CHAPTER III Findings and Analysis

CHAPTER III Findings and Analysis
PRODUCT PROFILE (Data Analysis)
Franklin India Opportunities Fund

Scheme objective:
Is an open end diversified growth scheme with an objective to generate appreciation by
capitalizing on long term growth opportunities in the Indian economy.
Open-ended and Hybrid: Equity-oriented

NAV- Rs. 26.27 as on Oct 7, 2015
Net Assets -Rs. 9019.2 crore as on Sep 30, 2015
This product is suitable for Investors who are seeking:

Long term capital appreciation.
A fund that takes concentrated stock or sector exposures based on four themes
Portfolio Composition (As of 31/07/2015)
Strategy: This fund follows the dynamic asset allocation strategy. Based on the price-to-book
value ratio of the market, the fund sharply reduces equity exposure if valuations are high and
raises it aggressively if valuations are low. Rebalancing is done on a daily basis. Its equity
exposure can range anywhere between 30 and 80 per cent, with debt making up the residual
position. The equity position can also be supplemented with derivatives to hedge against
downside or generate arbitrage returns. Thus, this fund's NAV is unlikely to fall as much as
33
peers' in a steep market fall or in an extended bear market. Valuation calls also help the fund
decide its large-cap to mid-cap allocations. The fund presently has a conservative, large-cap
oriented portfolio, with mid-cap exposure at 20 to 30 per cent. In the February portfolio, the
fund invested 80 per cent of its equity assets in large-cap stocks. The debt portion is actively
managed for interest rate views.
Risk Measures (%)
Mean
Std Dev
Sharpe
Beta
Jensen
Alpha
Fund
16.12
8.57
1.10
0.72
6.43
VR Balanced
10.85
10.99
0.37
Category
15.35
10.69
0.79
0.93
5.02
Rank within Category
15
25
28
10
Number of funds in category
30
30
30
30
30
As on Sep 30, 2015
Trailing Returns (%)
YTD
1-Month
3-Month
1-Year
3-Year
5-Year
Fund
6.70
5.21
1.04
12.17
17.35
13.31
-0.03
6.71
-2.75
5.09
11.36
6.24
4.12
4.89
-0.58
12.12
16.14
9.92
13
44
29
13
71
81
77
61
30
26
VR Balanced
Category
As on Oct 07, 2015
Performance: The dynamic allocation, though, has worked in favour of the fund over
three- and five-year time frames when the returns were 20.8 and 15.5 per cent, respectively.
These were ahead of the category average. After a slow start initially, its performance has
picked up from 2010 vis- -vis the benchmark. It invests conservatively and shows less
volatility.
34
SBI Blue Chip Fund

Scheme objective
The objective of the scheme would be to provide investors with opportunities for long-term
growth in capital through an active management of investments in a diversified basket of
equity stocks of companies whose market capitalization is atleast equal to or more than the
least market capitalised stock of S&P BSE 100 Index.
Open-ended and Equity: Multi Cap

NAV- Rs. 103.13 as on Oct 7, 2015
Net Assets- Rs. 4351.0 crore as on Aug 31, 2015
This product is suitable for investors who are seeking Long-term capital growth.
Investment in equity shares of companies whose market capitalization is atleast equal
to or more than the least
Market capitalized stock of S&P BSE 100 index to provide long term capital growth
opportunities. high risk
Strategy: SBI Bluechip is a large-cap fund with flexibility of investing up to 20 per cent in
mid-cap stocks. The fund is benchmarked to BSE 100 index. The fund does not take any
small-cap exposure and the universe is restricted to the top 300 stocks by market cap. The
fund limits sector overweight or underweight positions to 8 per cent relative to benchmark
and individual stock weights do not move more than 5 per cent away from the benchmark. In
recent times, the fund has retained a 70-75 per cent large-cap exposure (as per Value
Research classification) with the remaining in mid caps. The fund follows a growth style
which is largely bottom-up.
35
Risk Measures (%)
Mean
Std Dev
Sharpe
Beta
Jensen
Alpha
Fund
20.46
12.84
1.07
0.89
9.02
S&P BSE 100
12.62
14.13
0.42
Category
17.48
14.67
0.74
0.98
5.64
18
83
75
15
97
97
97
95
95
As on Sep 30, 2015
YTD
1-M
3-M
1-Y
3-Y
5-Y
Fund
7.91
6.85
-2.25
16.94
22.07
11.87
-0.72
8.10
-3.69
5.15
12.96
5.73
2.95
6.85
-2.50
12.77
18.15
9.12
14
109
101
41
15
14
189
198
198
187
97
90
S&P BSE 100

