INTRODUCTION

A mutual fund is a common pool of money into which investors place their contributions that are to be invested in accordance with the stated objective. A mutual fund uses the money collected from investors to buy those assets, which are specifically permitted by its stated investment objective. A mutual fund is an entity that pools the money of many investorsits unit holdersto invest in different securities. Investment may be in shares, debt securities, money market securities or a combination of these.

DIAGRAM

A mutual fund is a trust that pools the savings of a number of investors who share a common financial goal. Anybody with an investment decision buys units of a particular mutual fund scheme that has a defined investment objective and strategy. The money thus collected is then invested by the fund manager in different types of securities. The income earned through these investments and the capital appreciation realized by the scheme is shared by its unit holders in proportion to the number of units owned by them. Mutual funds are one of the best investments ever created because they are very cost effective and very easy to invest in. By pooling money together in a mutual fund, investors can purchase stocks or bonds with much lower trading costs than if they tried to do it on their own. A mutual fund is the ideal investment vehicle for todays complex and modern financial scenario. Markets for equity shares, bonds and other fixed income instruments, real estate,

derivatives and other assets have become mature and information driven. While the concept of individuals coming together to invest money collectively is not new, the mutual fund in the present form is a 20th century phenomenon. 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 Mutual Funds are among the hottest favorites with all types of investors. Investing in mutual funds ranks among one of the preferred ways of creating wealth over the long term. In fact, mutual funds represent the hands-off approach to entering the equity market. There are a wide variety of mutual funds that are viable investment avenues to meet a wide variety of financial goals Every Mutual Fund is managed by a fund manager, who using his investment management skills and necessary research works ensures much better return than what an investor can manage on his own.

CONCEPT

When an investor subscribes for the units of a mutual fund, he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus (the total amount of the fund). Mutual Fund investor is also known as a mutual fund shareholder or a unit holder. Any change in the value of the investments made into capital market instruments (such as shares, debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. NAV is defined as the market value of the Mutual Fund scheme's assets net of its liabilities. NAV of a scheme is calculated by dividing the market value of scheme's assets by the total number of units issued to the investors

WORKING OF MUTUAL FUNDS

Investors pool their money with the fund manager and then the fund manager Invests the money in securities. These securities further generate returns. These returns are then passed back to investors

CONSTITUENTS OF MUTUAL FUND 1. SPONSOR: What a promoter to a company, a sponsor is to a mutual fund. Sponsor
is defined under SEBI Regulations as any person who is acting alone or in combination with another body corporate, establishes a mutual fund. The sponsor initiates the idea to set up a mutual fund. It could be registered company, scheduled bank or financial institution. In order to run a mutual fund in India, the sponsor has to obtain a license from SEBI. For this, a sponsor has to satisfy certain conditions, such as on capital track record (at least 5 years operation in financial services), default-free dealings and a general reputation of fairness.

2. TRUSTEES: Trustees are like internal regulators in a mutual fund, and their job is to
protect the interest of the unit holders. Trustees are appointed by sponsors, and can either

be individuals or corporate bodies. In order to ensure they are impartial and fair, SEBI rules mandate that at least two third of the trustees be independent i.e. not having any association with the sponsor. Trustees float and market schemes and secure necessary approvals. They check if the asset management companys investments are within defined limits and whether the funds assets are protected. Trustees can be held accountable for financial irregularities in the mutual fund.

3. ASSET MANAGEMENT COMPANY (AMC): An Asset Management Company is

the entity formed by the sponsor to run a mutual fund. Its the AMC that employs fund managers and analysts, and other personnel. Its the AMC that handles all operational matters of a mutual fund-from launching schemes to managing them to interacting with investors. It also exercises due diligence on investments, and submits quarterly reports to the trustees. The people in the AMC who should matter the most to you are those who take investment decisions. There is the head of the fund house, generally referred to as Chief Executive Officer (CEO). Under him comes the Chief Investment Officer (CIO), who shapes the funds investment philosophy, and fund managers, who manages its schemes. A team of analysts, who track market, sectors and companies, assists them.

4. CUSTODIAN: A custodian handles the investment back office of a mutual fund. Its
responsibilities include receipt and delivery of securities, collecting income-distributing dividends, segregating assets and settlement between schemes. The sponsor of a mutual fund cannot act as a custodian to the mutual fund. This condition, formulated in the interest of the investors, ensure that the assets of a mutual fund are not in the hands of its sponsors.

5. REGISTRAR: Registrar also known as Transfer Agents handles all investor related
services. This includes issuing and redeeming units, sending fact sheets and annual reports. Some fund houses handle such functions in house, others outsource it to registrar. Most mutual funds, in addition to registrar, also have investor service centers of their own in some cities.

Mutual funds are one of the best investments ever created because they are very cost effective and very easy to invest in. By pooling money together in a mutual fund, investors can purchase stocks or bonds with much lower trading costs than if they tried to do it on their own. A mutual fund is the ideal investment vehicle for todays complex and modern financial scenario. Markets for equity shares, bonds and other fixed income instruments, real estate, derivatives and other assets have become mature and information driven.

ADVANTAGES OF MUTUAL FUNDS PROFESSIONAL MANAGEMENT:

Mutual Funds provide the services of experienced and skilled professionals, backed by a dedicated investment research team that analyses the performance and prospects of companies and selects suitable investments to achieve the objectives of the scheme.

DIVERSIFICATION:
Mutual Funds invest in a number of companies across a broad cross-section of industries and sectors. This diversification reduces the risk because seldom do all stocks decline at the same time and in the same proportion. You achieve this diversification through a Mutual Fund with far less money than you can do on your own.

CONVENIENT ADMINISTRATION:
Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as bad deliveries, delayed payments and follow up with brokers and companies. Mutual Funds save your time and make investing easy and convenient.

RETURN POTENTIAL:
Over a medium to long-term, Mutual Funds have the potential to provide a higher return as they invest in a diversified basket of selected securities.

LOW COSTS:
Mutual Funds are a relatively less expensive way to invest compared to directly investing in the capital markets because the benefits of scale in brokerage, custodial and other fees translate into lower costs for investors.

LIQUIDITY:

In open-end schemes, the investor gets the money back promptly at net asset value related prices from the Mutual Fund. In closed-end schemes, the units can be sold on a stock exchange at the prevailing market price or the investor can avail of the facility of direct repurchase at NAV related prices by the Mutual Fund.

