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PROJECT REPORT
ON
A COMPARATIVE STUDY OF TATA MUTUAL FUND WITH ICICI AND
HDFC MUTUAL FUNDS
IN
TATA Asset Management Ltd
ABSTRACT
A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities. The income earned through
these investments and the capital appreciation realized is shared by its unit holders in
proportion to the number of units owned by them. Thus a Mutual Fund is the most
suitable investment for the common man as it offers an opportunity to invest in a
diversified, professionally managed basket of securities at a relatively low cost. The flow
chart below describes broadly the working of mutual funds.
Mutual fund is a mechanism for pooling the resources by issuing units to the investors
and investing funds in securities in accordance with objectives as disclosed in offer
document.
Investments in securities are spread across a wide cross-section of industries and sectors
and thus the risk is reduced. Diversification reduces the risk because all stocks may not
move in the same direction in the same proportion at the same time. Mutual fund issues
units to the investors in accordance with quantum of money invested by them. Investors
of mutual funds are known as unit holders.
CONTENTS
S.NO
CONTENTS
PAGENO
CHAPTER-I
1
INTRODUTION
OBJECTIVES OF THE STUDY
ADVANTAGES
SCOPE OF THE STUDY
RESEARCH & METHODS
MEANS OF DATA -COLLECTION
1-24
CHAPTER-II
25-43
COMPANY PROFILE
CHAPTER-III
44-47
REVIEW OF LITERATURE
CHAPTER-IV
48-78
DATA ANALYSIS & INTERPRETATION
CHAPTER-V
5
FINDING
SUGGESTIONS
CONCLUSION
79-81
CHAPTER-VI
6
82-82
BIBILOGRAPHY
CHAPTER-I
INTRODUTION
OBJECTIVES OF THE STUDY
NEEDS OF THE STUDY
SCOPE OF THE STUDY
RESEARCH & METHODS
INTRODUCTION
Many mutual funds in India are competing with one another. Every mutual fund
in India has its own fund schemes to cover their customer. It gives a healthy competition
and wealthy product to their customers. To cover the customer and mobilize the funds in
the market every mutual fund company or Asset Management Company comes with a
new scheme. A Mutual Fund is a TRUST that pools the savings of a number of investors
who share a common financial goal. The money thus collected is then invested in capital
market instruments such as shares, debentures and other securities. The income earned
through these investments and the capital appreciation realized is shared by its unit
holders in proportion to the number of units owned by them. Thus a Mutual Fund is the
most suitable investment for a common man as it offers an opportunity to invest in a
diversified, professionally managed basket of securities at a relatively low cost. The
flowchart
below
describes
broadly
the
working
of
Mutual
Funds.
Mutual fund is a mechanism for pooling the resources by issuing units to the
investors
in offer document.
The investors in proportion to their investments share the profits or losses. The
mutual funds normally come out with a number of schemes with different investment
objectives that are launched from time to time. A mutual fund is required to be registered
with Securities and Exchange Board of India (SEBI), which regulates securities markets
before it can collect funds from the public.
Different investment avenues are available to investors. Mutual funds also offer
good investment opportunities to the investors. Like all investments, they also carry
certain risks. The investors should compare the risks and expected yields after adjustment
of tax on various instruments while taking investment decisions.
TATA Mutual fund offering various funds that are in the category of equity, debt and
government securities. Of this total category, the researcher has giving, which funds are
doing better and which are giving high returns. The study also concentrated on the new
fund of the TATA Mutual Fund called SIP Fund.
CONCEPTS
Types of Mutual fund schemes
Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial
position, risk tolerance and return expectations etc. The table below gives an overview
into the existing types of schemes in the Industry.
By Structure
1. Open-Ended schemes
2. Close-Ended schemes
3. Interval scheme
1. Open-ended fund/schemes : An open - ended scheme is available for subscription
and repurchase on a continuous basis. These schemes do not have a fixed maturity period.
The key feature of open-ended scheme is liquidity.
2. Closed - ended fund/schemes
A close-ended scheme has a stipulated maturity period e.g.: 5-7 years. The fund is
open for subscription only during a specific period at the time of launch of scheme.
Investors can invest in the scheme at the time of the initial public issue and there after
they can buy or sell the units of the scheme on the Stock Exchanges where the units are
listed.
SCHEMES ACCORDING INVESTMENT OBJECTIVE
A scheme can also be classified as Growth Scheme, Income Scheme, and Balanced
Scheme considering its investment objective.
1. Growth scheme
The aim of growth scheme is to provide capital appreciation over the medium to
long term. Such schemes normally invest major part in equity and have high risks. It
provides different options to the investors like Divided option, Capital appreciation, etc,
and the investor may choose an option depending on their preferences. It is good for
investors having a long-term outlook seeking appreciation over a period of time.
2. Income scheme / Debt Funds
The aim of income scheme is to provide regular and steady income to investors.
Such schemes generally invest in fixed Income Securities such as Bonds, Corporate
Debentures, Government Securities and Money Market Instruments. Such funds are less
risky when compared to equity schemes.
3.
Balanced fund
The aim of balanced funds is to provide both growth and regular income as such
schemes invest both in equities and fixed income securities in the proportion indicated in
their offer document. These are appropriate for investors looking for moderate growth. It
is affected because of fluctuations in share prices in the stock market.