Category
As on Oct 07, 2015
Performance: After a slightly inconsistent show between 2007 and 2011, the fund has
dramatically improved its performance. It has consistently beaten its benchmark and category
in the last four years. Currently, the 1-, 3- and 5-year returns are ahead of the category by 5.5
per cent, 4.6 per cent and 1.7 per cent, respectively. Investors can initiate exposures to the
fund in light of the notable improvement in performance and well-articulated strategy.
UTI Equity Fund

Scheme objective
36
This Scheme primarily aims at securing for the unit holders capital appreciation by investing
the funds of the scheme in equity shares and convertible and non-convertible bonds/
debentures of companies with good growth prospects and money market instruments.

NAV- Rs. 103.13 as on Oct 7, 2015
This product is suitable for investors who are seeking:

Long term capital growth
Investment in equity instruments of companies with good growth prospects
Moderately High Level
Strategy: UTI Equity Fund is one of the oldest funds in the Indian mutual fund space with a
22 year history. Launched as UTI Master gain, its initial years were nothing to write home
about, but in the past 7 years it has emerged as one of the most consistent large-cap funds.
The 10-year CAGR of 20 per cent is 2.5 per cent ahead of the benchmark and category on an
annual basis. The fund has widened its gap over the category in the last five years and moved
up to a 5-star Value Research ratings this year. From being an index-hugger in its initial years,
UTI Equity Fund has matured to take substantial active calls that have paid off well in recent
years. The fund has added a mid-cap flavor to the portfolio with a 15-odd per cent mid-cap
weight, 5 to 6 per cent higher than its category.
Though the fund isn't the largest in its category with an asset size of R3,265 crore (July
2014), it has always been extremely diversified. It currently holds about 70 stocks, against the
category norm of 43. A fragmented portfolio makes it difficult for this fund's stock selection
to generate substantial out-performance, which is a cause of concern. Although this curtails
risks, but it may also prevent the fund from capitalizing from one or two stock picks that pay
off in a really big way. In recent times, the fund has remained more defensive than its peers,
with lower weights in market favorites such as financials and metals, but higher weights in
automobiles, technology and healthcare stocks.
Risk Measures (%)
Mean
Std Dev
Sharpe
Beta
Jensen
Alpha
Fund
18.39
13.61
0.86
0.94
6.67
37
S&P BSE 100
12.62
14.13
0.42
Category
17.48
14.67
0.74
0.98
5.64
39
63
28
59
35
97
97
97
95
95
As on Sep 30, 2015
YTD
1-M
3-M
1-Y
3-Y
5-Y
Fund
4.17
7.89
-0.45
13.63
19.75
12.22
-0.72
8.10
-3.69
5.15
12.96
5.73
2.95
6.85
-2.50
12.77
18.15
9.12
83
26
22
85
33
12
189
198
198
187
97
90
S&P BSE 100

Category
As on Oct 07, 2015
Performance: The fund has rarely been a chart-topper, but has nevertheless created sizeable
wealth for its investors through a slow-and-steady approach. A 10-year return of 20 per cent,
a 5-year return of 16.7 per cent (category 12 per cent) and a 3 year return of 18.7 per cent
(category 15.6 per cent) have placed it among the top five funds in all these periods.
The fund has been particularly good in bear markets, containing downside to levels far lower
than the index in 2001, 2008 and 2011. As a consistent fund that navigates bear markets
really well, the fund suits a conservative investor to a tee.
Kotak 50
38
Scheme objective:
Kotak 50 is an open-ended equity scheme. The investment objective of the Scheme is to
generate capital appreciation from a portfolio of predominantly equity and equity related
securities. The portfolio will generally comprise of equity & equity related instruments of
around 50 companies which may go upto 59 companies.
Open-ended and Equity: Large Cap