TRANSPARENCY:
You get regular information on the value of your investment in addition to disclosure on the specific investments made by your scheme, the proportion invested in each class of assets and the fund manager's investment strategy and outlook.

FLEXIBILITY:
Through features such as regular investment plans, regular withdrawal plans and dividend reinvestment plans, you can systematically invest or withdraw funds according to your needs and convenience.

AFFORDABILITY:
Investors individually may lack sufficient funds to invest in high-grade stocks. A mutual fund because of its large corpus allows even a small investor to take the benefit of its investment strategy.

WELL REGULATED:
All Mutual Funds are registered with SEBI and they function within the provisions of strict regulations designed to protect the interests of investors. The operations of Mutual Funds are regularly monitored by SEBI.

DISADVANTAGES OF MUTUAL FUNDS COSTS

Mutual funds don't exist solely to make your life easier--all funds are in it for a profit. The mutual fund industry is masterful at burying costs under layers of jargon. These costs are so complicated that in this tutorial we have devoted an entire section to the subject.

DILUTION
It's possible to have too much diversification (this is explained in our article entitled "Are You Over-Diversified?"). Because funds have small holdings in so many different companies, high returns from a few investments often don't make much difference on the overall return. Dilution is also the result of a successful fund getting too big. When money pours into funds that have had strong success, the manager often has trouble finding a good investment for all the new money.

PROFESSIONAL MANAGEMENTDid you notice how we qualified the advantage of professional management with the word "theoretically"? Many investors debate over whether or not the so-called professionals are any better than you or I at picking stocks. Management is by no means infallible, and, even if the fund loses money, the manager still takes his/her cut.

HISTORY OF MUTUAL FUNDS IN INDIA

The Indian mutual fund industry is as old as four decades, but its growth and awareness reached the present levels only during the last five years. Increased focus of the private sector on new distribution channels and hightech servicing has contributed immensely towards this. The mutual fund industry in India started in 1963 with the formation of Unit Trust of India (UTI), at the initiative of the Government of India and Reserve Bank of India (RBI). The history of mutual funds in India can be broadly divided into four distinct phases:

First Phase (1964-87) Second Phase (1987-93) Third Phase (1993-2003)

Fourth Phase (since 2003) First Phase (1964-1987)

In 1963, an Act of Parliament established Unit Trust of India. Operationally Unit Trust of India was set up by the Reserve Bank of India to serve as an investment vehicle for small investors. In 1964, Unit Trust of India was delinked from RBI and launched its first schemethe unit64 scheme. At the end of 1988, UTI had Rs. 6700 crores of assets under management.

Second phase (1987-1993) (Entry of Public Sector Funds)

1987 marked the entry of non-UTI, public sector mutual funds set up by the public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). State Bank of India (SBI) mutual fund was the first non-UTI mutual fund established in June 1987. From four players in 1985 the number increased to eight in 1993. LIC established its mutual funds in 1989 while GIC had set up its mutual fund in 1990. At the end of 1993, the mutual fund industry had assets under management of Rs.4700 crores.

Third Phase (1993-2003)(Entry of Private Sector Funds)

A new era in mutual fund industry began with the permission granted for the entry of private sector funds in1993, giving the Indian investors a broader choice of funds and increasing competition for the existing public sector funds. Kothari Pioneer was the first private sector fund set up in July 1993. Also, 1993 was the year in which the first mutual fund Regulation came into being, under which all mutual funds, except UTI were to be registered and governed. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised mutual fund Regulations in 1996.At the end of 2003, there were 33 mutual funds with total assets of Rs.121805 crores. The UTI with Rs.44545 crores of assets under management was ahead of other mutual funds.

Fourth Phase (since February 2003)

In February 2003, following the repeal of the UTI Act 1963, UTI was revamped and divided into two entities: UTI-I and UTI-II. UTI-I or Specified Undertaking of the UTI, having Government guarantee, consists of all assured return schemes. The UTI-II which was having Rs.76000 crores of assets under management in March 2000, with its division into two entities has increased its assets enormously. At the end of September 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.

TYPES OF MUTUAL FUNDS

Mutual fund schemes may be classified on the basis of its structure and its investment objective.

BY STRUCTURE: Open-Ended Funds:

An open-end fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value ("NAV") related prices. The key feature of open-end schemes is liquidity.

Closed-Ended Funds:
A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. The fund is open for subscription only during a specified period. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where they are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the Mutual Fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor.

Interval Funds:
Interval funds combine the features of open-ended and close-ended schemes. They are open for sale or redemption during pre-determined intervals at NAV related prices.

BY INVESTMENT OBJECTIVES: Growth Funds:

The aim of growth funds is to provide capital appreciation over the medium to long- term. Such schemes normally invest a majority of their corpus in equities. It has been proven that returns from stocks, have outperformed most other kind of investments held over the long term. Growth schemes are ideal for investors having a long-term outlook seeking growth over a period of time.

Income Funds:
The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures and Government securities. Income Funds are ideal for capital stability and regular income.

Balanced Funds:
The aim of balanced funds is to provide both growth and regular income. Such schemes periodically distribute a part of their earning and invest both in equities and fixed income securities in the proportion indicated in their offer documents. In a rising stock market, the NAV of these schemes may not normally keep pace, or fall equally when the market falls. These are ideal for investors looking for a combination of income and moderate growth.

Money Market Funds:

The aim of money market funds is to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer short-term instruments such as treasury bills, certificates of deposit, commercial paper and inter-bank call money. Returns on these schemes may fluctuate depending upon the interest rates prevailing in the market. These are ideal for Corporate and individual investors as a means to park their surplus funds for short periods.

Load Funds:
A Load Fund is one that charges a commission for entry or exit. That is, each time you buy or sell units in the fund, a commission will be payable. Typically entry and exit loads range from 1% to 2%. It could be worth paying the load, if the fund has a good performance history.

No-Load Funds:
A No-Load Fund is one that does not charge a commission for entry or exit. That is, no commission is payable on purchase or sale of units in the fund. The advantage of a no load fund is that the entire corpus is put to work.

OTHER SCHEMES: Tax Saving Schemes:

These schemes offer tax rebates to the investors under specific provisions of the Indian Income Tax laws as the Government offers tax incentives for investment in specified avenues. Investments made in Equity Linked Savings Schemes (ELSS) and Pension Schemes are allowed as deduction u/s 88 of the Income Tax Act, 1961. The Act also provides opportunities to investors to save capital gains u/s 54EA and 54EB by investing in Mutual Funds, provided the capital asset has been sold prior to April 1, 2000 and the amount is invested before September 30, 2000.