4. Liquid Fund
These funds are also income funds and their aim is to provide easy liquidity,
preservation of capital and moderate income. These schemes invest exclusively in safer
short-term instrument such as Treasury Bills, Certificate of Deposits, Commercial Paper
and Inter-Bank Call Money, Government Securities etc.
5. Gilt Fund
Sale Price
It is the price you pay when you invest in a scheme. Also called Offer Price. It may
include a sales load.
Repurchase Price
It is the price at which a close-ended scheme repurchases its units and it may
include a back-end load. This is also called Bid Price.
Redemption Price
It is the price at which open-ended schemes repurchase their units and close-ended
schemes redeem their units on maturity. Such prices are NAV related.
Sales Load
It is a charge collected by a scheme when it sells the units. Also called, Front-end
load. Schemes that do not charge a load are called No Load schemes.
MEAN: X
=
STANDARD DEVIATION:\
=
COVARIANCE:
=
BETA:
=
COVARIANCE
MARKET VARIANCE
ADVANTAGES OF MUTUALFUNDS:
The advantages of investing in a Mutual Fund are:
1.
Professional Management.
2.
Diversification.
3.
Convenient Administration.
4.
Return Potential.
5.
Low Costs.
6.
Liquidity.
7.
Transparency.
8.
Flexibility.
9.
Tax benefit.
10.
Well regulated.
The objective of the Scheme is to generate regular income and capital appreciation
through investment in debt and related securities. And this fund is conservative income
fund with exposure to high quality corporate debt.
TATA Monthly income fund
The objectives of the schemes is to generate a conservative managed open ended
monthly income fund with equity component not exceed with 10% of net assets.
TATA Floating Rate Fund
To generate income consistent with the prudent risk from a portfolio comprising
substantially of floating rate debt instruments, fixed rate debt instruments swapped for
floating rate return, and also fixed rate instruments and money market instruments.
TATA Liquidity Fund
The objective of the Scheme is to provide investors with a high level of income
from short-term investments. The Scheme will focus on preserving the investors capital
and liquidity. Investments will be made in money market and in investment grade debt
instruments.
Investment Objective
The investment objective of the scheme is to provide capital appreciation and/or
income in the form of dividend by investing predominantly in the equity and equity
related instruments of the companies within the market capitalization range of the
companies comprising CNX Nifty Junior Index. Of this, at least 51% will be invested in
the equity and equity related instruments of the companies that comprise the CNX Nifty
Junior Index. Up to 35% of net asset5s will be invested in the stocks of companies with
the market capitalization below Rs.2000 crore as on the date of investment.
Large Caps
Inherently
Stable Stocks
Mid Caps
Potential for
higher growth
BSE Sensex
CNX Nifty Junior is the select choice for large cap stocks.
Quite a few stocks have been promoted from Nifty junior to Nifty from time to
time.
Investment options:
1. Growth option
2. Dividend option
Pay-out
Re-investment
1. Growth option
Under this option, ordinarily no dividend shall be declared. All income earned and
profits realized in respect of a Unit issued under the option will continue to remain
invested until repurchase and shall be deemed to have remained invested in the option
itself, which will be reflected in the NAV.
2. Dividend option
Under this option, the income and profits realized will distribute by way of
dividend. The undistributed portion of the income will remain in the option and be
reflected in the NAV, on an ongoing basis. Under the Reinvestment facility, the dividend
will be automatically reinvested in the units of the Scheme. Under the Payout facility, the
dividends so declared/distributed would be paid out to the unit holders.
Liquidity
Facility to move from/to other open ended Schemes of the fund and inters se
between Growth option and Dividend option.
Transparency
This program allows unit holders to save a fixed amount of rupees every
Investment Pattern
Type of Instrument
(a)
Equity
and
equity
related
Min. % of
Max. % of
Risk Profile
Net Assets
65%
Net Assets
100%
High
51%
100%
High
0%
35%
High
0%
30%
Low to Medium
the
market
(c)
(d)
date of investment
Money Market Instruments
meant for investors who are novices in their own right and wish to enter the
myriad world of investments. These come in handy for there is every possibility
of losing what one has if due care is not taken.
1. Assess yourself
Self-assessment of ones needs; expectations and risk profile is of prime
importance failing which; one will make more mistakes in putting money in
right places than otherwise. One should identify the degree of risk bearing
capacity one has and also clearly state the expectations from the investments.
Irrational expectations will only bring pain.
One first has to decide what he wants the money for and it is this
investment goal that should be the guiding light for all investments done. It is
thus important to know the risks associated with the fund and align it With the
quantum of risk one is willing to take. One should take a look at the portfolio
of the funds for the purpose. Excessive exposure to any specific sector should
be avoided, as it will only add to the risk of the entire portfolio. Mutual funds
invest with a certain ideology such as the "Value Principle" or "Growth
Philosophy". Both have their share of critics but both philosophies work for
investors of different kinds. Identifying the proposed investment philosophy of
the fund will give an insight into the kind of risks that it shall be taking in
future.
