember 93 8==A.In the ?nited >ingdom Prudential is a leading life
and pensions provider offering a range of retail financial products. M." is PrudentialHs
?> . (uropean #und Manager with around X86= billion of funds under management Fas
of 93 2ecember 8==AG. +ackson &ational <ife acIuired by Prudential in 34BA is a
leading provider of longCterm savings and retirement products to retail and institutional
customers throughout the ?nited 7tates. (gg provides banking insurance and investment
products through its Internet site www.egg.com. In Asia Prudential is the leading
financial services group with an extensive network of over 9= life insurance and 3= fund
management operations spanning 39 diverse markets.
A=
analysis

A3
analysis

ICICI *RUDE/TI- *(4ER MUTU- .U/D<0
ICICI *rudential *o5er is an openCended eIuity fund which does just that. $he
portfolio is made up of largeCcap and midCcap stocks and is aimed at capturing the
growth opportunities across multiple sectors in the market.
I/VESTME/T *1I-(S(*1!"
ICICI *rudential *o5er follows a blend of topCdown macro research to identify growth
sectors and bottomCup fundamental research to identify stocks. It seeks to optimise riskC
adjusted return by building a portfolio of large and midCcap stocks across select sectors.
ICICI *rudential *o5er is a multiCsector fund focused on investing in carefully selected
stocks offering optimum riskCadjusted return across select growth sectors.
Investment objective/ $o generate capital appreciation by actively investing in eIuity!
eIuity related securities. #or defensive considerations the 7cheme may invest in debt
money market instruments to the extent permitted under the )egulations. $he AM' will
have the discretion to completely or partially invest in any of the type of securities stated
above so as to maximize the returns.
A8
analysis

#enefits $y investin+ in this fund"
ICICI *rudential *o5er offers the following key benefits/
It gives you a core largeCcap portfolio with some exposure to midCcap stocks
It provides you the edge as it seeks to capture the best sectoral opportunities in the
market.
.und information
Inception Date Aug 85 3445
.und SiHe 6Rs% in crores7 3=45.=D83 on Mar 93 8==B
Increase3Decrease since .e$ ?E,
?>>M 6Rs% in crores7
C3BA.469
Rolled (ver To *pen (nded
*revious /ame Prudential I'I'I Power
Entry -oad
Amount 0et. = to 54444444 then (ntry
load is 8.86E. and Amount greater than
6======= then (ntry load is =E.
E:it -oad
.und mana+er
If redeemed bet. = Months to A MonthsP
and Amount 0et. = to 54444444 then (xit
load is 3E. If redeemed bet. A Months to
38 MonthsP and Amount 0et. = to
54444444 then (xit load is =.6E. and
Amount greater than 6======= then (xit
load is =E.
Mr Anand 7hah
A9
analysis

Top Ten holdin+s as on .e$ ?E, ?>>M
)eliance Industries <td (W 49.A3 D.93
7teel Authority of India <td (W A8.D3 5.4
7terlite Industries FIndiaG <td (W A8.89 5.BA
0harti Airtel <td (W 6D.B5 5.63
0harat 1eavy (lectricals <td (W 6A.A 5.58
Mee (ntertainment (nterprises <td (W 65.B6 5.8B
<arsen . $oubro <imited (W 5A.AA 9.A5
I'I'I 0A&> <$2. (W 56.A 9.6A
7un Pharmaceuticals Industries <td (W 59.49 9.59
?nion 0ank *f India <td (W 53.B4 9.8D
Top industry allocation as on .e$ ?E, ?>>M
0anks 38.DDA6E
*il . "as Petroleum . )efinery 33.6D=6E
1ousing . 'onstruction 4.9498E
(ntertainment B.D8=AE
7teel A.6=45E
(ngineering . Industrial Machinery 6.D48DE
Pharmaceuticals 6.==48E
$elecom 5.4A9AE
Metals 5.B6D4E
'omputers C 7oftware . (ducation 5.6B63E
sset llocation as on Mar ID, ?>>M
A5
analysis

45.64 = 6.53
A6
analysis

Scheme *erformance 6A7 as on pr I , ?>>M
&A C4.D8 C84.5 36.5B 98.A4 3D.96
/et sset Value 6Rs3Unit7 BA.B4 As *n Apr 9 8==B
#est and 5orst performance period "
#est period 4orst period
Month 95.94 F=9!38!3444 C =5!=3!8===G C96.5B F33!=5!8=== C 38!=6!8===G
Wuarter DB.84 F88!33!3444 C 88!=8!8===G C5A.64 F88!=8!8=== C 89!=6!8===G
Lear 836.=9 F=B!=9!3444 C =D!=9!8===G C64.A= F39!=9!8=== C 39!=9!8==3G
Relative *erformance 6.und v3s cate+ory7
AA
analysis

*erformance nalysis/
$his fund isnHt shooting out the lights but has put up a respectable return. Its 39Cyear
performance is suggestive of a decent record with neither a blockbuster performance nor
a massive blowCup. *nly one year F8===G did it land in the bottom Iuartile.
$he fundHs focus on fundamentals is its strength. It would be rare to come across any
unheard names in its portfolios. If they did appear it would be in miniscule proportions.
7ince the fund refuses to chase momentum plays that have the tendency to fall as
dramatically as they rise it steered clear of real estate stocks which had been in fashion in
the last couple of years. $his is precisely why the fund doesnHt set the charts on fire but
neither does it give its investors sleepless nights.
Although this is encouraging instability at the helm rarely benefits investors. $he high
degree of churn in fund management continues to worry. ?nder Anand 7hahHs leadership
Fsince +anuary 8==DG the portfolio has become more focused with under 96 stocks as
against the earlier count of 6=. 'onseIuently the concentration in the top three holdings
has also gone up from 36 per cent to over 8= per cent. 0ut once you realize that these
holdings include )eliance Industries 0harti Airtel and I'I'I 0ank any apprehensions on
this front disappear.
Its theme of core and feeder industries is more diverse than what appears at first blush. Its
inclusion of sectors as diverse as energy transportation financial services info tech
healthcare electricity media and hotels give it a more diversified slant. $he largeCcap tilt
along with its concentrated portfolio and broad theme make it an appealing option.
AD
analysis