NAV- Rs. 173.64 as on Oct 7, 2015
Net Assets Rs. 1203.0 crore as on Aug 31, 2015

long term capital growth
Investment in portfolio of predominantly equity & equity related securities
Strategy: Kotak 50 Fund is a diversified large cap fund which means most of your money
will be invested in giant and large companies. And just to give kicker returns the fund has
some exposure in mid cap companies as well. Large cap companies tend to be stable
compared to mid cap and small cap companies. The portfolio allocation is 90% in stocks of
large cap companies and 10% in stocks of mid cap companies. he returns in a mutual fund are
absolutely tax free, provided you did not withdraw within 1 year.
Risk Measures (%)
Mean
Std Dev
Sharpe
Beta
Jensen
Alpha
Fund
17.43
15.25
0.70
1.08
4.99
CNX Nifty
12.02
13.73
0.39
Category
13.66
13.72
0.51
0.97
1.82
12
12
66
66
66
66
66

As on Sep 30, 2015
39
YTD
1-M
3-M
1-Y
3-Y
5-Y
Fund
6.02
8.32
-1.24
16.24
18.12
9.21
CNX Nifty
-1.27
8.18
-3.92
4.14
12.45
5.96
Category
0.69
7.39
-3.47
7.32
14.12
7.14
12
13
128
135
132
128
66
61

As on Oct 07, 2015
Performance: Kotak 50 seeks to generate returns through investments in 50 to 59 companies

in the equity space. This is also the flagship fund of the mutual fund house. At the end of
August 2012 banks were the top sector in the portfolio with a share of 17 per cent. Petroleum
products, software and Pharma were some of the other areas that had an exposure of more
than 10 per cent. Reliance Industries was the top holding and the company along with Infosys
had an exposure equal to 9 per cent of the portfolio. The portfolio turnover ratio was a high
200 per cent plus figure. The CNX Nifty was the benchmark index and the fund was an
outperformer over the one and the three year time periods ended June 2012. There was a
slight consolidation in the portfolio with the share of banks rising to 18 per cent by the end of
February 2013. Petroleum products, Pharma and software were some of the other leading
sectors in the portfolio. Six month later banks still remained the top sector but the share here
was a massive 25 per cent. Software, petroleum products and consumer non durables were
some of the other leading sectors in the portfolio. The fund has improved its performance in
recent times but the investor can wait for some more time to see whether this sustains and
then consider it as a part of their portfolio choices.
40
ICICI Balanced Fund

Scheme objective:
This fund seeks to optimize the risk-adjusted return by distributing assets between both
equity and debt markets. In bullish markets equity allocation can go upto 80%. In bearish
markets equity allocation can go down to 65%. This dynamic allocation along with core debt
portfolio reduces the volatility of return.

NAV- Rs. 92.14 as on Oct 7, 2015
Net Assets- Rs. 2363.2 crore as on Sep 30, 2015

Long term wealth creation solution
A balanced fund aiming for long term capital appreciation and current income by
investing in equity as well as fixed income securities.
Strategy: ICICI Prudential Balanced Advantage is classified as an equity-oriented balanced

fund in most places. It seeks to hold at least 65 per cent in equities, like most other balanced
funds, and the rest in debt. This fund uses an in-house model, based on a long-term, historical
mean Price to Book Value (P/BV), with a view to limit the downside risk during a falling
market, while aiming to capture the upside in a rising market. The fund will have the
flexibility to hedge its equity positions with derivatives, and also take on derivative positions
in the index. Simply put, the fund uses derivative hedging strategies in its equity holding. As
a result of using active hedging strategies, it is a notch less risky than regular balanced funds,
especially in volatile/down markets. But that also means that in sudden rallying markets, the
funds hedged positions, if any, may place a cap on the returns it can manage. The fund is,
therefore, suitable for investors who are looking for returns higher than debt-oriented funds
and wish to take risks lower than balanced equity funds.The key positive about this fund is its
ability to reduce risks even while being classified as an equity fund for tax purposes. That
means you have zero capital gains tax in the fund if held for more than a year, while
assuming risks that are a few notches higher than regular debt-oriented funds
41
Risk Measures (%)
Mean
Std Dev
Sharpe
Beta
Jensen
Alpha
Fund
18.76
11.03
1.09
0.93
8.18
VR Balanced
10.85
10.99
0.37
Category
15.35
10.69
0.79
0.93
5.02
15
15
30
30
30
30
30