5. Be regular
Investing should be a habit and not an exercise undertaken at ones
wishes, if one has to really benefit from them. As we said earlier, since it is
extremely difficult to know when to enter or exit the market, it is important to
beat the market by being systematic. The basic philosophy of Rupee cost
averaging would suggest that if one invests regularly through the ups and
downs of the market, he would stand a better chance of generating more returns
than the market for the entire duration. The SIPs (Systematic Investment Plans)
offered by all funds helps in being systematic. All that one needs to do is to
give post-dated cheques to the fund and thereafter one will not be harried later.
The Automatic investment Plans offered by some funds goes a step further, as
Do your homework
It is important for all investors to research the avenues available to them irrespective of
the investor category they belong to. This is important because an informed investor is in
a better decision to make right decisions. Having identified the risks associated with the
investment is important and so one should try to know all aspects associated with it.
Asking the intermediaries is one of the ways to take care of the problem.
People who do not remember to follow these rules diligently, as people are
likely to commit mistakes by being ignorant or adventurous enough to take
risks more than what they can absorb. This is the reason why people would do
well to remember these rules before they set out to invest their hard-earned
money.
RESEARCH METHODOLOGY
Comparative analysis of the existing funds in the TATA Mutual Funds by assessing the
performance, features, risk and returns and direct interaction with the Individual
customers of TATA Mutual fund, Distributors and Individual Institutions.
Research objectives
Primary objective:
To study the performance TATA MUTUALFUND in comparison with HDFC and ICICI
PRUDENTIAL MUTUALFUNDS.
Secondary objective:
To know the performance and features of various schemes of the TATA Mutual
Funds.
Research design
Descriptive Research
It is well structured.
It is more economical.
Sources of data
Primary data:
The primary data are collected from the company
Secondary data:
The secondary data are collected from the Individual customers of TATA Mutual
fund,
Research Instrument:
The data are collected from the completed Offer Document, Fact Sheets,
Application, which talks about the new scheme and Internet.
aspects.
The study is limited only to be the analysis of different schemes and its suitability
to different investors according to their risk-taking ability.
The study is based on secondary data available from monthly fact sheets, web
sites, offer documents, magazines and newspapers etc. as primary data was not
accessible.
CHAPTER-II
COMPANY PROFILE
COMPANY PROFILE
Tata Asset Management Limited, having Rs. 38741.01 crores (as on February 24,
2010) of assets under management. At Tata Asset Management Ltd., we are committed to
providing you with consistent investment performance, world-class service and a
comprehensive product range to take care of all your investment requirements. They offer
a wide range of investment products for institutional and individual investors. So,
whoever you are and whatever your investments needs are, they will provide you with the
optimal investment solution.
The Tata Asset Management philosophy is centered on seeking consistent, longterm results. When you choose to invest with Tata Mutual Fund, you get the benefits of
financial planning.
Tata Asset Management aims at overall excellence, within the framework of
transparent and rigorous risk controls. They constantly benchmark our efforts against
these tenets of performance.
Consistency
We consistently strive to deliver results through our value based investing
methodology, keeping alive the belief of the late doyen of the Tata Group, Mr. JRD Tata,
that money received from the people should go back to them several times over.
Flexibility
Tata Mutual Fund offers investors a broad range of managed investment products
in various asset classes and risk parameters, within operational flexibility to suit their
varied investment needs.
Stability
Our commitment to the highest quality of service and integrity are the foundation upon
which clients can build their trust with us.
Service
We offer a wide range of services to assist the investor in his financial planning
experience with us. Our services are designed keeping the needs of our investors in focus,
affording them a smooth and hassle free financial planning process.
Integrity:
We must conduct our business fairly, with honesty and transparency. Everything
we do must stand the test of public scrutiny.
Understanding:
We must be caring, show respect, compassion and humanity for our colleagues
and customers around the world, and always work for the benefit of the communities we
serve.
Excellence:
We must constantly strive to achieve the highest possible standards in our day-today work and in the quality of the goods and services we provide services.
Unity:
We must work cohesively with our colleagues across the Group and with our
customers and partners around the world, building strong relationships based on
tolerance, understanding and mutual cooperation.
Responsibility:
We must continue to be responsible, sensitive to the countries, communities and
environments in which we work, always ensuring that what comes from the people goes
back to the people many times over.
Products:
At Tata Asset Management Company, they believe that your investment needs
depend on personal and financial goals. Identifying your financial goals is the key to
achieving the big things in your life, be it your child's education or a carefree and
comfortable retired life.
After identifying and defining your financial goals, you now need to plan for each of
them in an organized and a professional way. Investment experts around the world advise
instruments like equity funds and stocks for long-term (more than 5 years), income funds
for medium-term and liquid funds for short-term needs.
The investment matrix here depicts the entire available variety of investment options.
Those at the top provide for a greater opportunity for long-term capital growth while
those at the bottom take care of current income and preservation of capital. Tata Mutual
Fund offers a wide range of funds for different investment instruments designed to cater
to your individual profile and life-stage.