12#' 'API$A< 0?I<2() #?&2
A0*?$ 12#' A77($ MA&A"(M(&$ '*MPA&L/
12#' Asset Management 'ompany <imited FAM'G was incorporated under the
'ompanies Act 346A on 2ecember 3= 3444 and was approved to act as an Asset
Management 'ompany for the Mutual #und by 7(0I on +une 9= 8===. $he sponsor
12#' was incorporated in 34DD as first specialised housing finance institution in India.
12#' provides financial assistance to individuals corporates and developers for the
purchase and construction of residential housing. It also provides propertyCrelated
services training and consultancy. In the mutual fund venture 12#' has tied up with
7tandard <ife one of the leading Insurance companies in the ?nited >ingdom having
vast experience in management of funds. 12#' has developed a strong and dedicated
team of agents that market its fixed deposit products. $hese key partners would constitute
the backbone of the marketing and distribution network of Mutual #und and will remain a
central theme of the organisational framework in times to come.
&o. of schemes BB
&o. of schemes including options 963
(Iuity 7chemes 95
2ebt 7chemes 848
7hort term debt 7chemes 36
(Iuity . 2ebt A
Money Market =
"ilt #und 5
.und Mana+ers " Anil 0amboli 'hirag 7etalvad 2hawal Mehta Mustafa Mehmood
Prashant +ain 7habbir >apasi 7hobhit Mehrotra 7rinivas )ao )avuri Kinay )
>ulkarni.
AB
analysis

#(UT 1D.C C*IT- #UI-DER .U/D"
12#' 'apital 0uilder is a valueCstyle diversified eIuity fund investing in midcaps
Fbenchmark 7.P '&U 6==G. Kalue style investing involves identifying good stocks that
trade at a steep discount to their fair value.
I/VESTME/T ST!-E
#?&2 I&#*)MA$I*&/
Inception Date 2ec 93 3449
.und SiHe 6Rs% in crores7 A56.D3B3 on Mar 93 8==B
Increase3Decrease since .e$ ?E, ?>>M 6Rs%
in crores7
C3=8.6DA
Rolled (ver To *pen (nded
*revious /ame
Murich I ' 0 # C Murich India Wuantum
"rowth #und
.und Mana+er 'handresh &igam
Entry -oad
Amount 0et. = to 54444444 then (ntry load
is 8.86E. and Amount greater than
6======= then (ntry load is =E.
E:it -oad (xit <oad is =E.
Top Ten holdin+s are as follo5s"
A4
analysis

I'I'I 0A&> <$2. (W 65.58 D.8D
7tate 0ank of India (W 5=.68 6.53
0harat 1eavy (lectricals <td (W 5=.86 6.9B
'rompton "reaves <td (W 95.9B 5.64
7intex Industries <td (W 9=.43 5.39
(xide Industries <td (W 9=.85 5.=5
IP'A <aboratories <td (W 84.D5 9.4D
7># 0earings India <td (W 84.3D 9.4
Indraprastha "as <td (W 86.8B 9.9B
$hermax <imited (W 85.BA 9.98
Top industry allocation .e$ ?E, ?>>M
0anks 3D.DA94E
(lectricals . (lectrical (Iuipments 4.4D9E
Pharmaceuticals 4.543E
#inance B.8=DDE
Auto . Auto ancilliaries D.45=3E
(ngineering . Industrial Machinery D.6DADE
7teel 6.A668E
'hemicals 6.=38BE
Metals 5.3AAE
Plastic 5.39=4E
D=
analysis

sset llocation as on Mar ID, ?>>M "
48.8 = D.B
Scheme *erformance 6A7 as on pr K , ?>>M
&A C3=.BD C98.4 88.49 86.DA 35.48
D3
analysis

#est and 4orst performance of the fund"
#est performance 5orst performance
Month 9=.49 F8=!=9!344B C 83!=5!344BG C99.BD F38!=6!8==A C 39!=A!8==AG
Wuarter 56.D8 F88!=4!8==9 C 88!38!8==9G C98.4= F=5!=3!8==B C =5!=5!8==BG
Lear 35A.5B F85!=5!8==9 C 89!=5!8==5G C5A.=A F9=!33!3445 C 9=!33!3446
Relative performance of the fund6fund v3s cate+ory avera+e7
D8
analysis

*erformance analysis of the fund"
(Iuity fund investors have rarely had it so ironical. 2uring 8==9 time they were jubilant
spectators to an astonishing surge in eIuity markets that saw them double their money in
less than 38 months. A year later they have seen more than 86E of their gains shaved off.
@hile there is nothing startling about this to the seasoned eIuity fund investor it is
nevertheless disIuieting to investors with a low to moderate risk profile. At Personalfn
we have seen a lot of investors who have been distraught at the volatility in stock markets
over the last few months. $his got us to look at funds that did reasonably well during the
bull run last year and redeemed themselves eIually well during the slide over the last 9
months. *ne fund that caught our eye was 1D.C Capital #uilder.
12#' 'apital 0uilder is a fund that has for long lived in the shadow of its more
renowned siblings Q 12#' (Iuity and 12#' $op 8==. 1owever the fund is now
emerging as a force to reckon with and its performance in the year 8==5 and 8==6. 12#'
'apital 0uilder is a valueCstyle diversified eIuity fund investing in midcaps Fbenchmark
7.P '&U 6==G. Kalue style investing involves identifying good stocks that trade at a
steep discount to their fair value.
Investors can retain their holdings in 12#' 'apital 0uilder. After hugely under
performing the market in 8==A the fund has saw a pickCup in performance over a oneC
year period. 'apital 0uilder-s portfolio has undergone a major overhaul and wears a more
aggressive look. $his makes it more suitable to investors with a risk appetite.
@hile the fund enjoys a long track record it has displayed a cheIuered performance over
the past three years. $his may be partly due to the freIuent changes in the fund-s
positioning. 'apital 0uilder has changed its focus from a value!defensive fund to a midC
cap focused fund in 8==9C=5 and now sports a profile similar to other diversified funds.
D9
analysis