As on Sep 30, 2015
YTD
1-M
3-M
1-Y
3-Y
5-Y
Fund
2.20
5.74
-0.98
11.59
20.22
14.37
-0.03
6.71
-2.75
5.09
11.36
6.24
4.12
4.89
-0.58
12.12
16.14
9.92
53
27
45
31
71
81
77
61
30
26
VR Balanced
Category
As on Oct 07, 2015
Performance: ICICI Prudential Balanced Advantage has built a track record of beating its
benchmark almost all the times on a rolling one-year return basis for the last five years.
However, it took a good bit of hit in 2008. Its higher cash equity position at the beginning of
the year did cause some damage. But it managed the market fall in 2011 much better, falling
by 8.7 per cent, even as the benchmark fell by over 14 per cent.That said, in sharp rallying
markets, a defensive position could cap returns. In 2014 for instance, the fund delivered 11
percentage points lower returns than the balanced fund category-average, suggesting that its
hedging strategy worked against it. It may be fair to position this fund between debt-oriented
funds such as MIPs, and balanced funds in terms of its risk-return profile.
Franklin India Prima Plus

Scheme objective:
42
Is an open end growth scheme with an objective to provide growth of capital plus regular
dividend through a diversified portfolio of equities, fixed income securities and money
market instruments.

NAV- Rs. 445.53 as on Oct 7, 2015
This product is suitable for Investors who are seeking*:

Primarily a large cap fund with some allocation to small / mid cap stocks.
Portfolio Composition:
Strategy: The fund usually maintains a fixed allocation between large-, mid- and small-cap
stocks. It tends to be overweight on mid and small caps relative to the category. In recent
months, it has retained 55-65 per cent of its portfolio in large-cap stocks, 25-35 per cent in
mid caps and the remaining in small caps. The fund invests in wealth-creating companies
whose competitive advantages are likely to translate into superior return on capital. In recent
months the fund has pruned small-cap exposure in the favour of mid caps. The fund tends to
lean towards growth rather than value and avoids companies with governance issues.
43
Risk Measures (%)
Mean
Std Dev
Sharpe
Beta
Jensen
Alpha
Fund
21.79
13.77
1.09
0.93
10.13
CNX 500
14.04
14.47
0.50
Category
17.48
14.67
0.74
0.98
5.64
61
65
97
97
97
95
95

As on Sep 30, 2015
YTD
1-M
3-M
1-Y
3-Y
5-Y
Fund
6.69
6.70
-1.30
20.06
23.54
13.17
CNX 500
0.92
8.10
-3.05
8.08
14.52
6.23
Category
2.95
6.85
-2.50
12.77
18.15
9.12
28
122
44
12
189
198
198
187
97
90

As on Oct 07, 2015
Performance: The fund has outperformed its category by a margin of 10.6 per cent in the
last one year. Three-year and 5-year returns are also ahead of the category by 4.4 and 3.7 per
cent, respectively. The fund is a consistent benchmark beater, ahead of its index by over 6 per
cent over 5-, 7- and 10- year time frames. The fund has seen relatively few manager changes
in the last 19 years.
Tata Balanced Fund
44
Scheme objective:
To provide income distribution and / or medium to long term capital gains while at all times
emphasizing the importance of capital appreciation.

