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A

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

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.

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

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 in the case with income or debt oriented schemes.
6. Sector Specific Funds / schemes
These are the funds/ schemes, which invest in the securities of only those sectors or
industries as specified in the offer document. E.g., Pharmaceuticals, Software, Fast
Moving Consumer Goods (FMCG) etc. While these funds may give higher returns, they
are more risky compared to diversified funds.
7. Tax saving schemes
These schemes offer tax rebates to the investors under specific provision of the
Income Tax Act, 1961 as the government offers tax incentives for investment in specified
avenues e.g. Equity Linked Saving Scheme (ELSS).

Frequently Used Terms


Net Asset Value
Net Asset Value is the market value of the assets of the scheme minus its liabilities. Per
unit NAV is the net asset value of the scheme divided by the number of units outstanding
on the Valuation Date.

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.

Repurchase or Back-End Load


Its a charge collected by a scheme when it buys back the units from
the unit holders.
CHOOSING A SCHEME
The investor must read the offer document of the mutual fund schemes very
carefully. They may also look into the past track record of performance of the schemes or
other schemes of the same MF. They may also compare the performance with other
schemes having similar investment objectives. Though past performance of a scheme is
not an indicator of its future performance and good performance in the past may or may
not be sustained in the future, this is one of the important factors for making investment
decision.
The following tools are used to calculate the Return, Mean, Standard deviation,
Covariance and the Beta.
RETURN (R)
=

End value beginning value


Beginning value

MEAN: X
=

Sum of all values


No. Of values

STANDARD DEVIATION:\
=

Square root of {sum of (X -x)} N

COVARIANCE:
=

SUM OF (RX-RX) (RY-RY) N

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.

INVESTMENT OBJECTIVE IN TATA MUTUAL FUNDS


TATA Equity Opportunity Fund
The objective is to focus on capitalizing on opportunities offered by equity market
from time to time with a proactive fund management strategy.
TATA Select Equity Fund
The investment objective of the scheme would be to provide capital appreciation
and / or dividend distribution by investing predominantly in a well-diversified portfolio
of companies that have a relatively high dividend yield.
TATA Pure Equity Fund
To generate long term capital appreciation by investing in equity and equity
related securities of Indian companies that are perceived to be potential growth stories.
TATA Infrastructure Fund
To generate long term capital appreciation in investing predominantly in
companies with potential long term value from expected investments in Infrastructure
oriented sectors.
TATA Growth Fund
The investment objective of the scheme would be to provide capital appreciation
and / or dividend distribution by investing in companies from a maximum of six sectors,
depending upon their growth prospects and valuation at any given point in time.

TATA Tax Savings Fund


The objective of the Scheme is to build a high quality growth oriented portfolio to
provide to long-term capital gains to the investors. The Scheme aims at providing return
through capital appreciation over the life of the Scheme.
TATA Balanced Fund
The objective is to provide periodic returns and capital appreciation through a
judicious mix of equity and debt instruments, while simultaneously aiming to minimize
capital erosion.
TATA Young Citizen Fund
The objective of the Scheme is to aim at helping parents/guardians/well wishers to
save for financial needs of growing childrens and aim of giving lump sum capital growth
to the beneficiary at the end of the chosen target period.
TATA Life Sciences and Technology Fund
The objective of this fund is to invest in fast growing; intellectual property driven new
economy sectors which having the potential of creating long term values.
TATA Index Fund
The objective is to invest in securities that comprise S&P CNX Nifty in the same
proportion so as to attain results commensurate with the Nifty.

TATA Equity P/E Fund


This particular fund invests in at least 70% of its net assets in stocks with P/E
ratio is less than of the BSE Sensex.
TATA Income Fund

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.

TATA Gilt Securities Fund


The generate risk free return and provide medium to long term capital gains and
income distribution to its unit holders while at all times and emphasizing the capital
reservation.
TATA Contra Fund
To provide income distribution and /or medium to long term capital gains while at
all times emphasizing the importance of capital appreciation.

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

From this Segment,


Get the stocks with
higher growth potential

Mid Caps

Potential for
higher growth

From this Segment,


Get the stocks with
higher stability

For Large Caps representative Indices are

BSE Sensex

S&P CNX Nifty

CNX Nifty Junior

CNX Nifty Junior is the select choice for large cap stocks.