7ome of the changes are likely to have occurred due to fund manager changesP three fund
managers have handled this fund in the last three years. Investors can wait for the fund to
display a greater consistency in its performance over the next year or so before
contemplating fresh exposures. #or now the fund need not form a core part of your
portfolio. 12#' 'apital 0uilder has generated a return of about 66 per cent during 8==6
beating the category average of about 56 per cent. ?ntil 8==A 'apital 0uilder did display
a strong performance record and was among top choices for those who desired a fund
with a midCcap focus.
1owever it was a laggard in 8==A. In a year when only an aggressive investment strategy
helped funds outpace the markets 'apital 0uilder-s focus on defensive sectors such as
#M'" and its wellCdiversified approach to investing worked against its favour.
$he massive underperformance resulted in considerable outflows from the fund which
added instability to its performance. *ver the past year however the portfolio appears to
have undergone significant changes. 'apital 0uilder shed its exposure to #M'" and auto
ancillaries and has considerably stepped up its holdings in banks electricals and electrical
eIuipments capital goods and metals stocks etc.
D5
analysis

RETUR/S (. T1E .U/DS C(MRED T( #E/C1 MRG"
D%.R/G-I/ I/DI #-UE<C1I* .U/D
0
5
10
15
20
25
30
35
40
since 5 yr since 3 yr since 1 yr
FIBCF
BSE SENSEX
?%ICICI *RUDE/TI- *(4ER .U/D
0
10
20
30
40
50
60
ICICI PPF
S&P CNX NIFTY
I%1D.C C*IT- #UI-DER .U/D
D6
analysis

0
10
20
30
40
50
60
HDFC CBF
S&P CNX 500
Risk and Return nalysis of the Schemes
@henever an investor goes for investment he!she will use to analyze the )isk associated
with that particular investment and what may be the expected return by investing their
0ut some times expected returns may vary due to some reasons so it is very important for
a investor to calculate about the rate of risk associated with the particular stock. $here are
mainly two types of risks/
3. 7ystematic )isk
8. unsystematic )isk
Systematic risk" $he systematic risk affects the entire market. $he economic
conditional political situations sociological changes affect the entire market in
turn affecting the company and even the stock market. $hese situations are
uncontrollable by the corporate and investor.
Unsystematic risk" $he unsystematic risk is uniIue to industries. It differs from
industry to industry. ?nsystematic risk stems from managerial inefficiency
technological change in the production process availability of raw materials
changes in the consumer preference and labor problems. $he nature and magnitude
DA
analysis

of above mentioned factors differ from industry to industry and company to
company.
DD
analysis

T1E T((-S USED .(R C-CU-TI(/ (. RISG /D RETUR/"
3. 7tandard 2eviation
8. 0eta
9. Alpha
5. 7harp ratio
6. $reynor ratio
A. Arithmetic mean
ST/DRD DEVITI(/
7.2S YFyCLGZ
&
$he standard deviation is a measure of the variables around its mean or it is the
sIuare root of the sum of the sIuared deviations from the mean divided by the
number of observations.7.2 is used to measure the variability of return i.e. the
variation between the actual and expected return.
#ET
0eta S &V[ULC F[UG F[L! &FUVUG V F[xG
@here
DB
analysis

&C &o of observation
UC $otal of market index value
LC $otal of return to &av
0eta describes the relationship between the stock-s return and index returns. In
short it mainly analyzes the sensitivity of stock to systematic risk.
If the 0($A is =/ &o risk
If the 0($A is 3/ 7ame risk profile as the market as a whole.
If the 0($A is <ess than 3/ It is as sensitive to market risk.
If the 0($A is More than 3/ It is more sensitive to the market risk.
&egative beta value indicates that the stocks return move in opposite direction to
the market return.
-*1
Alpha S LC betaFUG
@here
LC avrage return to nav return
UC average return to market index .
D4
analysis

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.
B=
analysis

S1R*E RTI(
7tS )p CC)f
7.2
@1()(
)p Q Avereage return to portfolio
)fN)isk free rate of interest
7.2C 7tandard 2eviation
7harpe-s performce index gives a single value to be used for the performance
ranking of various funds or portfolios. 7harpe index measures the risk premium of
the portfolio relative to the total amount of risk in the portfolio. $he risk premium
is the difference between the portfolio-s average rate of return and the risk less rate
of return. $he standard deviation of the portfolio indicates the risk.
1igher the value of sharpe ratio better the fund has performed. 7harpe ratio
can be used to rank the desirability of funds or portfolios. $he fund that has
performed well comapred to other will be ranked first then the others.
B3
analysis

TRE!/(R RTI(
$yS )pN)f
0
@1()(
)pC Average return to portfolio
)fC )isk less rate of interest.
0C 0eta coeffecient
$reynor ratio is based on the concept of characteristic line. 'haracteristic
line gives the relation between a given market return and fund-s return. $he fund-s
performance is measured in relation to market performance. $he ideal fund-s return
rises at a faster rate than the market performance when the market is moving
upwards and its rate of return declines slowly than the market return in the decline.
$reynor-s risk premium of the portfolio is the difference between the aveage return
and the risk less rate of return. $he risk premium depends on the systematic risk
assumed in a portfoilo.
B8
analysis