SPECIAL SCHEMES : Industry Specific Schemes:

Industry Specific Schemes invest only in the industries specified in the offer document. The investment of these funds is limited to specific industries like InfoTech, FMCG, and Pharmaceuticals etc.

Index Schemes:
Index Funds attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE 50

Sectoral Schemes:
Sectoral Funds are those, which invest exclusively in a specified industry or a group of industries or various segments such as 'A' Group shares or initial public offering

BROAD CLASSIFICATION OF MUTUAL FUNDS

1. Equity Funds Equity funds are considered to be the more risky funds as compared to other fund types, but they also provide higher returns than other funds. It is advisable that an investor looking to invest in an equity fund should invest for long term i.e. for 3 years or more. There are different types of equity funds each falling into different risk bracket. In the order of decreasing risk level, there are following types of equity funds: 2. Debt / Income Fund Funds that invest in medium to long-term debt instruments issued by private companies, banks, financial institutions, governments and other entities belonging to various sectors (like infrastructure companies etc.) are known as Debt / Income Funds. Debt funds are low risk profile funds that seek to generate fixed current income (and not capital appreciation) to investors. In order to ensure regular income to investors, debt (or income) funds distribute large fraction of their surplus to investors.

MUTUAL FUND INDUSTRY

ORIGIN OF MUTUAL FUND INVESTING
When three Boston securities executives pooled their money together in 1924 to create the first mutual fund, they had no idea how popular mutual funds would become. The idea of pooling money together for investing purposes started in Europe in the mid1800s. The first pooled fund in the U.S. was created in 1893 for the faculty and staff of Harvard University. On March 21st, 1924 the first official mutual fund was born. It was called the Massachusetts Investors Trust. After one year, the Massachusetts Investors Trust grew from $50,000 in assets in 1924 to $392,000 in assets (with around 200 shareholders). In contrast, there are over 10,000 mutual funds in the U.S. today totaling around $7 trillion (with approximately 83 million individual investors) according to the Investment Company Institute. The stock market crash of 1929 slowed the growth of mutual funds. In response to the stock market crash, Congress passed the Securities Act of 1933 and the Securities

Exchange Act of 1934. These laws require that a fund be registered with the SEC and provide prospective investors with a prospectus. The SEC (U.S. Securities and Exchange Commission) helped create the Investment Company Act of 1940 which provides the guidelines that all funds must comply with today. With renewed confidence in the stock market, mutual funds began to blossom. By the end of the 1960s there were around 270 funds with $48 billion in assets. In 1976, John C. Bogle opened the first retail index fund called the First Index Investment Trust. It is now called the Vanguard 500 Index fund and in November of 2000 it became the largest mutual fund ever with $100 billion in assets. One of the largest contributors of mutual fund growth was Individual Retirement Account (IRA) provisions made in 1981, allowing individuals (including those already in corporate pension plans) to contribute $2,000 a year. Mutual funds are now popular in employersponsored defined contribution retirement plans (401k), IRAs and Roth IRAs. Mutual funds are very popular today, known for ease-of-use, liquidity, and unique diversification capabilities.

INDUSTRY OVERVIEW
One industry which has undergone the most dramatic transformation in the post liberalization era of the nineties, the financial services sector and in particular, the mutual fund industry would be a strong contender. There has been a paradigm change in the quality and quantity of product and service offerings. After being serviced by monopoly players for decades with hardly any choice in product offerings, the Indian consumer today is being wooed by virtually the Who's Who of global and Indian players with a choice that was unimaginable a decade back. Mutual funds are companies that pool funds from a large number of investors and invest them on their behalf for a financial return by buying, holding and selling securities. Funds managed by institutional investors are huge and growing rapidly, particularly as part of the resolution of pension pressures in various parts of the world. Global Assets under Management (AUM) rose 6 per cent to US $ 38.2 trillion in the first half of 2003, according to Cerulli Associates' latest Global Update report. Cerulli predicts the global compound annual growth rate for the industry to be 8 per cent between 2002 and 2007.

MAJOR MUTUAL FUND COMPANIES IN INDIA

ABN AMRO Mutual Fund ABN AMRO Mutual Fund was setup on April 15, 2004 with ABN AMRO Trustee (India) Pvt. Ltd. as the Trustee Company. The AMC, ABN AMRO Asset Management (India) Ltd. was incorporated on November 4, 2003. Deutsche Bank A G is the custodian of ABN AMRO Mutual Fund. Birla Sun Life Mutual Fund Birla Sun Life Mutual Fund is the joint venture of Aditya Birla Group and Sun Life Financial. Sun Life Financial is a golbal organisation evolved in 1871 and is being represented in Canada, the US, the Philippines, Japan, Indonesia and Bermuda apart from India. Birla Sun Life Mutual Fund follows a conservative long-term approach to investment. Recently it crossed AUM of Rs. 10,000 crores. Bank of Baroda Mutual Fund or BOB Mutual Fund Bank of Baroda Mutual Fund (BOB Mutual Fund) was setup on October 30, 1992 under the sponsorship of Bank of Baroda. BOB Asset Management Company Limited is the AMC of BOB Mutual Fund and was incorporated on November 5, 1992. Deutsche Bank AG is the custodian. HDFC Mutual Fund HDFC Mutual Fund was setup on June 30, 2000 with two sponsors namely Housing Development Finance Corporation Limited and Standard Life Investments Limited. HSBC Mutual Fund HSBC Mutual Fund was setup on May 27, 2002 with HSBC Securities and Capital Markets (India) Private Limited as the sponsor. Board of Trustees, HSBC Mutual Fund acts as the Trustee Company of HSBC Mutual Fund.