Equity Products
Tata Pure Equity Fund (TPEF)
Tata Tax Saving Fund (TTSF)
Tata Select Equity Fund (TSEF)
Tata Life Sciences & Technology Fund (TLSTF)
Tata Equity Opportunities Fund (TEOF)
Tata Index Fund (TIXF)
Tata Growth Fund (TGF)
Tata Equity P/E Fund (TEPEF)
Tata Dividend Yield Fund (TDYF)
Tata Infrastructure Fund (TIF)
Tata Service Industries Fund (TSIF)
Tata Mid Cap Fund (TMCF)
Tata Contra Fund (TCF)
Tata Tax Advantage Fund 1
Tata Equity Management Fund
Tata Capital Builder Fund
Balanced Products
Tata Balanced Fund (TBF)
Tata Young Citizens' Fund (TYCF)
Debt Products
Tata Short Term Bond Fund (TSTBF)
Tata Gilt Securities Fund (TGSF)
Tata Income Fund (TIF)
Tata Income Plus Fund (TIPF)
Tata Fixed Horizon Fund
Tata Fixed Horizon Fund Series 1
Tata Fixed Horizon Fund Series 2
Tata Fixed Horizon Fund Series 3
Tata Fixed Horizon Fund Series 5
Tata Fixed Horizon Fund Series 6
Tata Fixed Horizon Fund Series 7
Tata Fixed Horizon Fund Series 8
Tata Fixed Horizon Fund Series 9
Tata Monthly Income Fund (TMIF)
Tata Dynamic Bond Fund (TDBF)
Tata Floating Rate Fund (TFRF)
Tata Liquid Fund (TLF)
Tata MIP Plus Fund (TMPF)
Close-Ended Fund/Scheme
A Close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The
fund is open for subscription only during a specified period at the time of launch of the
scheme. Investors can invest in the scheme at the time of the initial public issue and
thereafter they can buy or sell the units of the scheme on the stock exchanges where the
units are listed. In order to provide an exit route to the investors, some close-ended funds
give an option of selling back the units to the mutual fund through periodic repurchase at
NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is
provided to the investor i.e. either repurchase facility or through listing on stock
exchanges. These mutual funds schemes disclose NAV generally on weekly basis.
investments such as equity funds and stocks are a good choice for long term needs (five
years or more), income funds for medium-term needs and liquid funds for short-term
requirements.
A scheme can also be classified as growth scheme, income scheme, or balanced
scheme considering its investment objective. Such schemes may be open-ended or closeended schemes as described earlier. Such schemes may be classified mainly as follows:
Other Schemes:
Guilt Funds
These funds invest exclusively in government securities. Government securities have
no default risk. NAVs of these schemes also fluctuate due to change in interest rates and
other economic factors as is the case with income or debt oriented schemes.
Index Funds
Index funds replicate the portfolio of a particular index such as the BSE Sensitive
index, S&P NSE 50 index (Nifty), etc. These schemes invest in the securities in the same
weight age comprising of an index. NAVs of such schemes would rise or fall in
accordance with the rise or fall in the index, though not exactly by the same percentage
due to some factors known as tracking error in technical terms. Necessary disclosures
in this regard are made in the offer document of the mutual fund scheme.
There are also exchange traded index funds launched by the mutual funds which
are traded on the stock exchanges.
Leveraged Funds
Leveraged Funds or borrowed funds are used in order to increase the size of the value
of the portfolio and benefit the shareholders by gains exceeding the cost of the
borrowed funds. Such funds are used in speculative and risky investments like short
sale to take advantage of declining market to realize gains in the portfolio short sales.
Loads
Dont look at these as a burden; just think of them as tolls you pay on the highway to big
money.
Recurring Expenses
Apart from Loads mutual funds also charge some other expenses, such as:
As the name suggests, this is meant to remunerate the asset management company for
managing the investors money.
Trustees Fees
These are fees payable to the trustees for managing the trust.
Custodian Fees
These are paid by the fund to its custodians, the organization which handles the
possessing of the securities invested in by the fund.
Types of Risks
Market Risk:
There are times when the price of securities in a particular market rise or fall due to
acertain outside influencing factors. This could affect large as well as small
businesses.
Inflation Risk:
Very often investors that follows the conservative approach consider those
investments that seek to preserve their capital. These types of investments however
may not protect against inflation. Inflation is nothing but loss of purchasing power.
When inflation grows faster than earnings on an investment, one may be able to buy
less. One is exposed to inflation risks when prices rise faster than ones income.
Credit Risk:
The ability of a company to repay investors money or to make interest payments
determines the credit risk that investors face.
CHAPTER-III
REVIEW OF LITERATURE
REVIEW OF LITERATURE
TITLE: MUTUAL FUND AND TAXATION
Authors Dr. Somesh kumar shukla
Dr. Shobhit
The paper tries to analyze tax benefits issues with respect to mutual fund from the
point of view of companies and investors.
To day there are around 34 mutual funds with approximately 500 products
classified under a dozen generic heads. The total invest able funds of the industry grew
from Rs 24 crore in 1994 to more than Rs 1,20,000 crore in 2002 here on effort is being
made to study the various tax aspects relating to mutual funds in India.
It is known that tax rate for long term capital gains is lower than Tax on
dividends. Some funds operating pure equity growth schemes have been declaring annual
dividends; we should be distributed as capital appreciation, consequently put investors to
great disadvantage.
Further it is also advisable that, their should be exemption from tax on dividends
as to avoid double taxation, steps should be also taken to make mutual fund an ideal
investors. Vehicle as mutual fund promote growth, along with capital appreciation which
in turn helps in the development of the economy.