B9
analysis

Risk and Return analysis of follo5in+ Data"
7'1(M(7 7(<('$(2 #*) )I7> A&2 )($?)& A&A<L7(7 A)(/
.U/D /ME #E/C1 MRG I/DEX
#)A&><I& 0<?('1IP #?&2 07( 7(&7(U
I'I'I P)?2(&$IA< P*@() #?&2 7.P '&U &I#$L
12#' 'API$A< 0?I<2() #?&2 7.P '&U 6==
B5
analysis

.R/G-I/ #-UEC1I* .U/D"
2ate Sense: x xVx &AK y yCy bar yCybar sI xy
9=C+anC8==5 @,FE
@%FJ = =
@D%F?
= = = =
8DC#ebC8==5 @,FF
J%@D F=.54G =.855558
@?%@J
3.B5=9D8 C=.D459A =.A93==6 C=.4=44
93CMarC8==5 @,@E
>%F> F3.9AG 3.B53694
@?%@?
C=.=4633 C8.D84B5 D.568=95 =.384=A4
9=CAprC8==5 @,F@
@%>E 3.36 3.99=AA8
@K%>>
8.B3D4D5 =.3B9855 =.=996DB 9.86=A6A
93CMayC8==5 K,J@
E%F? F36.B9G 86=.D94D
K@%?@
C3A.8=9D C3B.B9B5 965.BBAA 86A.6B3B
9=C+unC8==5 K,JE
@%KF =.D6 =.6AD=33
KJ%>K
9.466B=3 3.983=D3 3.D5688B 8.4DBD89
9=C+ulC8==5 @,DJ
>%I? D.B8 A3.3=639
KE%FK
6.68D833 8.B485B3 B.9AA556 59.8=A=B
93CAugC8==5 @,DE
?%>M =.58 =.3DD38A
@>%@K
3.B39=65 C=.B83AB =.AD6368 =.DA9=54
9=C7epC8==5 @,@M
I%FD D.65 6A.BA69
@I%@F
6.4D65A6 9.95=D96 33.3A=63 56.=A=59
84C*ctC8==5 @,FJ
?%?J 3.64 8.6839=6
@I%DF
C=.D5AB9 C9.9B36A 33.59548 C3.3B6BA
9=C&ovC8==5 F,?I
K%?E 4.43 4B.3D85B
@E%IE
33.D3495 4.=B5A=B B8.69=3 33A.33DA
93C2ecC8==5 F,F>
?%FE 6.43 95.4348B
FK%>J
D.BB=335 6.8569B5 8D.635=A 5A.6A664
93C+anC8==6 F,@@
@%EK F=.D3G =.6=398D
FI%D?
C3.5B8D6 C5.33D5B 3A.469AD 3.=54B6A
8BC#ebC8==6 F,JD
I%MF 8.53 6.B=8966
F@%FJ
5.=94485 3.5=6345 3.4D56D 4.D935=3
93CMarC8==6 F,KE
?%M? F9.84G 3=.B948
F?%JM
C5.5==D4 CD.=9668 54.54B6D 35.5BBD
84CAprC8==6 F,D@
K%KK F6.83G 8D.3A=B3
@E%FD
C6.=549B CD.AB533 64.=5669 8A.9369A
93CMayC8==6 F,JD
@%DD 4.33 B8.44886
FK%I>
D.BADB=D 6.899=DD 8D.9B63 D3.AD6D4
9=C+unC8==6 J,DE
I%M@ D.39 6=.B8AB6
FJ%?>
5.63=3=4 3.BD69D4 9.63D=56 98.3694
84C+ulC8==6 J,FI
@%K? A.35 9D.ADD
JI%>M
B.D6 A.3368D 9D.94A69 69.D=B4
93CAugC8==6 J,M>
@%KI 8.89 5.46DD98
JF%ME
6.8395A6 8.6DBD96 A.A54BD8 33.A=B8B
9=C7epC8==6 M,FI
K%KM 3=.A8 338.B368
M?%M@
D.D63999 6.33AA=9 8A.3D4A9 B8.99=53
93C*ctC8==6 J,ME
?%I? FB.A=G D9.BD484
J@%EE
CB.8B==8 C3=.435B 334.3934 D3.3A495
9=C&ovC8==6 M,JM
M%MD 33.9A 384.=8D9
M@%JK
38.B9=A5 3=.34643 3=9.46A6 356.D595
9=C2ecC8==6
E,IE A.49 5B.=99A6
E>%KM
6.68B953 8.B49A33 B.9D84BD 9B.9354
B6
analysis