ING Vysya Mutual Fund

ING Vysya Mutual Fund was setup on February 11, 1999 with the same named Trustee Company. It is a joint venture of Vysya and ING. The AMC, ING Investment Management (India) Pvt. Ltd. was incorporated on April 6, 1998. Prudential ICICI Mutual Fund The mutual fund of ICICI is a joint venture with Prudential Plc. of America, one of the

largest life insurance companies in the US of A. Prudential ICICI Mutual Fund was setup on 13th of October, 1993 with two sponsorers, Prudential Plc. and ICICI Ltd. The Trustee Company formed is Prudential ICICI Trust Ltd. and the AMC is Prudential ICICI Asset Management Company Limited incorporated on 22nd of June, 1993. Sahara Mutual Fund Sahara Mutual Fund was set up on July 18, 1996 with Sahara India Financial Corporation Ltd. as the sponsor. Sahara Asset Management Company Private Limited incorporated on August 31, 1995 works as the AMC of Sahara Mutual Fund. The paidup capital of the AMC stands at Rs 25.8 crores. State Bank of India Mutual Fund State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to launch offshore fund, the India Magnum Fund with a corpus of Rs. 225 cr. approximately. Today it is the largest Bank sponsored Mutual Fund in India. They have already launched 35 Schemes out of which 15 have already yielded handsome returns to investors. State Bank of India Mutual Fund has more than Rs. 5,500 Crores as AUM. Now it has an investor base of over 8 Lakhs spread over 18 schemes. Tata Mutual Fund Tata Mutual Fund (TMF) is a Trust under the Indian Trust Act, 1882. The sponsorers for Tata Mutual Fund are Tata Sons Ltd., and Tata Investment Corporation Ltd. The investment manager is Tata Asset Management Limited and its Tata Trustee Company Pvt. Limited. Tata Asset Management Limited's is one of the fastest in the country with more than Rs. 7,703 crores (as on April 30, 2005) of AUM. Kotak Mahindra Mutual Fund Kotak Mahindra Asset Management Company (KMAMC) is a subsidiary of KMBL. It is presently having more than 1,99,818 investors in its various schemes. KMAMC started its operations in December 1998. Kotak Mahindra Mutual Fund offers schemes catering to investors with varying risk - return profiles. It was the first company to launch dedicated gilt scheme investing only in government securities. Unit Trust of India Mutual Fund UTI Asset Management Company Private Limited, established in Jan 14, 2003, manages the UTI Mutual Fund with the support of UTI Trustee Company Private

Limited. UTI Asset Management Company presently manages a corpus of over Rs.20000 Crores. The sponsorers of UTI Mutual Fund are Bank of Baroda (BOB), Punjab National Bank (PNB), State Bank of India (SBI), and Life Insurance Corporation of India (LIC). The schemes of UTI Mutual Fund are Liquid Funds, Income Funds, Asset Management Funds, Index Funds, Equity Funds and Balance Funds. Reliance Mutual Fund Reliance Mutual Fund (RMF) was established as trust under Indian Trusts Act, 1882. The sponsor of RMF is Reliance Capital Limited and Reliance Capital Trustee Co. Limited is the Trustee. It was registered on June 30, 1995 as Reliance Capital Mutual Fund which was changed on March 11, 2004. Reliance Mutual Fund was formed for launching of various schemes under which units are issued to the Public with a view to contribute to the capital market and to provide investors the opportunities to make investments in diversified securities. Standard Chartered Mutual Fund Standard Chartered Mutual Fund was set up on March 13, 2000 sponsored by Standard Chartered Bank. The Trustee is Standard Chartered Trustee Company Pvt. Ltd. Standard Chartered Asset Management Company Pvt. Ltd. is the AMC which was incorporated with SEBI on December 20,1999. Franklin Templeton India Mutual Fund The group, Franklin Templeton Investments is a California (USA) based company with a global AUM of US$ 409.2 bn. (as of April 30, 2005). It is one of the largest financial services groups in the world. Investors can buy or sell the Mutual Fund through their financial advisor or through mail or through their website. They have Open end Diversified Equity schemes, Open end Sector Equity schemes, Open end Hybrid schemes, Open end Tax Saving schemes, Open end Income and Liquid schemes, closed end Income schemes and Open end Fund of Funds schemes to offer. Morgan Stanley Mutual Fund India Morgan Stanley is a worldwide financial services company and its leading in the market in securities, investment management and credit services. Morgan Stanley Investment Management (MISM) was established in the year 1975. It provides customized asset management services and products to governments, corporations, pension funds and

non-profit organizations. Its services are also extended to high net worth individuals and retail investors. In India it is known as Morgan Stanley Investment Management Private Limited (MSIM India) and its AMC is Morgan Stanley Mutual Fund (MSMF). This is the first close end diversified equity scheme serving the needs of Indian retail investors focusing on a long-term capital appreciation. Escorts Mutual Fund Escorts Mutual Fund was setup on April 15, 1996 with Escorts Finance Limited as its sponsor. The Trustee Company is Escorts Investment Trust Limited. Its AMC was incorporated on December 1, 1995 with the name Escorts Asset Management Limited Alliance Capital Mutual Fund Alliance Capital Mutual Fund was setup on December 30, 1994 with Alliance Capital Management Corp. of Delaware (USA) as sponsorer. The Trustee is ACAM Trust Company Pvt. Ltd. and AMC, the Alliance Capital Asset Management India (Pvt) Ltd. with the corporate office in Mumbai. Benchmark Mutual Fund Benchmark Mutual Fund was setup on June 12, 2001 with Niche Financial Services Pvt. Ltd. as the sponsorer and Benchmark Trustee Company Pvt. Ltd. as the Trustee Company. Incorporated on October 16, 2000 and headquartered in Mumbai, Benchmark Asset Management Company Pvt. Ltd. is the AMC. Canbank Mutual Fund Canbank Mutual Fund was setup on December 19, 1987 with Canara Bank acting as the sponsor. Canbank Investment Management Services Ltd. incorporated on March 2, 1993 is the AMC. The Corporate Office of the AMC is in Mumbai. LIC Mutual Fund Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989. It contributed Rs. 2 Crores towards the corpus of the Fund. LIC Mutual Fund was constituted as a Trust in accordance with the provisions of the Indian Trust Act, 1882. . The Company started its business on 29th April 1994. The Trustees of LIC Mutual Fund have appointed Jeevan Bima Sahayog Asset Management Company Ltd. The Reliance Anil Dhirubhai Ambani Group is among Indias top three private sector

business houses on all major financial parameters, with a group market capitalization of Rs 200,000 crore (US$ 50 billion), and net worth to the tune of Rs 58,000 crore (US$ 13 Billion) Across different companies, the group has a customer base of over 150 million, the largest in India, and a shareholder base of over 12 million, among the largest in the World. Through its products and services, the Reliance - ADA Group touches the life of 1 in 8 Indians every single day. It has a business presence that extends to over 5000 towns and Cities in India, and served by 12,000 distribution outlets, 500,000 business partners and 30,000 strong motivated workforce. The interests of the Group range from communications (Reliance Communications) and Financial services (Reliance Capital Ltd), to generation, transmission and distribution of Power (Reliance Energy), infrastructure, media and entertainment.