NAV- Rs. 170.44 as on Oct 7, 2015
Net Assets- Rs. 4660.8 crore as on Sep 30, 2015
This product is suitable for Investors who are seeking:

Investments in predominantly equity and equity related instruments and sme portion
in fixed income securities.
Strategy: The fund retains a roughly 75:25 equity-debt allocation. The fund sticks to the
growth-at-reasonable-price approach (GARP) for stock selection. The fund mainly buys and
holds stocks where the underlying quality of business is high. The fund does not take market
calls and ensures top exposures do not exceed 4-4.5 per cent each of assets. This makes for a
rather large number of equity holdings, around 60-65 stocks. This splintered approach
reduces risks as the fund isn't too reliant on its individual calls to score well in a rising
market. But it can prevent outsize gains in a trending market too. The fixed income portion
has high allocations to gilts and AAA-rated corporate bonds. Returns are managed through
duration calls rather than credit risk.
45
Risk Measures (%)
Mean
Std Dev
Sharpe
Beta
Jensen
Alpha
Fund
20.33
11.85
1.15
0.97
9.62
VR Balanced
10.85
10.99
0.37
Category
15.35
10.69
0.79
0.93
5.02
13
30
30
30
30
30

As on Sep 30, 2015
YTD
1-M
3-M
1-Y
3-Y
5-Y
Fund
7.66
5.39
-0.52
18.20
21.64
14.41
-0.03
6.71
-2.75
5.09
11.36
6.24
4.12
4.89
-0.58
12.12
16.14
9.92
38
37
71
81
77
61
30
26
VR Balanced
Category
As on Oct 07, 2015
Performance: The fund's one-year return of 59.8 per cent, three-year return of 27 per cent
and five-year return of 18.1 per cent place it among the top funds in the balanced category.
The fund has outperformed its category by a good 16.5 per cent, 7 per cent and 4.3 per cent in
each of these time frames. The ten-year return of 19.1 per cent compares well even to pure
equity funds. Never a poor performer, the fund has improved its place in the rankings steadily
since 2011. The fund delivers category outperformance without taking high risks either in the
equity or debt
Reliance vision fund

46
Scheme Objective:
The primary investment objective of the Scheme is to achieve long term growth of capital by
investing in equity and equity related securities through a research based investment
approach. However, there can be no assurance that the investment objective of the Scheme
will be realized, as actual market movements may be at variance with anticipated trends.

NAV- Rs. 428.31 as on Oct 7, 2015

Long term capital growth.
Investment in equity and equity related instruments through a research based
approach.
Strategy:It is a large cap fund with approximately 70% exposure in large cap. Large cap
stocks Endeavour to provide stability and liquidity to the portfolio. Almost 50% of the
portfolio consists of companies which are potential leaders in their respective sectors with an
aim to provide a solid base to the portfolio. Focus of the fund is on macro understanding of
sector calls; may take large sector deviation in a few sectors. Stocks in the portfolio are
attractively valued with the potential to provide upside in the next 12-18 months. Backed by
fund management expertise and growth oriented strategy, the fund endeavors to perform well
in the broad market condition.
Risk Measures (%)
Mean
Std Dev
Sharpe
Beta
Jensen
Alpha
Fund
17.01
19.55
0.53
1.28
3.51
47
S&P BSE 100
12.62
14.13
0.42
Category
17.48
14.67
0.74
0.98
5.64
55
79
72
97
97
97
95
95
As on Sep 30, 2015
YTD
1-M
3-M
1-Y
3-Y
5-Y
Fund
-0.69
6.29
-5.05
11.17
16.71
7.12
S&P BSE 100
-0.72
8.10
-3.69
5.15
12.96
5.73
Category
2.95
6.85
-2.50
12.77
18.15
9.12
157
150
178
120
62
68
189
198
198
187
97
90
As on Oct 07, 2015
Performance: Admittedly, recent years have been rather testing for investors in Reliance
Vision Fund. The fund has had a string of indifferent and poor years that have dented its longterm track record. Over five years annualised to the end of July 2013, the fund has
underperformed its benchmark index S&P BSE 100 and a majority of its large-cap category
peers. The funds mediocre showing in recent years has tarnished its long-term track record.
HDFC Balanced Fund
48
Scheme Objective:
The primary objective of the Scheme is to generate capital appreciation along with current
income from a combined portfolio of equity and equity related and debt and money market
instruments.