J%EI
BA
analysis

93C+anC8==A E,ED
E%ME 6.66 9=.B5AD4
EF%FJ
A.B53843 5.8=A6A3 3D.A4636 9D.44A56
8BC#ebC8==A D>,IJ
>%?K 5.65 8=.A3=53
D>D%MM
6.9B45A4 8.D65D94 D.6BB6BB 85.5AD5B
93CMarC8==A DD,?J
E%EF B.DD DA.4663B
DDD%MM
4.B365A4 D.3B=D94 63.6A9=3 BA.3=698
8BCAprC8==A D?,>K
?%@F A.DA 56.D=A66
DDJ%IF
5.B4B3=6 8.8A99D6 6.388BAA 99.33559
93CMayC8==A D>,IE
M%FD F39.A6G 3BA.9655
D>D%EE
C39.=4A6 C36.D938 85D.5D=8 3DB.DB34
9=C+unC8==A D>,F>
E%?@ 8.=9 5.3=98B
D>>%IM
C3.6DB64 C5.83998 3D.D68=9 C9.34DAD
93C+ulC8==A D>,JK
I%MM 3.8D 3.A3=98B
D>D%@K
3.366A=4 C3.5D438 8.3BDB 3.5AA568
93CAugC8==A DD,FE
E%>@ B.B4 D4.=9B6D
DD>%MI
4.3543=5 A.6359D5 58.59D=A B3.99BBA
84C7epC8==A D?,K@
K%K? A.5A 53.ABBA4
DDJ%KD
6.49D=83 9.9=8843 3=.4=638 9B.99959
93C*ctC8==A D?,EF
D%E> 5.=D 3A.A=93A
D?K%>?
6.A84B55 8.446335 B.4D=D=B 88.49443
9=C&ovC8==A DI,FE
F%ID 6.AD 98.3=86D
D?M%EE
5.==D53B 3.9D8ABB 3.BB58D8 88.D=6AB
84C2ecC8==A DI,JM
F%ED =.AA =.59D6D8
DID%FJ
8.=DDAB C=.66D=6 =.93=9=5 3.9D59A4
93C+anC8==D DK,>E
>%E? 8.83 5.BA89=3
DIK%?I
3.455866 C=.A4=5B =.5DAD6D 5.8BD8=9
8BC#ebC8==D D?,EI
M%>E FB.3BG AA.495DB
D??%I@
CB.B6=5B C33.5B68 393.43=3 D8.5=4=5
9=CMarC8==D DI,>J
?%D> 3.=5 3.=D8B9B
D??%EI
=.5D5=6 C8.3A=AB 5.AAB694 =.543=33
9=CAprC8==D DI,MJ
?%IJ A.38 9D.5DB63
DID%K@MD
A.49D9A9 5.9=8A99 3B.638A6 58.5D=98
93CMayC8==D DK,@K
K%KF 5.B5 89.5D834
DIE%JMKI
A.999D84 9.A4B444 39.AB864 9=.AB6D8
84C+unC8==D DK,F@
>%@D =.D9 =.693A6
DK?%KI>F
3.B49393 C=.D53A =.6544A4 3.9B=9A5
93C+ulC8==D D@,@@
>%EE A.36 9D.DDB98
D@D%>J@F
A.=A4A89 9.595B49 33.D4B54 9D.9=A9D
93CAugC8==D D@,ID
M%F> F3.54G 8.899366
DKM%DJMM
C3.43D56 C5.6683B 8=.D8896 8.BA69B4
8BC7epC8==D DJ,?E
D%D> 38.BB 3A6.B=59
DF@%>>?K
33.9696B B.D3BB63 DA.=3B9A 35A.3455
93C*ctC8==D DE,MI
J%EE 35.D9 83A.46DD
DMK%I>JF
33.A4446 4.=A6883 B8.3DB89 3D8.9959
9=C&ovC8==D DE,IF
I%DE F8.94G 6.D8B9=5
DMI%MJ@F
C=.89594 C8.BA438 B.893B66 =.6A=4BB
93C2ecC8==D ?>,?M
F%EE 5.DD 88.DA36A
DEK%>E??
6.66A86D 8.48368A B.69693A 8A.6=B94
93C+anC8==B
DJ,FK F39.==G 3A4.3856
DFF%FI@F
C35.35A8 C3A.DB=4 8B3.64B5 3B9.4AD4
BD
analysis

M%JD
BB
analysis

385.48AB 89B9.D46 total 384.3=3B 8=94.8A8 893D.D96
A)I$1M($I' M(A&/
A)I$1M($I' M(A& ")*@$1 *P$I*&
US [L
&
129.1018 S 2.63
54
ST/DRD DEVITI(/"
7.2 ")*@$1
7.2SYFyCLGZ
&
8=94.8A8 S 0.92
54
B4
analysis

4=
analysis

0($A
A<P1A
71A)P( )A$I*
7tS )pC)f
7.2

43
0($A ")*@$1
S &V[ULC F[UG F[LG
&V [UZ CF[UGZ
54V2317.73.CF124.92*129.1G S 0 .96
54 V2383.79Q F124.92GZ
A<P1A ")*@$1
S LC0FUG 2.63C 0 .96 F2.54) 0.179
analysis

)f S $he risk less return for all the schemes is taken to be 4.6E
)pS alpha \beta FiG
i S Market returns F)mG
al b i
2004 0.17986 0.96286 1.45 1.396147 1.576007
2005 0.17986 0.96286 3.176 3.05804336 3.23790336
2006 0.17986 0.96286 3.418 3.29105548 3.47091548
2007 0.17986 0.96286 3.449 3.32090414 3.50076414
11.78558!4
)p S =.=845A5
)f S =.=46
7harpe ratio "rowth
)pC)f
7.2
=.=845C=.=46 S "0.0711
=.48
$)(L&*) )A$I*
$)(L&*) )A$I* ")*@$1
)pC)f
0
=.=845 Q =.=46 SC=.=AB
0 .96
48
analysis