A mutual fund has been conferred total tax exemption from income tax on
all its income provided it is a recognized fund. i.e. SEBI Act 1993.
The income received by the investors of mutual fund is taxable in their
hand as dividend unless these are capital redemption.
Payment against investment made in units of any mutual fund specified
U/S 10(23D).of the income tax Act 1961.
Payment against investment in units of UTI.
Income distribution from mutual funds is not free from TDS Provisions. A
mutual fund has to deduct TDS where the income distribution exceeds Rs.
2500 in a financial year.
CHAPTER-IV
DATA ANALYSIS & INTERPRETATION
MINIMUM
INVESTMENT
INFERENCE
Most
of
the
minimum investment
related
tax
to
saving
equityfunds
FUNDS
TEOF
TPEF
TSEF
TLSTF
TTSF
TGF
TEPEF
TISF
TIXF
TBF
TYCF
TLF
TCF
TFRF
(In Rs.)
5000
5000
5000
500
5000
5000
5000
5000
5000
5000
500
10000
5000
10000
minimum investment since they are saving the tax under the section 80C (2) of the
Income Tax Act 1961.
CHART 1
THE MINIMUM INVESTMENTS OF THE FUNDS (IN Rs.)
TABLE 2
ASSETS UNDER MANAGEMENT OF VARIOUS FUNDS AS ON JANUARY 2013
ASSETS UNDER
MANAGEMENT
INFERENCE
In equity
TATA MUTUAL
well as it assets
is Rs.1243880 lacs.
performing well as
management is
FUNDS
TEOF
TPEF
TSEF
TLSTF
TTSF
TGF
TEPEF
TISF
TIXF
TBF
TYCF
TLF
TCF
TFRF
(In Lacs)
31822.92
19937.9
7684.84
2747.53
14985.05
11071.19
7873.29
97195.49
502.21
10721.84
16469.66
358764.49
8207.07
257450.06
diversified fund,
FUND is performing
under management
The debt funds are
its asset under
showing. This
shows, in overall assets under management Liquid Option fund is doing well.
CHART 2
ASSETS UNDER MANAGEMENT OF VARIOUS FUNDS AS ON JANUARY
2013(IN Rs.)
TABLE 3
THE CATEGORY OF THE FUNDS
10
11
12
Funds
Tata balanced fund
HDFC balanced fund
ICICI prudential balanced fund
Tata Index fund-nifty A
HDFC index nifty plan
ICICI Prudential Index fund
Tata tax saving fund
HDFC tax saver
ICICI Prudential tax plan
Tata growth fund
HDFC Growth fund
ICICI Prudential growth plan
Tata gilt securities fund
HDFC gilt long term plan
ICICI Prudential gilt invt plan
Tata contra fund
HDFC premier multicap fund
ICICI Prudential blended plan-B
Tata monthly income fund
HDFC monthly income plan short term
ICICI Prudential monthly income plan
Tata income fund
HDFC income fund
ICICI Prudential income plan
Tata liquid fund
HDFC liquid fund
ICICI Prudential liquid fund
Tata young citizens fund
HDFC childrens gift investment plan
ICICI Prudential child care study plan
Tata floating rate fund-sh inst
HDFC floating rate income short term plan
ICICI Prudential LT floating rate-A
Tata short term bond fund
HDFC short term plan
ICICI Prudential short term plan
Category of Funds
Equity and Debt
Equity and Debt
Equity and Debt
Equity Diversified
Equity Diversified
Equity Diversified
Equity Diversified
Equity Diversified
Equity Diversified
Equity Diversified
Equity Diversified
Equity Diversified
Gilt
Gilt
Gilt
Equity Diversified
Equity Diversified
Debt
Equity and Debt
Equity and Debt
Equity and Debt
Debt
Debt
Debt
Debt
Debt
Debt
Equity and Debt
Equity and Debt
Equity and Debt
Debt
Debt
Debt
Debt
Debt
Debt
CHART 3
THE CATEGORY OF THE FUNDS
1
4
1
2
1
08
6
4
2
0
Eq
uit
D
y
eb
Equit
tD
y and
eb
G
t
ilt
Category
of Funds
INFERENCE:
By observing above table and chart we can say that most funds of the asset management
company are invested in equity diversification. Next to the debt funds and after the
management is invest the money in the equity related funds and very less in guilt funds.