NAV- Rs. 108.84 as on Oct 7, 2015
Net assets- Rs. 4416.6 crore as on Aug 31, 2015
The product is suitable for investors who are seeking:

Capital appreciation along with current income over long term.
Investment predominantly in equity and equity related instruments with balance
exposure to debt and money market instruments.
Strategy: This fund maintains a more or less steady-state asset allocation between equities
and debt. Since March 2013, 70 to 72 per cent of the portfolio has been in equities,
irrespective of market conditions. The fund avoids buying overvalued assets . The key tools
used to achieve this objective are a target margin of safety and effective diversification, apart
from a penchant for quality stocks. The fund's equity portfolio has higher mid- and small-cap
allocations than most balanced peers. Since launch, within the equity portfolio, the average
large-cap exposure has been 57 per cent, average mid-cap exposure 27 per cent, with the rest
in small-cap stocks. The higher mid/small-cap holdings explain the fund's stellar returns in
every bull run. The debt portion is invested mainly in good-quality bonds, recently extending
duration to take advantage of falling interest rates.
Risk Measures (%)
Mean
Std Dev
Sharpe
Beta
Jensen
Alpha
Fund
19.01
11.24
1.09
0.87
8.69
49
VR Balanced
10.85
10.99
0.37
Category
15.35
10.69
0.79
0.93
5.02
13
20
30
30
30
30
30

As on Sep 30, 2015
YTD
1-M
3-M
1-Y
3-Y
5-Y
Fund
3.36
5.45
0.22
13.88
20.33
13.92
-0.03
6.71
-2.75
5.09
11.36
6.24
4.12
4.89
-0.58
12.12
16.14
9.92
40
36
20
21
71
81
77
61
30
26
VR Balanced
Category
As on Oct 07, 2015
Performance: A 52.7 per cent return in the last one year has put the fund 26 per cent ahead
of the benchmark and 9.4 per cent ahead of its category this year. Three-year returns at 23.5
per cent and five-year returns at 18.7 per cent also trounce the category by 3.4 and 4.9 per
cent, respectively. The fund's ten-year record is quite comparable to pure equity funds.
Despite its aggressive flavour, the fund has contained downside well in the bear markets of
2011 and 2008, relative to its peers. This is a balanced fund that takes no half measures. You
won't regret owning it in any secular bull run.
ICICI Pru Blended Plan-A-Direct
50
Scheme Objective:
The ICICI Prudential Blended Plan, an open-ended fund, is an arbitrage product that uses the
differences between the cash and future price of stocks to enter into equal but opposite
positions, simultaneously in both markets, for the same scrip. The fund focuses on earning
the carry cost, which is nothing but the interest income that is inherent in this difference. It is
a debt product, that uses the equity and equity future markets to augment its interest income.
Under the current SEBI regulations however derivatives exposure cannot exceed 50% of
AUM. Blended Plan invests the balance portfolio in short term debt products of high credit
quality.
Open-ended and Hybrid: Arbitrage