49
analysis

ICICI *RUDE/TI- *(4ER .U/D
#$%&
CNX
NIFTY ' '*' NAV ( ("( ba)
("(ba)
s* '(
30"+an"04 206242 0 0
2!!"
0 0 0 0
27"Feb"04 20524 "0.48584 0.236038
2#2"
1.385521 "1.4762499 2.1793 "0.6731
31"Ma)"04 202025 "1.56646 2.453793
2!11
"3.9631 "6.8248734 46.579 6.20804
30"$,)"04 204!22 1.384482 1.916791
2#34
4.375667 1.51389582 2.2919 6.05803
31"Ma("04 16#!16 "17.0909 292.1001
245"
"16.2577 "19.11944 365.55 277.859
30"+un"04 1"2"#3 1.753074 3.073268
253!
3.296703 0.4349321 0.1892 5.77936
30"+ul"04 1!"!62 8.720839 76.05304
26#1
6.028369 3.1665976 10.027 52.5724
31"$u-"04 1!!20# 0.18471 0.034118
2!05
4.236343 1.37457217 1.8894 0.7825
30".e,"04 202062 7.360434 54.17599
2#!3
6.345811 3.48403985 12.139 46.7079
29"Oct"04 206#3# 2.413616 5.82554
305
2.246061 "0.6157102 0.3791 5.42113
30"/0v"04 226!## 9.645354 93.03286
3335
9.344262 6.4824911 42.023 90.1287
31"#ec"04 241!!! 6.606023 43.63954
36#!
10.88456 8.02278652 64.365 71.9036
31"+an"05 23#3"6 "1.0385 1.078476
361#
"2.13629 "4.9980611 24.981 2.21853
28"Feb"05 244"#4 2.263385 5.122911
3"#!
4.946118 2.08434651 4.3445 11.195
31"Ma)"05 236#6# "3.19657 10.21803
362#
"4.44971 "7.3114816 53.458 14.2238
29"$,)"05 2214#6 "6.52955 42.63497
3531
"2.70047 "5.5622396 30.939 17.6328
31"Ma("05 2433"3 9.876928 97.5537
3!35
8.609459 5.74768788 33.036 85.035
30"+un"05 25###3 6.829024 46.63557
3#61
3.285528 0.42375683 0.1796 22.4369
29"+ul"05 2"1124 4.281269 18.32927
4445
12.21914 9.35736538 87.56 52.3134
31"$u-"05 2!01## 3.347177 11.20359
4""!
7.491564 4.62979236 21.435 25.0756
30".e,"05 306615 9.427585 88.87937
503"
5.420678 2.55890691 6.548 51.1039
31"Oct"05 2"#5!# "8.81431 77.69208
4531
"10.0457 "12.907433 166.6 88.5456
30"/0v"05 312"! 11.87135 140.929
50"1
11.9179 9.05612772 82.013 141.482
30"#ec"05 33533" 7.211778 52.00975
54!5
8.16407 5.302299 28.114 58.8775
31"+an"06 354##2 5.861268 34.35446
5#"4
8.915223 6.05345214 36.644 52.2545
28"Feb"06 363#43 2.521465 6.357787
6226
4.218279 1.35650801 1.8401 10.6362
31"Ma)"06 402!!2 10.6992 114.4729
6#16
11.08256 8.22078582 67.581 118.575
29"$,)"06 4213!! 4.593405 21.09937
"405
7.070561 4.20878982 17.714 32.4779
31"Ma("06 364231 "13.564 183.9817
64!"
"12.397 "15.2588 232.83 168.153
30"+un"06 3"21"1 2.179935 4.752118
61"4
"4.82503 "7.6868059 59.087 "10.518
31"+ul"06 3"4546 0.638148 0.407232
6263
1.441529 "1.4202422 2.0171 0.91991
31"$u-"06 40"355 8.759672 76.73185
6!"1
9.707808 6.84603656 46.868 85.0372
29".e,"06 42!!#" 5.288262 27.96572
"2"6
5.894339 3.03256733 9.1965 31.1708
31"Oct"06 44"65 4.372378 19.11769
"622
4.75536 1.89358889 3.5857 20.7922
30"/0v"06 4"2#13 5.643471 31.84877
"#55
4.368932 1.50716084 2.2715 24.6559
29"#ec"06 4"5!45 0.619987 0.384384
!16"
2.664991 "0.1967806 0.0387 1.65226
31"+an"07 4!##3# 2.961889 8.772786
!332
2.020326 "0.8414455 0.708 5.98398
28"Feb"07 4504"3 "8.05529 64.88767
""66
"6.79309 "9.6548581 93.216 54.7203
30"Ma)"07 4605!# 2.24564 5.042897
""4#
"0.2189 "3.0806741 9.4906 "0.4916
30"$,)"07 4#3446 7.133692 50.88956
!35
7.755839 4.89406826 23.952 55.3278
31"Ma("07 51!5#5 5.096606 25.9754
!#2
6.826347 3.96457611 15.718 34.7912
45
analysis

29"+un"07 5223!2 0.730242 0.533254
!#"2
0.58296 "2.2788116 5.193 0.4257
46
analysis

31"+ul"07 54!325 4.966289 24.66403
#2"5
3.377173 0.51540223 0.2656 16.772
31"$u-"07 54112# "1.31236 1.72229
#126
"1.60647 "4.4682402 19.965 2.10827
28".e,"07 60#411 12.61843 159.2248
#!65
8.097743 5.23597151 27.415 102.181
31"Oct"07 "1633 17.54465 307.8146
11101
12.52914 9.66737224 93.458 219.819
30"/0v"07 6##"6 "2.31318 5.3508
11125
0.216197 "2.6455745 6.9991 "0.5001
31"#ec"07 "4614! 6.62913 43.94536
12241
10.03146 7.16968948 51.404 66.4999
31"+an"08 624545 "16.2974 265.6065
10266
"16.1343 "18.996074 360.85 262.948
124.0164 2650.732 $%$&' 140.2268 2275.1 2489.28
A)I$1M($I' M(A&/
A)I$1M($I' M(A& ")*@$1 *P$I*&
US [L
&
140.2 S 2.86
54
ST/DRD DEVITI(/"
7.2 ")*@$1
7.2SYFyCLGZ
&
2275.1 S 0.973
54
4A
analysis

4D
analysis

0($A
A<P1A

71A)P( )A$I*
7tS )pC)f
7.2
(ea)s al,1a beta i
2004 0.55 0.9133 1.577 1.440274 1.990274
2005 0.55 0.9133 2.96 2.703368 3.253368
2006 0.55 0.9133 3.13 2.858629 3.408629
2007 0.55 0.9133 4.02 3.671466 4.221466
t0tal 12.87374
4B
0($A ")*@$1
S &V[ULC F[UG F[LG
&V [UZ CF[UGZ
54V2489.28.CF 124.01*140.2G S 0 .91
54 V2650.7Q F124.01GZ
A<P1A ")*@$1
S LC0FUG 2.86C 0 .91 F2.53) 0.55
analysis