TABLE 4
1 YEAR RETURNS OF TATA, HDFC AND ICICI MUTUAL FUNDS (IN %) AS
ON 27 JANUARY 201\3
NO
1
10
11
12
Fund Name
Tata balanced fund
HDFC balanced fund
ICICI prudential balanced fund
Tata Index fund-nifty A
HDFC index nifty plan
ICICI Prudential Index fund
Tata tax saving fund
HDFC tax saver
ICICI Prudential tax plan
Tata growth fund
HDFC Growth fund
ICICI Prudential growth plan
Tata gilt securities fund
HDFC gilt long term plan
ICICI Prudential gilt invt plan
Tata contra fund
HDFC premier multicap fund
ICICI Prudential blended plan-B
Tata monthly income fund
HDFC monthly income plan short term
ICICI Prudential monthly income plan
Tata income fund
HDFC income fund
ICICI Prudential income plan
Tata liquid fund
HDFC liquid fund
ICICI Prudential liquid fund
Tata young citizens fund
HDFC childrens gift investment plan
ICICI Prudential child care study plan
Tata floating rate fund-sh inst
HDFC floating rate income short term plan
ICICI Prudential LT floating rate-A
Tata short term bond fund
HDFC short term plan
ICICI Prudential short term plan
1 YR RETURNS
31.12
13.41
18.29
25.58
25.02
28.01
24.33
25.80
5.85
36.74
39.85
25.50
6.01
4.67
10.11
7.01
27.70
8.43
8.32
6.46
9.42
6.32
4.99
7.71
7.64
7.60
7.63
19.29
17.53
14.66
8.10
7.87
7.44
9.39
7.83
8.51
CHART 4
1 YEAR RETURNS OF TATA, HDFC AND ICICI MUTUAL FUND
TABLE 5
3 YEAR RETURNS OF TATA, HDFC AND ICICI MUTUAL FUND (IN %) AS
ON 27 JANUARY 2013
NO Fund Name
1
10
11
12
3 YR
RETURNS
35.75
24.79
31.34
42.22
37.70
41.65
37.19
51.61
43.22
39.54
45.84
45.04
3.28
2.88
5.96
Nil
Nil
Nil
7.13
8.50
10.49
6.18
3.62
5.16
6.12
6.24
6.14
23.20
25.84
13.80
Nil
6.39
Nil
7.05
6.10
6.90
CHART 5
3 YEAR RETURNS OF TATA, HDFC AND ICICI MUTUAL FUND
TABLE 6
5 YEAR RETURNS OF TATA, HDFC AND ICICI MUTUAL FUNDS (IN %) AS
ON 27 JANUARY 2013
NO
1
10
11
12
Fund Name
Tata balanced fund
HDFC balanced fund
ICICI prudential balanced fund
Tata Index fund-nifty A
HDFC index nifty plan
ICICI Prudential Index fund
Tata tax saving fund
HDFC tax saver
ICICI Prudential tax plan
Tata growth fund
HDFC Growth fund
ICICI Prudential growth plan
Tata gilt securities fund
HDFC gilt long term plan
ICICI Prudential gilt invt plan
Tata contra fund
HDFC premier multicap fund
ICICI Prudential blended plan-B
Tata monthly income fund
HDFC monthly income plan short term
ICICI Prudential monthly income plan
Tata income fund
HDFC income fund
ICICI Prudential income plan
Tata liquid fund
HDFC liquid fund
ICICI Prudential liquid fund
Tata young citizens fund
HDFC childrens gift investment plan
ICICI Prudential child care study plan
Tata floating rate fund-sh inst
HDFC floating rate income short term
plan
ICICI Prudential LT floating rate-A
Tata short term bond fund
5 YR
RETURNS
35.66
25.77
31.61
Nil
33.08
35.55
43.22
53.45
49.60
41.94
46.55
41.06
6.52
5.50
7.20
Nil
Nil
Nil
9.25
Nil
10.10
6.24
5.27
5.90
5.77
5.73
5.72
24.20
24.74
13.71
Nil
Nil
Nil
6.76
CHART 6
5-YEAR RETURNS OF TATA, HDFC AND ICICI MUTUAL FUND
INFERENCE:
By observing 1, 3 and 5 year returns of TATA, HDFC, ICICI mutual funds we can
say that in 12 schemes, which are selected, TATA is doing well in 5 schemes rather than
HDFC and ICICI. The schemes are TATA Balanced Fund, Tata Liquid Fund, Tata Young
Citizens Fund, Tata floating Rate Fund and Tata short Term Bond Fund.
HDFC is doing well in 3 schemes they are HDFC Tax Saver, HDFC Growth Fund,
and HDFC Premier MultiCap Fund.
ICICI is doing well in 4 schemes. They are ICICI Index Fund, ICICI GILT securities Fund, ICICI Monthly Income Plan and
ICICI Income Fund.
If we see over all performance of all funds we can say TATA is doing well.
Investors will consider the returns and risk primarily for investing. We can say
The returns of TATA are extremely good by observing above tables and charts.
Tata is also performing well in other schemes, which are mentioned below.
TABLE 7
ONE-YEAR RETURN OF OTHER SCHEMES OF TATA MUTUAL FUND (IN %)
No.
Fund name
1 year returns
1
2
3
4
46.56
34.21
43.24
17.21
5
6
7
fund
Tata pure equity fund
Tata select equity fund
Tata service industries fund
31.33
38.25
34.71
CHART 7
-YEAR RETURN OF OTHER SCHEMES OF TATA MUTUAL FUND (in %)
INFERENCE:
As shown in the above table TATA is doing well in other schemes also like TISF, TEOF,
TEPEF, TLSTF, TPEF, TSEF, and TSIF.
All of them Tata Infrastructure Fund is doing extremely well.