Introduction to Reliance Money

Reliance Money provides investors with the facility of anytime-anywhere online trading in all major asset classes, namely: Equities, Equities and Commodity derivatives IPOs, Mutual Funds Life and General Insurance products Foreign exchange derivatives Money transfer, Money changing, Precious metal retailing Credit Cards Loans Wealth Management products Network of kiosks have been set up across the country to facilitate the above trading activities Reliance Money provides entire commodity related services such as broking distribution and warehouse receipt financing Expanded its presence to 20,000 touch points. It has 10,000 outlets across 5,000 towns and cities across India.

Currently 2200+ employees across 162 locations spread across the country.
The Corporate Office at Worli, Mumbai has approx 350 people belonging to these various functions

 Acquired 2.5 million customers Accounts for daily traded volumes of over Rs 2,000 crore ( US$ 454 million ), or 3-4 % of the average daily volume of transactions logged on the stock exchanges Among the Top 3 private sector companies in financial services sector Moved into International arena- West Asia, South East Asia, Africa and Europe.

Our Mission
. is to attract, nurture & retain a team of competitive, growth oriented talent who: consistently deliver share-holder returns of 20%+ year-on-year are responsive to Employee Needs & achieving an employee satisfaction index of 90%+ and are committed to making Reliance Capital among the top 3 Best Employers to work for in India through Transparent & Robust HR processes.

Our Chairmans Vision

We live in a world where the young are reaching higher, dreaming bigger and demanding more; a world that is challenging the limits of hope and possibility. Nowhere is this more strikingly visible than in India a country that wakes up every morning a little younger in age, but infinitely more ambitious in spirit.

About The Project

The duration of my project was of two months during these two months I did many things regarding my project as I was also the part of operations I also understands how the operations department works at Reliance money.How the shares of the client are kept in electronic form in the clients account and how it is dematerialized by operations department at Reliance money.

TRAINING AND DEVELOPMENT

It is a subsystem of an organization. It ensures that randomness is reduced and learning or behavioral change takes place in structured format.

TRADITIONAL AND MODERN APPROACH OF TRAINING AND DEVLOPMENT

Traditional Approach Most of the organizations before never used to believe in training. They were holding the traditional view that managers are born and not made. There were also some views that training is a very costly affair and not worth. Organizations used to believe more in executive pinching. But now the scenario seems to be changing. The modern approach of training and development is that Indian Organizations have realized the importance of corporate training. Training is now considered as more of retention tool than a cost. The training system in Indian Industry has been changed to create a smarter workforce and yield the best results.

TRAINING DEFINED
It is a learning process that involves the acquisition of knowledge, sharpening of skills, concepts, rules, or changing of attitudes and behaviours to enhance the performance of employees. Training is activity leading to skilled behavior Its not what you want in life, but its knowing how to reach it Its not where you want to go, but its knowing how to get there Its not how high you want to rise, but its knowing how to take off

It may not be quite the outcome you were aiming for, but it will be an outcome Its not what you dream of doing, but its having the knowledge to do it It's not a set of goals, but its more like a vision Its not the goal you set, but its what you need to achieve it Training is about knowing where you stand (no matter how good or bad the current situation looks) at present, and where you will be after some point of time. Training is about the acquisition of knowledge, skills, and abilities (KSA) through professional development.

Importance of Training and Development

Optimum Utilization of Human Resources Training and Development helps in optimizing the utilization of human resource that further helps the employee to achieve the organizational goals as well as their individual goals. Development of Human Resources Training and Development helps to provide an

opportunity and broad structure for the development of human resources technical and behavioral skills in an organization. It also helps the employees in attaining personal growth. Development of skills of employees Training and Development helps in increasing the job knowledge and skills of employees at each level. It helps to expand the horizons of human intellect and an overall personality of the employees Productivity Training and Development helps in increasing the productivity of the employees that helps the organization further to achieve its long-term goal Team spirit Training and Development helps in inculcating the sense of team work, team spirit, and inter-team collaborations. It helps in inculcating the zeal to learn within the employees Organization Culture Training and Development helps to develop and improve the organizational health culture and effectiveness. It helps in creating the learning culture within the organization. Organization Climate Training and Development helps building the positive perception and feeling about the organization. The employees get these feelings from leaders, subordinates, and peers. Quality Training and Development helps in improving upon the quality of work and work-life. Healthy work-environment Training and Development helps in creating the healthy working environment. It helps to build good employee, relationship so that individual goals aligns with organizational goal. Health and Safety Training and Development helps in improving the health and safety of the organization thus preventing obsolescence. Morale Training and Development helps in improving the morale of the work force.

Image Training and Development helps in creating a better corporate image. Profitability Training and Development leads to improved profitability and more positive attitudes towards profit orientation. Training and Development aids in organizational development i.e. Organization gets more effective decision making and problem solving. It helps in understanding and carrying out organizational policies. Training and Development helps in developing leadership skills, motivation, loyalty, better attitudes, and other aspects that successful workers and managers usually display.

TRAINING AND DEVELOPMENT OBJECTIVES

The principal objective of training and development division is to make sure the availability of a skilled and willing workforce to an organization. In addition to that, there are four other objectives: Individual, Organizational, Functional, and Societal. Individual Objectives help employees in achieving their personal goals, which in turn, enhances the individual contribution to an organization. Organizational Objectives assist the organization with its primary objective by bringing individual effectiveness. Functional Objectives maintain the departments contribution at a level suitable to the organizations needs. Societal Objectives ensure that an organization is ethically and socially responsible to the needs and challenges of the society.