44
analysis

)pS=.=983B5
)f S =.=46
7harpe ratio "rowth
)pC)f
7.2
=.=98C=.=46 S C=.=A5
=.4D9
$)(L&*) )A$I*
$)(L&*) )A$I* ")*@$1
)pC)f
0
=.=98 Q =.=46 S C=.=ABD
0 .91
3==
analysis

3=3
analysis

1D.C C*IT- #UI-DER .U/D"
#$%& C/X @>>' '*' /V ( ("( ba) ("(ba) s* '(
30-Jan-04 145#! 0 0 22.751 0 0 0 0
27-Feb-04 1442! "1.16454 1.356161 22.621 "0.5714 "3.61173 13.04461 0.66542394
31-Mar-04 145"5 1.018852 1.03806 22.863 1.069802 "1.97053 3.882975 1.08997056
30-Apr-04 150"55 3.433962 11.7921 24.721 8.126668 5.086339 25.87084 27.9066697
31-May-04 122655 "18.6395 347.4315 21.541 "12.8636 "15.9039 252.9336 239.770462
30-Jun-04 124! 1.748808 3.058328 22.364 3.820621 0.780292 0.608856 6.68153141
30-Jul-04 135145 8.289263 68.71188 24.089 7.713289 4.67296 21.83656 63.9374815
31-Aug-04 13""2 1.905361 3.6304 26.243 8.941841 5.901512 34.82784 17.0374337
30-Sep-04 14"!"5 7.373657 54.37081 27.645 5.342377 2.302048 5.299425 39.392854
29-Oct-04 150205 1.575655 2.482689 28.404 2.745524 "0.29481 0.08691 4.32599831
30-Nov-04 16532 10.06291 101.2622 31.664 11.47726 8.436928 71.18175 115.494648
31-ec-04 1!04# 9.176143 84.2016 35.22 11.23042 8.19009 67.07758 103.051937
31-Jan-0! 1"6!25 "2.03058 4.123269 34.746 "1.34583 "4.38616 19.23836 2.73281243
2"-Feb-0! 1!2"4 3.345115 11.1898 36.32 4.530018 1.489689 2.219173 15.1534317
31-Mar-0! 1""2!5 "2.98512 8.910914 35.744 "1.5859 "4.62623 21.40202 4.73410382
29-Apr-0! 16!!65 "4.74941 22.55694 35.926 0.509176 "2.53115 6.406734 "2.4182898
31-May-0! 1!34!5 8.657804 74.95756 37.666 4.843289 1.80296 3.250665 41.9322447
30-Jun-0! 1#062 3.888601 15.12122 37.474 "0.50974 "3.55007 12.60301 "1.9821893
29-Jul-0! 202"4 6.3582 40.4267 41.82 11.59737 8.557045 73.22302 73.7384194
31-Aug-0! 212635 4.880635 23.8206 45.956 9.890005 6.849676 46.91806 48.2695064
30-Sep-0! 22"4 6.943824 48.21669 48.846 6.288624 3.248295 10.55142 43.6670971
31-Oct-0! 206"! "9.06772 82.22358 44.938 "8.00066 "11.041 121.9033 72.5477171
30-Nov-0! 230615 11.52674 132.8658 49.433 10.00267 6.962341 48.4742 115.298214
30-ec-0! 245#2 6.636602 44.04449 51.96 5.11197 2.071641 4.291695 33.9261092
31-Jan-0# 25!5#5 5.154115 26.5649 54.099 4.116628 1.076299 1.15842 21.2175757
2"-Feb-0# 265!#5 2.822947 7.96903 55.293 2.207065 "0.83326 0.694329 6.2304272
31-Mar-0# 2#1035 9.45486 89.39438 60.169 8.818476 5.778147 33.38698 83.3774571
2"-Apr-0# 3064" 5.303486 28.12696 65.153 8.283335 5.243006 27.48911 43.9305513
31-May-0# 263525 "14.0128 196.3583 56.969 "12.5612 "15.6015 243.4078 176.017497
30-Jun-0# 25625 "2.76065 7.621182 50.408 "11.5168 "14.5571 211.9097 31.7938131
31-Jul-0# 256255 0.001951 3.81&"06 50.059 "0.69235 "3.73268 13.9329 "0.0013509
31-Aug-0# 2!0"#5 9.576399 91.70741 53.977 7.826764 4.786435 22.90996 74.9522151
29-Sep-0# 2#!!25 6.421055 41.22994 57.277 6.113715 3.073386 9.445702 39.2564979
31-Oct-0# 311455 4.226554 17.86376 60.551 5.716081 2.675753 7.159651 24.1593271
30-Nov-0# 32!045 5.326612 28.3728 63.082 4.179947 1.139618 1.29873 22.2649592
29-ec-0# 32#505 0.445061 0.198079 63.171 0.141086 "2.89924 8.405609 0.06279195
31-Jan-07 33#31 2.975676 8.854645 64.459 2.03891 "1.00142 1.002839 6.06713558
2"-Feb-07 310""5 "8.40971 70.72329 61.259 "4.9644 "8.00472 64.07562 41.7491495
30-Mar-07 314535 1.209879 1.463806 60.3 "1.56548 "4.60581 21.21352 "1.8940458
30-Apr-07 33"#1 7.431605 55.22876 65.818 9.150912 6.110583 37.33923 68.0059677
3=8
analysis