TABLE 8
RISK GRADE OF THE FUNDS
5-High
4-Above average
3-Average
1-Low
2-below average
No
1
2
3
4
5
6
7
8
9
10
11
12
Fund name
Tata balanced fund
HDFC balanced fund
ICICI prudential balanced fund
Tata Index fund-nifty A
HDFC index nifty plan
ICICI Prudential Index fund
Tata tax saving fund
HDFC tax saver
ICICI Prudential tax plan
Tata growth fund
HDFC Growth fund
ICICI Prudential growth plan
Tata gilt securities fund
HDFC gilt long term plan
ICICI Prudential gilt invt plan
Tata contra fund
HDFC premier multicap fund
ICICI Prudential blended plan-B
Tata monthly income fund
HDFC monthly income plan short term
ICICI Prudential monthly income plan
Tata income fund
HDFC income fund
ICICI Prudential income plan
Tata liquid fund
HDFC liquid fund
ICICI Prudential liquid fund
Tata young citizens fund
HDFC childrens gift investment plan
ICICI Prudential child care study plan
Tata floating rate fund-sh inst
HDFC floating rate income short term plan
ICICI Prudential LT floating rate-A
Tata short term bond fund
HDFC short term plan
ICICI Prudential short term plan
Risk grade
3
4
3
3
3
4
3
1
4
4
2
3
4
4
4
Not rated
Not rated
Not rated
2
3
3
3
5
5
1
3
3
4
3
3
2
3
2
2
3
2
CHART 8
THE RISK GRADE OF THE FUNDS
INFERENCE
HDFC BALANCED FUND, ICICI PRUDENTIAL INDEX FUND, TATA GROWTH FUND,
TATA GILT SECURITIES FUND, HDFC GILT LONG TERM PLAN, ICICI PRUDENTIAL
GILT INVT PLAN,
TATA YOUNG CITIZENS FUNDS are having risk above average Tata balanced
fund, ICICI prudential balanced fund, Tata Index fund-nifty A, Hdfc index nifty plan,
Tata tax saving fund, ICICI Prudential growth plan, Hdfc monthly income plan short
term, ICICI Prudential monthly income plan, Tata income fund, Hdfc liquid fund, ICICI
Prudential liquid fund, Hdfc childrens gift investment plan, ICICI Prudential child care
study plan, Hdfc floating rate income short term plan, Hdfc short term plan. These plans
are having avg risk and others are having below avg and low risk.
By observing above table we can say that HDFC INCOME FUND, ICICI
PRUDENTIAL INCOME FUND have high risk.
TABLE 9
NAVS OF FUNDS AS ON 27 JANUARY 2013
no
1
10
11
12
Fund Name
Tata balanced fund
HDFC balanced fund
ICICI prudential balanced plan
Tata Index fund-nifty A
HDFC index fund- nifty plan
ICICI Prudential Index fund
Tata tax saving fund
HDFC tax saver
ICICI Prudential tax plan
Tata growth fund
HDFC Growth fund
ICICI Prudential growth plan
Tata gilt securities fund
HDFC gilt long term plan
ICICI Prudential gilt fund-invt
Tata contra fund
HDFC premier multicap fund
ICICI Prudential blended plan-B
Tata monthly income fund
HDFC mf monthly income plan short term
ICICI Prudential monthly income plan
Tata income fund
HDFC income fund
ICICI Prudential income plan
Tata liquid fund (retail invt plan)
HDFC liquid fund
ICICI Prudential liquid fund
Tata young citizens fund
HDFC childrens gift fund-investment
ICICI Prudential child care study plan
Tata floating rate fund-sh inst
HDFC Floating Rate Income Fund-Short Term Plan
ICICI Prudential LT floating rate-A
Tata short term bond fund
HDFC short term plan
ICICI Prudential short term plan
navs
55.86
32.17
35.89
26.57
41.54
38.67
46.13
156.61
90.51
35.65
56.39
100.29
23.76
16.01
23.41
11.47
20.17
11.72
15.13
13.27
19.71
25.81
17.20
22.43
1788.93
15.34
18.95
23.73
26.84
20.87
12.10
13.02
11.89
13.93
13.92
14.83
CHART 9
THE NAVS HISTORY OF THE FUNDS
INFERENCE:
The NAVS detail shown in the table is value of the asset under the particular
scheme.
TABLE 10
RISK ANALYSIS OF SCHMES
N
O
1
1
0
FUND NAME
Tata balanced fund
HDFC balanced fund
ICICI prudential balanced plan
Tata Index fund-nifty A
HDFC index fund- nifty plan
ICICI Prudential Index fund
Tata tax saving fund
HDFC tax saver
ICICI Prudential tax plan
Tata growth fund
HDFC Growth fund
ICICI Prudential growth plan
Tata gilt securities fund
HDFC gilt long term plan
ICICI Prudential gilt fund-invt
Tata contra fund
HDFC premier multicap fund
ICICI Prudential blended plan-B
Tata monthly income fund
HDFC mf monthly income plan short
term
ICICI Prudential monthly income plan
Tata income fund
HDFC income fund
ICICI Prudential income plan
Tata liquid fund (retail invt plan)
HDFC liquid fund
ICICI Prudential liquid fund
Tata young citizens fund
SD
Beta
Expense ratio
4.36
3.99
4.11
5.75
5.34
5.62
6.14
6.20
7.27
6.19
5.73
5.86
0.31
0.28
0.41
Nil
Nil
0.13
0.37
0.53
1.02
1.00
1.03
1.01
0.94
0.99
0.87
0.93
0.93
0.84
0.90
0.99
0.45
0.42
0.60
Nil
Nil
Nil
0.23
0.19
%
2.32
2.21
2.18
1.44
1.50
1.25
2.45
2.14
2.22
2.44
2.32
2.30
1.60
1.60
1.15
2.15
2.09
1.50
2.00
2.07
0.52
0.17
0.26
0.32
0.02
0.02
0.02
2.87
0.23
0.12
0.25
0.35
Nil
Nil
Nil
0.64
1.94
2.16
2.11
2.06
0.21
0.34
0.90
2.32
3.78
1.69
0.02
0.02
0.94
0.42
0.11
0.12
2.21
1.50
Nil
0.24
0.02
0.03
1.25
1
2
0.08
Nil
0.79
0.08
0.07
Nil
Nil
0.50
1.10
STANDARD DEVIATION
Standard deviation is measure of the dispersion of a set of data from its mean. The
more spread apart the data is, the higher the deviation. In finance, standard deviation is
applied to the annual rate of return of an investment to measure the investment's volatility
(risk).