Importance of Training Objectives

Training objective is one of the most important parts of training program. While some people think of training objective as a waste of valuable time. The counterargument here is that resources are always limited and the training objectives actually lead the design of training. It provides the clear guidelines and develops the training program in less time

because objectives focus specifically on needs. It helps in adhering to a plan. Training objectives tell the trainee that what is expected out of him at the end of the training program. Training objectives are of great significance from a number of stakeholder perspectives. 1. Trainer 2. Trainee 3. Designer 4. Evaluator Trainer The training objective is also beneficial to trainer because it helps the trainer to measure the progress of trainees and make the required adjustments. Also, trainer comes in a position to establish a relationship between objectives and particular segments of training. Trainee The training objective is beneficial to the trainee because it helps in reducing the anxiety of the trainee up to some extent. Not knowing anything or going to a place which is unknown creates anxiety that can negatively affect learning. Therefore, it is important to keep the participants aware of the happenings, rather than keeping it surprise. Secondly, it helps in increase in concentration, which is the crucial factor to make the training successful. The objectives create an image of the training program in trainees mind that actually helps in gaining attention. Thirdly, if the goal is set to be challenging and motivating, then the likelihood of achieving those goals is much higher than the situation in which no goal is Set. Therefore, training objectives helps in increasing the probability that the participants will be successful in training. Designer The training objective is beneficial to the training designer because if the designer is aware what is to be achieved in the end then hell buy the training package

according to that only. The training designer would then look for the training methods, training equipments, and training content accordingly to achieve those objectives. Furthermore, planning always helps in dealing effectively in an unexpected situation. Consider an example; the objective of one training program is to deal effectively with customers to increase the sales. Since the objective is known, the designer will design a training program that will include ways to improve the interpersonal skills, such as verbal and non verbal language, dealing in unexpected situation i.e. when there is a defect in a product or when a customer is angry. Therefore, without any guidance, the training may not be designed appropriately. Evaluator It becomes easy for the training evaluator to measure the progress of the trainees because the objectives define the expected performance of trainees. Training objective is an important to tool to judge the performance of participants.

Training and Human Resource Management

The HR functioning is changing with time and with this change, the relationship between the training function and other management activity is also changing. The training and development activities are now equally important with that of other HR functions. Gone are the days, when training was considered to be futile, waste of time, resources, and money. Now-a-days, training is an investment because the departments such as, marketing & sales, HR, production, finance, etc depends on training for its survival. If training is not considered as a priority or not seen as a vital part in the organization, then it is difficult to accept that such a company has effectively carried out HRM. Training actually provides the opportunity to raise the profile development activities in the organization

To increase the commitment level of employees and growth in quality movement (concepts of HRM), senior management team is now increasing the role of training. Such concepts of HRM require careful planning as well as greater emphasis on employee development and long term education. Training is now the important tool of Human Resource Management to control the attrition rate because it helps in motivating employees, achieving their professional and personal goals, increasing the level of job satisfaction, etc. As a result training is given on a variety of skill development and covers a multitude of courses.

Role of HRD Professionals in Training

This is the era of cut-throat competition and with this changing scenario of business; the role of HR professionals in training has been widened. HR role now is: 1. Active involvement in employee education 2. Rewards for improvement in performance 3. Rewards to be associated with self esteem and self worth 4. Providing pre-employment market oriented skill development education and post employment support for advanced education and training 1. Flexible access i.e. anytime, anywhere training.

Models of Training
Training is a sub-system of the organization because the departments such as, marketing & sales, HR, production, finance, etc depends on training for its survival. Training is a transforming process that requires some input and in turn it produces output in the form of knowledge, skills, and attitudes (KSAs).

THE TRAINING SYSTEM

A System is a combination of things or parts that must work together to perform a particular function. An organization is a system and training is a sub system of the organization. The System Approach views training as a sub system of an organization. System Approach can be used to examine broad issues like objectives, functions, and aim. It establishes a logical relationship between the sequential stages in the process of training need analysis (TNA), formulating, delivering, and evaluating. There are 4 necessary inputs i.e. technology, man, material, time required in every system to produce products or services. And every system must have some output from these inputs in order to survive. The output can be tangible or intangible depending upon the organizations requirement. A system approach to training is planned creation of training program. This approach uses step-by-step procedures to solve the problems. Under systematic approach, training is undertaken on planned basis. Out of this planned effort, one such basic model of five steps is system model that is explained below. Organization are working in open environment i.e. there are some internal and external forces, that poses threats and opportunities, therefore, trainers need to be aware of these forces which may impact on the content, form, and conduct of the training efforts. The internal forces are the various demands of the organization for a better learning environment; need to be up to date with the latest technologies. The three model of training are: 1. System Model 2. Instructional System Development Model 3. Transitional model

System Model Training

The system model consists of five phases and should be repeated on a regular basis to make further improvements. The training should achieve the purpose of helping employee to perform their work to required standards. The steps involved in System Model of training are as follows:
1. Analyze and identify the training needs i.e. to analyze the department, job, 2. employees requirement, who needs training, what do they need to learn,

estimating training cost, etc The next step is to develop a performance measure on the basis of which actual performance would be evaluated.
3. Design and provide training to meet identified needs. This step requires

developing objectives of training, identifying the learning steps, sequencing and structuring the contents.
4. Develop- This phase requires listing the activities in the training program that will

assist the participants to learn, selecting delivery method, examining the training material, validating information to be imparted to make sure it accomplishes all the goals & objectives.
5. Implementing is the hardest part of the system because one wrong step can lead to

the failure of whole training program.

6. Evaluating each phase so as to make sure it has achieved its aim in terms of

subsequent work performance. Making necessary amendments to any of the previous stage in order to remedy or improve failure practices

Instructional System Development Model(ISD)Model

Instructional System Development model was made to answer the training problems. This model is widely used now-a-days in the organization because it is concerned with the training need on the job performance. Training objectives are defined on the basis of job responsibilities and job description and on the basis of the defined objectives individual progress is measured. This model also helps in determining and developing the favorable strategies, sequencing the content, and delivering media for the types of training objectives to be achieved. The Instructional System Development model comprises of five stages:

1. ANALYSIS This phase consist of training need assessment, job analysis, and target audience analysis. 2. PLANNING This phase consist of setting goal of the learning outcome, instructional objectives that measures behavior of a participant after the training, types of training material, media selection, methods of evaluating the trainee, trainer and the training program, strategies to impart knowledge i.e. selection of content, sequencing of content, etc. 3. DEVELOPMENT This phase translates design decisions into training material. It consists of developing course material for the trainer including handouts, workbooks, visual aids, demonstration props, etc, course material for the trainee including handouts of summary. 4. EXECUTION This phase focuses on logistical arrangements, such as arranging speakers, equipments, benches, podium, food facilities, cooling, lighting, parking, and other training accessories. 5. EVALUATION The purpose of this phase is to make sure that the training program has achieved its aim in terms of subsequent work performance. This phase consists of identifying strengths and weaknesses and making necessary amendments to any of the previous stage in order to remedy or improve failure practices.