CNX Nifty Junior Index

It is an index made up of 50 stocks after S&P CNX Nifty.

Stocks are filtered for liquidity.

Represents the next rung of 50 liquid stocks after Nifty.

Nifty and Nifty Junior are disjoint sets.

Quite a few stocks have been promoted from Nifty junior to Nifty from time to
time.

Mid Cap Stock


The Mid Cap stock represent smaller sized companies operating in growth sectors
where the potential for upside is immense. These stocks have reasonable valuations with
above-average earnings growth potential. With improving corporate governance and
greater transparency in its management these stocks are expected to sustain their growth
in stock prices at decent levels in future too.

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

Repurchase at NAV based prices on all business days.

Facility to move from/to other open ended Schemes of the fund and inters se
between Growth option and Dividend option.

Transparency

Announcement of NAV on all Business Days.

Portfolio disclosure every six months.

Systematic Investment Plan


Systematic Investment Plan (SIP) is available for planned and regular
investments. Under SIP, unit holders can benefit by investing specified rupee amounts
periodically for a continuous period. This concept is called Rupee Cost
Averaging.

This program allows unit holders to save a fixed amount of rupees every

month/quarterly by purchasing additional units of the Scheme.

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

instruments of the companies


within

the

market

capitalization range of the


companies comprising CNX
(b)

Nifty Junior Index


Out of the above (a), equity
and equity related instruments
of companies that comprise

(c)

CNX Nifty Junior Index


Equity and equity related
instruments of the companies
with the market capitalization
below Rs.2000 crore as on the

(d)

date of investment
Money Market Instruments

The Ground Rules of Mutual Fund Investing


Moses gave to his followers 10 commandments that were to be
followed till eternity. The world of investments too has several ground rules

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.

2. Try to understand where the money is going


It is important to identify the nature of investment and to know if one is
compatible with the investment. One can lose substantially if one picks the
wrong kind of mutual fund. In order to avoid any confusion it is better to go
through the literature such as offer document and fact sheets that mutual fund
companies provide on their funds.

3. Don't rush in picking funds, think first

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.

4. Invest. Dont speculate


A common investor is limited in the degree of risk that he is willing to take. It
is thus of key importance that there is thought given to the process of
investment and to the time horizon of the intended investment. One should
abstain from speculating which in other words would mean getting out of one
fund and investing in another with the intention of making quick money. One
would do well to remember that nobody could perfectly time the market so
staying invested is the best option unless there are compelling reasons to exit.

Dont put all the eggs in one basket


This old age adage is of utmost importance. No matter what the risk
profile of a person is, it is always advisable to diversify the risks associated. So
putting ones money in different asset classes is generally the best option as it
averages the risks in each category. Thus, even Investors of equity should be
judicious and invest some portion of the investment in debt. Diversification
even in any particular asset class (such as equity, debt) is good. Not all fund
managers have the same acumen of fund management and with identification of
the best man being a tough task; it is good to place money in the hands of
several fund managers. This might reduce the maximum return possible, but
will also reduce the risks

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

the amount can be directly/electronically transferred from the account of the


investor.

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.

6. Find the right funds


Finding funds that do not charge many fees is of importance, as the fee
charged ultimately goes from the pocket of the investor. This is even more
important for debt funds as the returns from these funds are not much. Funds
that charge more will reduce the yield to the investor. Finding the right funds is
important and one should also use these funds for tax efficiency. Investors of
equity should keep in mind that all dividends are currently tax-free in India and
so their tax liabilities can be reduced if the dividend payout option is used.
Investors of debt will be charged a tax on dividend distribution and so can
easily avoid the payout options.

7. Keep track of your investments


Finding the right fund is important but even more important is to keep
track of the way they are performing in the market. If the market is beginning
to enter a bearish phase, then investors of equity too will benefit by switching
to debt funds as the losses can be minimized. One
Can always switch back to equity if the equity market starts to show some
buoyancy.

8. Know when to sell your mutual funds


Knowing when to exit a fund too is of utmost importance. One should
book profits immediately when enough has been earned i.e. the initial
expectation from the fund has been met with. Other factors like nonperformance, hike in fee charged and change in any basic attribute of the fund
etc. are some of the reasons for to exit. For more on it, read " When to say
goodbye to your mutual fund ."
Investments in mutual funds too are not risk-free and so investments
warrant some caution and careful attention of the investor. Investing in mutual
funds can be a dicey business for

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

Determining the relationship between low or more variables.