A volatile stock would have a high standard deviation. In mutual funds, the standard
deviation tells us how much the return on the fund is deviating from the expected normal
returns.
BETA:
A measure of the volatility, or systematic risk, of a security or a portfolio in
comparison to the market as a whole. It is also known as "beta coefficient".
Beta is calculated using regression analysis, and you can think of beta as the tendency
of a security's returns to respond to swings in the market. A beta of 1 indicates that the
security's price will move with the market. A beta of less than 1 means that the security
will be less volatile than the market. A beta of greater than 1 indicates that the security's
price will be more volatile than the market.
EXPENCE RATIO:
A measure of what it costs an investment company to operate a mutual fund. An
expense ratio is determined through an annual calculation, where a fund's operating
expenses are divided by the average dollar value of its assets under management.
Operating expenses are taken out of a fund's assets and lower the return to a fund's
investors. Also known as "management expense ratio" (MER).
Fund operating expenses vary widely depending on the type of fund. The largest
component of operating expense is the fee paid to a fund's investment Manager/advisor.
Other costs include recordkeeping, custodial services, taxes, legal expenses, and
accounting and auditing fees. Curiously, a fund's trading activity - the buying and selling
of portfolio securities - is not included in the calculation of the expense ratio.
INFERENCE:
In all the above funds in most of the cases the beta is less than one, which is good
indicator as the beta is non- diversifiable risk. TATA is performing quietly well as it bears
the lower risk and gives more returns. HDFC and ICICI also bear the considerable
portion of risk in accordance with the market. But few schemes like TATA balanced fund
the beta is more than 1, but its returns are also high compared with other companies.
Standard deviation measures the dispersion around the expected value. It can be
diversified, as it is the firm specific risk.
CHAPTER-V
FINDING
SUGGESTIONS
CONCLUSION
FINDINGS
By considering the returns, risk grades, beta and others we can conclude the following
things
The assets under management show that most of the investors prefer the equity funds
because the one-year returns of the funds are also better in equity-oriented
fund.
The risks and returns depend upon the performance of the stock market.
The government securities give less return, as the risk is low.
When we look at the returns of various schemes of TATA, HDFC and ICICI, TATA is
performing well, compared with other companies.
People are willing to take risk as they get returns that are well accomplished by
TATA, considering TATA-balanced fund.
TATA also offers various schemes which contain high, medium and low risk
According to the expense ratio of TATA is also low when compared to others
TATA offers all types of schemes like equity, debt, and liquid.
TATA MUTUAL FUND provides prompt services to the customer and keeps
customer happy.
If the customer wants to know about the products, the structure of the web site also
very helpful to the customer.
For easy understanding of TATA MUTUAL FUND schemes, TATA has separate wed
site www.tatamutualfund.com. It enables customers to understand easily.
Easy documentation.
SUGGESSTIONS
CONCLUSION
TATA Mutual Fund Company is involved in the field of Mutual fund
industry from 1982. This particular company is doing well in the market, as it
is the sponsor and trustee of TATA TRUSTEE COMPANY PRIVATE LIMITED.
It funds are giving better return to its investor. This study reveals the past
performance of the funds.
An analysis has been made by way of using different charts and tables.
On the basis of the analysis findings are drawn, in order to give suitable
feedback to TATA Mutual Fund Company. The analysis its resultant findings
and suggestions made through this study may give benefit to TATA Mutual
Fund Company.
The study is very useful for me to study the mutual fund industry and TATA
Mutual Funds schemes.
I hope that with the help of this experience makes me to develop in the practical world. It
is giving more confidence to me and gaining the knowledge about the products and
various functional areas in the company. These funds are going get better
performance in the market if things have to going well.
CHAPTER-VI
BIOLOGRAPHY
BIBLIOGRAPHY
Books:
Amfi workbook
----- D.C.Anjoria
Research Methodology
Newspaper:
Business standard
Business line
The Economic Times
Websites :
www.amfiindia.com
www.tatamutualfund.com
www.valueresearchonline.com
Fact sheet January & February 2011
Offer Document of TATA MUTUAL FUND
----- K.L.Kothari