The ISD model is a continuous process that lasts throughout the training program. It also highlights that feedback is an important phase throughout the entire training program. In this model, the output of one phase is an input to the next phase. Transitional model focuses on the organization as a whole. The outer loop describes the vision, mission and values of the organization on the basis of which training model i.e. inner loop is executed. Vision focuses on the milestones that the organization would like to achieve after the defined point of time. A vision statement tells that where the organization sees itself few years down the line. A vision may include setting a role mode, or bringing some internal transformation, or may be promising to meet some other deadlines

Mission explain the reason of organizational existence. It identifies the position in the community. The reason of developing a mission statement is to motivate, inspire, and inform the employees regarding the organization. The mission statement tells about the identity that how the organization would like to be viewed by the customers, employees, and all other stakeholders. Values is the translation of vision and mission into communicable ideals. It reflects the deeply held values of the organization and is independent of current industry environment. For example, values may include social responsibility, excellent customer service, etc. The mission, vision, and values precede the objective in the inner loop. This model considers the organization as a whole. The objective is formulated keeping these three things in mind and then the training model is further implemented.

TRAIN AND RETAIN TO STOP THE DRAIN

In todays competitive world, where margins are constantly under pressure, training budgets are the first to axed. So it becomes imperative that the training model that is evolved should be less capital intensive and not dependent upon profit margins and profitability. Although training needs are identified much before training programmed actually commence but still some crucial points are left some un-addressed. For example very little is done to know the opinion of the employee about training need identified for him as to what he feels about the same .99% cases employee is nominated by higher authorities instead of chance being given to volunteer program under the notion that boss is always right and he knows the best off. Taking this in context there are many organization where some employee who are earmarked are regularly nominated to attend training program. He is stressed out, why dont pack him up for a training program approach.

RESEARCH METHODOLOGY
Research Methodology is a way to systematically study & solve the research problems. If a researcher wants to claims his study as a good study. He must clearly state the methodology adopted in conducting the research so that it may be judged by the reader whether the methodology of work done is sound or not.

MEANING OF RESEARCH
Research is defined as a scientific & systematic search for pertinent information on a specific topic. Research is an art of scientific investigation. Research is a systematized effort to gain new knowledge.

RESEARCH PROBLEM
I am trying to study the comparison of equity diversified schemes on the basis of their performance, return and risk in both long run and short run period of time.

SOURCES OF DATA
Both primary and secondary sources of data have been used to collect the information: The primary data is collected through structured unbiased questionnaire and personal interviews. For this purpose the structured questionnaire was administered for the respondent The secondary data, on the other hand is collected through books, magazines and websites.

SAMPLE SIZE
The overall sample involve din the study consisted of 78 individuals and corporate. Keeping in view the limited sources of time, a limited sample of individuals from local area of city of Rohtak was picked up. It was fixed before hand and every effort was made to cover the given number of individuals within the available time for collection of data for this project. The data was collected with the help of questionnaire, himself by the researcher.

SAMPLE DESIGN
The selection of respondents for our study is done on the basis of convenient sampling

RESEARCH OBJECTIVES
The first and the foremost objective of the present study is to evaluate various equity diversified funds. To have an insight of equity diversified schemes.

To analyze the performance of equity diversified funds on the basis of following To evaluate risk and return level of 5 equity diversified schemes. Comparison and analysis of selected funds on the basis of: Alpha Beta Standard deviation Sharpe ratio fund objective fund style fund detail Sectoral allocations Portfolios

TOOLS APPLIED
Data collected from various secondary sources was used for comparing the Mutual fund scheme using Sharpe ratio, Standard Deviation, Beta and Alpha value measures of risk and performance of mutual funds.

STANDARD DEVIATION
The most basic of all measures- Standard Deviation allows you to evaluate the volatility of the fund. Put differently it allows you to measure the consistency of the returns. It is a

statistical measure of the historic volatility of a portfolio. It measures the dispersion of a fund's periodic returns. The wider the dispersions, the larger the standard deviation and the higher the risk. Volatility is often a direct indicator of the risks taken by the fund. The standard deviation of a fund measures this risk by measuring the degree to which the fund fluctuates in relation to its mean return, the average return of a fund over a period of time.

BETA Beta is a fairly commonly used measure of risk. It basically indicates the level of volatility associated with the fund as compared to the benchmark. So quite naturally the success of beta is heavily dependent on correlation between a fund and its benchmark. Thus if the funds portfolio doesnt have a relation benchmark index then a beta would be grossly inadequate. A beta that is greater than one means that the fund is more volatile than the benchmark, while a beta of less than one means that the fund is less volatile than the index. A fund with a beta very close to 1 means the funds performance closely matches the index or benchmark. If, for example, a fund has a beta of 1.03 in relation to the BSE sensex, the fund has been moving 3% more than the index. Therefore, if the BSE Sensex increased 10% the fund would be expected to increase 10.30%. Investors expecting the market to be bullish may choose funds exhibiting high betas, which increase investors chances of beating the market. If the investor expects the market to be bearish in the near future, the funds that have betas less than 1 are a good choice because they would be expected to decline less in value than the index.

ALPHA
Alpha = (Fund return-Risk free return) - Funds beta *(Benchmark return- risk free return).

The most commonly used method of determining the return that should have been earned by the scheme at a given level of risk is by way of alpha. A positive alpha means that return tends to be higher than expected given beta. Conversely a negative alpha indicates that the fund is an under performer. It measures the value added of the portfolio given its level of systematic risk

SHARPE RATIO
Sharpe Ratio= Fund return in excess of risk free return/ Standard deviation of Fund. So what does one do for funds that have low correlation with indices or benchmarks? Use the Sharpe ratio. Since it uses only the Standard Deviation, which measures the volatility of the returns there is no problem of benchmark correlation. The higher the Sharpe ratio, the better a funds returns relative to the amount of risk taken. Sharpe ratios are ideal for comparing funds that have a mixed asset classes. That is balanced funds that have a component of fixed income offerings

LIMITATIONS OF THE STUDY

Though this research has been carried out with utmost care and diligence, even than certain inherent limitations creep in, which are stated as follows: The present study covers only equity diversified schemes. Due to time constraint only open ended schemes have been included for the analysis purpose. In mid cap funds only four funds could be included since ICICI prudential does not have any mid cap equity diversified fund which has been launched for more than three years. The result from the analysis is qualitative and not quantitative. Availability of informants was not sufficient because of less awareness among brokers. Taking into account time, cost and availability of informants the sample of the study is restricted to 78 persons. Sample size is not enough to have a clear opinion.