It is well structured.

It is more economical.

The researcher has no control.

It needs less time.

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,

Distributors, individual Institutions and websites.

Research Instrument:
The data are collected from the completed Offer Document, Fact Sheets,
Application, which talks about the new scheme and Internet.

Limitations of the study


The period of study is limited to two month.
The study is conducted in short period, due to which the study may not be detailed
in all

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.

The study is limited by the detailed study of various schemes.

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.

Leadership with Trust


At the Tata Group our purpose is to improve the quality of life of the communities
we serve. We do this through leadership in sectors of national economic significance, to
which the Group brings a unique set of capabilities. This requires us to grow aggressively
in focused areas of business.
Our heritage of returning to society what we earn evokes trust among consumers,
employees, shareholders and the community. This heritage is being continuously enriched
by the formalization of the high standards of behavior expected from employees and
companies.
The Tata name is a unique asset representing leadership with trust. Leveraging
this asset to enhance Group synergy and becoming globally competitive is the route to
sustained growth and long-term success.

Tata Five Core Values:


The Tata Group has always sought to be a value-driven organization. These values
continue to direct the Group's growth and businesses. The five core Tata values
underpinning the way we do business are:

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)

Tata SIP Fund Scheme

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)

Tata Floater Fund (TFF)


Tata Liquidity Management Fund (TLMF)

TYPES OF MUTUAL FUNDS


Getting a handle on whats under the hood helps you become a better investor and put
together a more successful portfolio. To do this one must know the different types of
funds that cater to investors needs, what ever the age, financial position, risk tolerance
and return expectations.

The mutual fund schemes can be classified on the following basis:

Schemes according to Maturity Period:


Open-Ended Fund/Scheme
An Open-Ended Scheme or fund is one that is available for subscription and
repurchase on a continuous basis. These schemes do not have a fixed maturity period.
Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices
which are declared on a daily basis. The key feature of open-end schemes is liquidity.

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.

Schemes according to Investment Objective:


It is belief that individuals differ in their investment needs based on personal financial
goals. It is recommended that you should, at the very beginning identify your own
financial goals, be it planning for your childrens education or a comfortable retired life.
After defining these, you need to plan for them in an organized manner and look at
investments that help achieve these goals. Investment experts recommend that growth

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:

Growth/Equity Oriented Schemes


The aim of growth funds is to provide capital appreciation over the medium to longterm. Such schemes normally invest a major part of their corpus in equities. Such
funds have comparatively high risks. These schemes provide different options to the
investors like dividend option depending on their preferences. The investors must
indicate the option in the application form. The mutual funds also allow the investors
to change the options at a later date. Growth schemes are good for investors having a
long-term outlook seeking appreciation over a period of time.

Income/Debt Oriented Schemes


The aim of income funds is to provide regular and steady income to investors. Such
schemes generally invest in fixed income securities such as bonds, corporate debentures,
Government securities and money market instruments. Such funds are less risky
compared to equity schemes. These funds are not affected because of fluctuations in
equity markets. However, opportunities of capital appreciation are also limited in such
funds. The NAVs of such funds are affected because of change in interest rates in the
country. If the interest rates fall, NAVs of such funds are likely to increase in the short run
and vice versa. However, long term investors may not bother about these fluctuations.

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.

Sector Specific Fund/Scheme


These are the funds/schemes which invest in the securities of only those sectors or
industries as specified in the offer documents e.g. Pharmaceuticals, Software, Fast
Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds
are dependent on the performance of the respective sectors/industries. While these
funds may give higher returns, they are more likely compared to diversified funds.
Investors need to keep a watch on the performance of those sectors/industries and
must exit at an appropriate time. They may also seek advice of an expert.

Tax Saving Schemes


These schemes offer tax rebates to the investors under specific provisions of the
Income Tax Act, 1961 as the Government offers tax incentives for investment in
specified avenues. e.g. Equity Linked Savings Schemes (ELSS). Pension schemes
launched by the mutual funds also offer tax benefits. These schemes are growth
oriented and invest pre-dominantly in equities. Their growth opportunities and risks
associated are like any equity oriented scheme.