NAV- Rs. 22.33 as on Oct 7, 2015
Net assets- Rs. 586.1 crore as on Aug 31, 2015

Long term wealth creation solution
An equity oriented fund that aims for growth by investing in equity and equity
related securities including derivatives and the balance in debt securities.
Strategy: This fund is a blend of equity arbitrage opportunities and short term debt
instruments, and is open for subscription only for a limited period each month. It features two
options:
1)Blended Plan A - which maintains at least 51% exposure to equity and equity related
securities, which can be hiked upto 75%. The fund aims to hedge 50% out of the 51% equity
exposure and use the 1% un-hedged portion to participate in IPOs to a limited extent. The
51% exposure to equity classifies Plan A as an equity fund and therefore provides Tax Free
dividends without being subject to dividend distribution tax.
2)Blended Plan B - invests predominantly in short term debt, limiting its arbitrage exposure
to less than 50%. In both cases, the portfolio component not deployed in arbitrage is held in
short term debt instruments
51
YTD
1-M
3-M
1-Y
3-Y
5-Y
Fund
6.30
0.43
1.64
8.00
-0.03
6.71
-2.75
5.09
6.30
0.49
1.66
8.10
17
29
20
21
38
38
38
36
VR Balanced
Category
Performance: These funds, popularly known as Arbitrage Funds or Derivative Funds are
recognized for modest and secured returns across the world and are comparatively safer
investment option when compared with equity funds. Arbitrage in the financial parlance is the
practice of taking advantage of a state of imbalance between two or more markets i.e. it
involves buying and selling of equal quantities of a security in two different markets with the
expectation that a future change in price in one market will be offset by an opposite change in
the other. One of the markets is usually cash or spot, while the other is derivatives. Though it
cannot generate the kind of returns that an equity fund can but will not give negative returns
either. Also being coming under the category of equity funds post tax returns enhances in
such funds compared to the debt funds. There is no denying that such funds provide good
hedge against volatile markets but the concern is that investment opportunities catering to the
mis-pricing of securities in different markets to generate returns may be few and difficult to
spot and would require the fund managers to be very active.
52
IDEAL PORTFOLIO
FUND SCHEME
WEIGHTAGE IN
PERCENTAGE
TYPE
Prudential ICICI balanced

Fund
BALANCED
SBI Blue Chip Fund
EQUITY
UTI Equity Fund
10
EQUITY
Kotak 50
EQUITY
ICICI Balanced Fund
BALANCED
Franklin India Prima Plus
10
EQUITY
Tata Balanced Fund
BALANCED
Reliance vision fund
15
EQUITY
HDFC Balanced Fund
BALANCED
ICICI Pru Blended Plan-A-
25
ARBITRAGE
Direct
(The total allocations made in the above fund are made to the total investment amount to be
made by the individual. 10 percent of the total investment amount is kept aside for liquidity.)
53
FINDINGS
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 one s 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.
54
4. Invest. Don t 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 can perfectly time the market so staying invested is the best option unless there are
compelling reasons to exit.
5. Don t 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 one s 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.
6. Be regular: Investing should be a habit and not an exercise undertaken at one s 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.
55
7. 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.
8. Find the right funds: Finding funds that do not charge much 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.
9. 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.
56
10. 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 non-performance, hike
in fee charged and change in any basic attribute of the fund etc. are some of the reasons for to
exit.
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.
57
CHAPTER IV Limitations of the study
This report gives an insight about mutual funds and mutual fund schemes but with few
limitations as follows:
The big question is how to judge a mutual fund before investing? It is important for an
investor to consider a fund s performance over several years.
The report only analyses equity mutual fund schemes of only some funds and there
are around 34 AMCs offering wide range of scheme but to analyze them is a tedious
task.
This information is mainly regarding of those mutual funds were collected to which
SBI GROUP is an advisor.
Different fund managers adopt different strategies to improve performance. While one
fund manager may have invested in speculative stocks may over a period, another one
who have invested in speculative stocks may have struck gold in that year to
outperform the former by a long way.
Lack of proper knowledge and awareness about advantages and disadvantages

associated with various schemes among the investor.
Usually there is a tendency among investors to ignore the consistency of returns over
a period of time rather they focus on absolute returns generated in the short term.
CHAPTER V Suggestions / Recommendation

Conclusion
58
After studying & analyzing different mutual fund schemes the following conclusions can be
made:
Winning with stocks means performing at least as well as a major market index over
the long haul. If one can sidestep the common investor mistakes, then one has taken
the first and biggest step in the right direction.
Diversified stock portfolios have offered superior long term inflation protection.
Equities are especially important today with people living longer and retiring early.
To understand stock funds, one needs to be familiar with the characteristics of the
different types of companies they hold.
Portfolio managers have done a fairly good job in generating positive returns. It may
lead to gain investors confidence. Thus over all good performance of the funds is a
sign of development in new era in capital market.
On the basis of the analysis the performance of the schemes during the study period
can be concluded to be good.
Those who want to eliminate the risk element but still want to reap a better then it
would be advisable to go for debt or arbitrage schemes which ensures both safety and
returns.
So the future of mutual funds in India is bright, because it meets investor s needs
perfectly. This will give boost to Indian investors and will attract foreign investors
also. It will lead to the growth of strong institutional framework that can support the
capital markets in the long run.
BIBLIOGRAPHY
Books and magazines :
Rustagi. R. P. (2008). Investment Analysis and Portfolio Management, 2nd Edition,
Sultan Chand & Sons.