31-May-07 356365 5.461513 29.82813 69.818 6.077365 3.037036 9.223587 33.1916097
29-Jun-07 3625"5 1.742595 3.036639 73.27 4.944284 1.903955 3.625044 8.61588591
31-Jul-07 3"!3!5 4.360477 19.01376 76.914 4.973386 1.933057 3.73671 21.6863364
31-Aug-07 3"1155 "1.91075 3.650974 76.323 "0.76839 "3.80872 14.50635 1.46820422
2"-Sep-07 41!!55 12.85177 165.1681 83.094 8.871507 5.831178 34.00263 114.014594
31-Oct-07 4!06!5 14.76167 217.907 96.061 15.60522 12.56489 157.8764 230.359108
30-Nov-07 4!6#55 1.304389 1.701429 99.034 3.094908 0.054579 0.002979 4.03696307
31-ec-07 5354" 9.962933 99.26003 106.538 7.577196 4.536867 20.58316 75.4910926
31-Jan-0" 4349 "18.7816 352.7497 88.367 "17.0559 "20.0962 403.8579 320.337362
123.1053 2751.786 $%$&' 148.9761 2219.377 2513.34471
A)I$1M($I' M(A&/
A)I$1M($I' M(A& ")*@$1 *P$I*&
US [L
&
148.97 S 3.04
54
ST/DRD DEVITI(/"
7.2 ")*@$1
7.2SYFyCLGZ
&
2219.377 S 0.96
54
3=9
analysis

0($A
A<P1A
71A)P( )A$I*
al b i 2*i ),
2004 0.84 0.8757 2.065 1.8083205 2.6483205
2005 0.84 0.8757 2.78 2.434446 3.274446
2006 0.84 0.8757 2.66 2.329362 3.169362
2007 0.84 0.8757 4.31 3.774267 4.614267
t0t 13.706395!4
)p S =.=95
)f S =.=46
3=5
0($A ")*@$1
S &V[ULC F[UG F[LG
&V [UZ CF[UGZ
54V2513.54.CF 123.10*148.7G S 0 .87
54 V2751.7Q F123.10GZ
A<P1A ")*@$1
S LC0FUG 3.04C 0 .87 F2.51) 0.84
analysis

3=6
analysis

7harpe ratio "rowth
)pC)f
7.2
=.=95C=.=46 S C=.=A9
=.4A
$)(L&*) )A$I*
$)(L&*) )A$I* ")*@$1
)pC)f
0
=.=95 Q =.=46 S C=.=A4
0 .87
3=A
analysis

3=D
analysis

C-CU-TED DTS"
3=B
<>%>FEI

<>%>FID >%MK >%MJ@J >%EFDK I%>K>I?
1D.C
capital
$uilder
fund
<>%>FMJ <>%>FK@ >%@@ >%EDII >%EJIK ?%MFDJJ ICICI
*ru
*o5er
<>%>FM> <>%>JDD >%DJEMF >%EF?MF >%E?D@E ?%FIKJI
.rankli
n $lue<
chip
fund
Treynor
Ratio
Sharpe
Ratio
alpha #eta SD rithm
etic
Mean
.und
analysis

.I/DI/0S (. T1E *R(2ECT RE"
Among these three funds more popular among investors is #ranklin blue chip
fund.
0oth #ranklin blue chip fund and I'I'I pru power fund faced problems during
8=== and 8==3 main reasons are/
3.>etan Parek-s case and
8.7eptember 33
th
attack on ?7 @$*
12#' capital 0uilder fund faced crucial period during 8==A main reason was its
portfolio then mainly consisting of #M'" companies and in that year they
drastically came down.
Among these three funds highest 0eta is of #ranklin i.e =.4Alowest is of 12#'
capital builder fund and sharp ratio high in case of #ranklin and low in case of
12#''0 fund .
I'I'I Pru Power-s performance is more or less is stable even if we see its
0($AAlpha7harp ratio and average returns also good i.e 8.BA.
Average )eturn is high in case of 12#' '0 #und i.e 9.=5
#ranklin blueCchip fund once upon a time it was considered to be as star in mutual
funds but due to high market volatility in the year 8==A and 8==D but now from
8==B +anuary on words it could salvage some of its lost pride because of
comparatively low volatility in 0lue chip stocks
3=4
analysis

33=
analysis

SU00ESTI(/3REC(MME/DT(/ T( I/VEST(RS"
0y the study and analysis of the mutual fund industry it will be better to suggest that even
though mutual funds are subject to risk but they are better risk adjusted as compared with
stocks from last five years it has become a buzz word for investment main reason it is
useful in case of getting tax reductions etc.
If a person wants to earn more as compared to 0ank #2 where possible returns are just
3=C38E where as in mutual fund minimum is around 36C8=E mutual funds are good
option compared with stock market .
If person does not want to take much risk then he can invest in the funds like 12#'
'apital builder fund because as we have already seen in returns chart compared with
other two fundsF#ranklin blueCchip and I'I'I powerG.that it has given constant returns in
shorter period of time with less 0($A and arithmetic mean return is also high
If a person is more interested and ready to take risk then the #ranklin 0lueCchip fund will
the good option. 0y looking at its 0($A and 72 )isk both are high but if person invest in
this fund for more than 5 years he will get returns around 96E.
333
analysis

0enefits of the study/
$his study helps us to know the workings and concept of Mutual funds.
$his research helps to find how much return can earned by investing in Mutual
funds as compared with #2
It will also help to convince the others regarding how Mutual #unds re better risk
adjusted as compared with direct investment through shares.
And finally it has given Picture about how these three funds :#ranklin
0luechipI'I'I Pru power12#' capital builder; performing over last 36 years.
-imitations/ Main <imitation is that in this project we are only considering three
schemes of mutual funds and another limitation is data availability!collection is very
tedious.
338
analysis

339
analysis

#I#-I(0R*1!
www.mutualfundsindia.com
www.indiainfoline.com
www.valueresearcersonline.com
www.amfi.com
www.rediff.com
Reference $ooks
7('?)I$L A&A<L7I7 A&2 P*)$#*<I* MA&A"(M(&$
C 2onald #ischer
C Punithavathy.P
Reference Ma+aHine
C Mutual fund Insight
C *ut look Money.
335

Project Report On Different Schemes of Mutual Fund

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