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.

Load or Non Load Fund


A Load Fund is one that charges a percentage of NAV for entry or exit. That is, each
time one buys or sells units in the fund, a charge will be payable. This charge is used by
the mutual fund for marketing and distribution expenses. Suppose the NAV per unit is Rs.
10. If the entry as well as exit load charges is 1%, then the investors who buy would be
required to pay Rs. 10.10 and those who offer their units for repurchase to the mutual
fund will get only Rs. 9.90 per unit. The investors should take the loads into
consideration while making investment as these affect their yields/returns. However, the
investors should also consider the performance track record and service standards of the
mutual fund which are more important. Efficient funds may give higher returns in spite of
funds.A no-load is one that does not charge for entry or exit. It means the investors can
enter the fund/scheme at NAV and no additional charges are payable on purchase or sale
of units

COST INVOLVED IN MUTUAL FUNDS


Ah that all-important question what kind of hole will it burn in your pocket! Well,
there are a few charges involved, but if you think of all the bother theyre saving you and
the money that you stand to earn, you wont mind paying up.
In addition to what are called loads (explained below), a mutual fund also
charges asset management fees and certain other expenses. These charges compensate the
fund for the expenses it incurs in managing assets, processing transactions and paying
brokerages. For instance, every redemption request involves not only administrative
processing costs but also other costs associated with raising money to pay off the
outgoing investor.
However, itll please you to know that theres nothing arbitrary about these
charges. For example, regulations stipulate that the difference between the repurchase and
the resale price cannot exceed 7% of same price, and that recurring expenses cannot
exceed 2.5% of average weekly net assets. The recurring expenses limit is even lower for
schemes with a size exceeding Rs. 100 crores in net assets. So if ever you get the feeling
that youre being fleeced dont, because theres somebody making sure that all is fair and
square.

Loads
Dont look at these as a burden; just think of them as tolls you pay on the highway to big
money.

Entry Load/ Sale Load


This is the charge imposed at the time you enter a fund as an investor. You pay for the
value of the units plus an additional charge. That additional charged is termed
entry/sale load. Funds usually charge an entry load ranging between 1.00% and
2.00%.
For e.g. Let us assume an investor invests Rs. 10,000/- and the current NAV is Rs.
13/-. If the entry lo9ad levied is 1.00%, the price at which the investor invests is Rs.
13.13 per unit. The investor receives 10,000/13.13 = 761.6146 units. (Notes that units
are allotted to an investor based on the amount invested and not on the basis of no. of
units purchased).

Exit Load / Repurchase Load


The opposite of the above! This is what you cough up at the time of your exit from
the scheme. Operationally, therefore, what you get back from the mutual fund will be
the value of the units minus the exit charge. Exit loads vary between 0.25% and
2.00%.
Let us now assume that the same investor decides to redeem his 761.6146 units. Let
us alos assume that the NAV is Rs 15/- and the exit load is 0.50%. therefore the
redemption price per unit works out to Rs. 14.925. The investor therefore receives
761.6146 X 14.925 = Rs. 11367.10.

Contingent Deferred Sales Charge


A mutual fund may not want to charge an exit load in all cases. But it will still need to
recover the expenses incurred on the promotion and distribution of a scheme. What it
does then is impose a charge based on the time of withdrawal. Thus, a fund that
prefers long-term investors may stipulate that the exit charge will keep reducing with
the increasing duration of investment. Such a charge is called Contingent Deferred
Sales Charge (CDSC). The asset management company is entitled to levy a CDSC for
redemption during the first four years after purchase, not exceeding 4% of the
redemption proceeds in the first year, 3% in the second year, 2% in the third year and
1% in the forth year. In order to charge a CDSC, the scheme has to be a no-load
scheme as per the regulations laid down by SEBI.

Switchover / Exchange Fee


This is what you pay if you decide to switch your investment from one scheme of the
fund to another scheme from the same fund family. Some Mutual Funds provide the
investor with an option to shift his investment from one scheme to another within that
fund. For this option the fund may levy a switching fee. Switching allows the investor
to alter the allocation of their investment among the scheme in order to meet their
changed investment needs, risk profiles or changing circumstances during their
lifetime.