Fischer. And Jordon (2009). Security Analysis and Investment Management, 6th
Edition, Pearson Education.
59
S.Kevin. Portfolio Management,4th Edition
From the following websites:

www.google.com
http://economictimes.indiatimes.com/icici-prudential-balanced-reg/mfportfolio/schemeid686.cms
http://economictimes.indiatimes.com/reliance-vision-fund/mffactsheet/schemeid-182.cms
http://economictimes.indiatimes.com/franklin-india-prima-plus/mffactsheet/schemeid116.cms
http://economictimes.indiatimes.com/principal-dividend-yield/mffactsheet/schemeid2470.cms
http://economictimes.indiatimes.com/hdfc-top-200-fund/mffactsheet/schemeid-104.cms
http://economictimes.indiatimes.com/kotak-tax-saver/mffactsheet/schemeid-2937.cms
http://economictimes.indiatimes.com/hdfc-equity/mffactsheet/schemeid-219.cms
http://economictimes.indiatimes.com/hdfc-prudence/mffactsheet/schemeid-600.cms
http://bseindia.morningstar.co.in/mutualfunds/f0gbr06rvi/kotak-balance-fund/fundfactsheet.aspx
http://economictimes.indiatimes.com/icici-prudential-blended-plan-areg/mfreturns/schemeid-2754.cms
www.economicstimes.com
www.idbibank.com
60

CHAPTER III Findings and Analysis

Transféré par

Informations du document

Description originale:

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

CHAPTER III Findings and Analysis

Transféré par

Droits d'auteur :

Formats disponibles

CHAPTER III Findings and Analysis

PRODUCT PROFILE (Data Analysis)

Franklin India Opportunities Fund

Open-ended and Hybrid: Equity-oriented

This product is suitable for Investors who are seeking:

Risk Measures (%)

Rank within Category

Number of funds in category

As on Sep 30, 2015

Trailing Returns (%)

Rank within Category

Number of funds in category

As on Oct 07, 2015

SBI Blue Chip Fund

Open-ended and Equity: Multi Cap

Risk Measures (%)

S&P BSE 100

Rank within Category

Number of funds in category

As on Sep 30, 2015

Trailing Returns (%)

S&P BSE 100

UTI Equity Fund

Open-ended and Equity: Multi Cap

This product is suitable for investors who are seeking:

Risk Measures (%)

S&P BSE 100

Rank within Category

Number of funds in category

As on Sep 30, 2015

Trailing Returns (%)

S&P BSE 100

Open-ended and Equity: Large Cap

This product is suitable for investors who are seeking:

Risk Measures (%)

Rank within Category

Trailing Returns (%)

Rank within Category

Performance: Kotak 50 seeks to generate returns through investments in 50 to 59 companies

ICICI Balanced Fund

Open-ended and Hybrid: Equity-oriented

This product is suitable for investors who are seeking:

Strategy: ICICI Prudential Balanced Advantage is classified as an equity-oriented balanced

Risk Measures (%)

Rank within Category

Trailing Returns (%)

Rank within Category

Number of funds in category

As on Oct 07, 2015

Franklin India Prima Plus

Open-ended and Equity: Multi Cap

This product is suitable for Investors who are seeking*:

Risk Measures (%)

Rank within Category

Trailing Returns (%)

Rank within Category

Tata Balanced Fund

Open-ended and Hybrid: Equity-oriented

This product is suitable for Investors who are seeking:

Risk Measures (%)

Rank within Category

Trailing Returns (%)

Reliance vision fund