Recurring Expenses

Apart from Loads mutual funds also charge some other expenses, such as:

Investment Management & Advisory Fees

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.

Registrar and Transfer Agents Charges


The fees payable to the registrar and the transfer agents for handling all formalities
related to the transfer of units and other related operations.
Apart form these there are some other expenses such as Broker/Dealer Remuneration,
Audit Fees, Cost of Funds Transfer, Cost of providing a/c statements, Cost of
Statutory Advertisement.

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.

Interest Rate Risk:


Interest rates are not predictable and can adversely affect the prices of stocks and
bonds. For instance, when interest rise, bonds prices fall and vice-versa

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.

The findings of review are as follows:

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.

NOTE: INDIAN JOURNAL OF ACCOUNTING

TITLE: MANAGEMENT OF RISK AND RETURN


Authors: Mrs. martina R Noronha

The Present Study is an attempt to examine the investment performance of


mutual funds of the various (18)debt based schemes of three AMC with the help of ratios
and various statistical measure for three years(January 2006 to febrauary2009).This study
has been conducted with a view to develop insights of for comparing the performance of
different funds.
The Present Study compares 18 debt based sachems of three AMC on the basis of
calculation of ratios and various statistical measure for three years(January 2006 to
February 2009).The companies selected are Templeton AMC,HDFC AMC and Prudential
ICICI AMC.
Income funds in the short terms can not generate higher returns because of the
constant interplay between interest rates and bond prices. But in the long run, over a
period of the three years are more, an investors gets on advantage of return. Investors
who want to earn higher return and less risk can go for short term plans. While those
seeking higher returns from debt fund should go in for floating rate funds. Investors
seeking security should go infer liquid funds while those ready to take risk can go in-for
GLIT funds. The alpha looks at excess returns over the
index while the beta looks at excess risk over the index. Betas and Alphas go hand in
hand, An ideal fund as low beta and a high alpha.

The findings of review are as follows:


Among income funds, the performance HDFC income fund was a better
than temple ton India income fund and prudential ICICI income-LT.
An examination of monthly income plan revealed that prudential ICICI
income-LT, temple ton

India income fund and HDFC MIP-LT gave

returns in 2006-07,2007-08,2008-09 however the market out performed


the funds.
In case of short term plans the performance of Templeton short term plans
was good in the year 2005-06,2006-07 but declined the year 2007-08.But
HDFC 2008-09 year STP and Negative returns.
In case of floating rate fund, Templeton floating rate income gave good
return in 2006-09 but HDFC and ICICI were Negatives in all three years
On analyzing the liquid funds it can be seen that only prudential ICICI
Institutional and growth fund gave good returns others are negative
performance.

NOTE: INDIAN JOURNAL OF ACCOUNTING

CHAPTER-IV
DATA ANALYSIS & INTERPRETATION

DATA ANALYSIS & INTERPRETATIONS


TABLE 1
THE MINIMUM INVESTMENTS OF THE FUNDS

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

funds are having the


of Rs.5000 as they are
diversified funds. The
having Rs.500 as it

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.)

COMPARISION OF TATA MUTUAL FUNDS WITH HDFC AND


ICICI MUTUAL FUND

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

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

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

Tata infrastructure fund


Tata equity opportunities fund
Tata equity P/E fund
Tata life sciences & technology

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

HDFC childrens gift fund-investment


ICICI Prudential child care study plan
11 Tata floating rate fund-sh inst
HDFC Floating Rate Income Fund-Short
Term Plan
ICICI Prudential LT floating rate-A

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

Tata short term bond fund

0.08

Nil

0.79

HDFC short term plan


ICICI Prudential short term plan

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 gives healthy competition to other competitors

TATA offers all types of schemes like equity, debt, and liquid.

Quality is very higher than other company products.

Customers easily understand about their products through online also.

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

1. The Tata mutual fund company should concentrate in sector-oriented funds as


the sector fund is doing well in the market. .
2. The Tata mutual fund company should give proper guidance to the bank
managers about their funds for selling the funds through the banks.
3.It should also concentrate on gilt securities which give diversified
government bonds, commercial papers, treasury bills which are owned by
Central State government.
4. In an era of modern technology, Tata Mutual Fund Company should utilize
them, to create awareness through advertisement.

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