 There might have been some biasness on the part of the respondents. Some of the respondents of the survey were unwilling to share the information.

EQUITY FUNDS
Equity funds seek to provide maximum growth of capital with secondary emphasis on dividend. Equity mutual funds are also known as stock mutual funds. Equity mutual funds invest pooled amounts of money in the stocks of public companies. Stocks are often categorized by their market capitalization (or caps), and can be classified in three basic sizes: small, medium, and large. Many mutual funds invest primarily in companies of one of these sizes and are thus classified as large-cap, mid-cap or small-cap funds. The investments of these schemes will predominately be in the stock markets and endeavor will be to provide investors the opportunity to benefit from the higher returns, which stock markets can provide. However they are also exposed to the volatility and attendant risks of stock and hence should be chosen only by investors who have high risk taking capacities and are willing to think long term. EQUITY FUND INCLUDE: 1. DIVERSIFIED EQUITY FUNDS 2. EQUITY TAX PLANNING 3. SECTORAL FUNDS

DIVERSIFIED EQUITY FUNDS : DIVERSIFICATION

Diversification means making investments in different sectors. Investments in securities are spread across a wide cross-section of industries and sectors and thus risk is reduced. Diversification reduces the risk because all stock may move in same direction in the same proportion at the same time

WHO SHOULD INVEST This is an ideal category for those who want to participate in stock market & knows the risk involved in stock market but have few rupees to invest in blue chip stocks. HOW THEY PERFORMED Though the short term out look is volatile in long-term equity diversified funds have outperformed other categories & stock markets will lesser amount of risk than stock markets. The average returns of equity diversified funds are 102%.

COMPARATIVE ANALYSIS
The analysis of mutual fund is done either on qualitative or quantitative analysis. Qualitative analysis looks at factors such as the background and experience of the manager and the mutual fund company. Here, we look only at the quantitative factors such as performance, objective, investment style, Sectoral allocation, portfolio, risk and return etc.The performance of Mutual funds is measured in terms of risk and returns a particular fund give. There is correlation between the risk n return a fund can achieve. The first and the foremost medium through which performance of any portfolio is expressed are the associated returns in a designated time period. Returns over the years are seen to measure the performance of any fund. Risks are another factor used to analyses and compare the various schemes of mutual fund. Different terms as probability of loss, variability of returns, volatilities in returns etc.have been coined to represent risk involved in a given managed portfolio. The return alone cannot be considered as the basis of measurement of the performance of a mutual fund scheme, it should also include the risk taken by the fund manager because different funds may have different levels of risk attached to them. By using the risk return relationship, we try to access the competitive strength of the mutual funds vis--vis one another in a better way. A mutual fund may be ranked high both in terms of returns and riskadjusted returns, but the important thing is that the investor should be aware of the level of risk. Volatility is how risk manifests itself, so all the common "risk" measurements that you'll see below actually gauge how volatile an investment has been in the past not how "risky" it is.

It's not enough to evaluate a fund based on performance alone. Financial professionals must also look at its risk-adjusted return, In this chapter attempt has been made to compare the various equity diversified schemes (selected schemes) with reliance equity diversified schemes. all open ended equity schemes of the various Mutual funds has been selected for comparison.

INVESTMENT RISK
Risks help in knowing the variation in portfolio returns. While past performance does not necessarily predict future returns, it can tell you how volatile a fund has been. Generally, the more volatile a fund, the higher the investment risk. Volatility is nothing but the fluctuation of the Net Asset Value (price of a unit of a fund). The higher the volatility, the greater the fluctuations of the NAV. Generally speaking, risk and potential return are related. This is the risk/return trade-off. Higher risks are usually taken with the expectation of higher returns at the cost of increased volatility. While a fund with higher risk has the potential for higher return, it also has the greater potential for losses or negative returns. Return alone should not be considered as the basis of measurement of the performance of a mutual fund scheme, it should also include the risk taken by the fund manager because different funds will have different levels of risk attached to them. Risk associated with a fund, in a general, can be defined as variability or fluctuations in the returns generated by it. The higher the fluctuations in the returns of a fund during a given period, higher will be the risk associated with it. These fluctuations in the returns generated by a fund are resultant of two guiding forces. First, general market fluctuations, which affect all the securities present in the market, called market risk or systematic risk And second, fluctuations due to specific securities present in the portfolio of the fund, called unsystematic risk. The Total Risk of a given fund is sum of these two and is measured in terms of standard deviation of returns of the fund. Systematic risk, on the other hand, is measured in terms of Beta, which represents fluctuations in the NAV of the fund vis--vis market. Beta is calculated by relating the returns on a mutual fund with the returns in the market. While unsystematic risk can be diversified through investments in a number of instruments, systematic risk can not. By using the risk return relationship, we try

to assess the competitive strength of the mutual funds vis--vis one another in a better way. THE VARIOUS MUTUAL FUNDS HOUSES WHICH ARE SELECTED FOR CAMPARISION OF EQUITY DIVERSIFIED SCHEMES ARE: RELIANCE HDFC FRANKLIN TEMPLETON BIRLA SUNLIFE ICICI PRUDENTIAL

The comparison is done on following parameters: Portfolio Returns Risk and volatility Expense ratio, entry load, exit load, minimum investment required, systematic investment plan, systematic withdrawal ratio, benchmark, investment style.

THE VARIOUS SUB PARAMETERS THAT ARE TO BE CONSIDERED ARE AS FOLLOWS

PORTFOLIO: Market capitalization Portfolio turnover Asset under management Sectoral holdings P/E ratio

RISK AND VOLATALITY: The sub class parameters for analysis are: Standard deviation Sharpe ratio Beta Alpha

RETURNS: NAV 6 months 1 year 3 year Return since inception

INFORMATION OF DIFFERENT FUNDS

LARGE CAP FUNDS:

RELIANCE VISION FUND HDFC TOP 200 FUND ICICI PRUDENTIAL GROWTH PLAN-CUMULATIVE FRANKLIN BLUE CHIP FUND BIRLA ADVANTAGE FUND

RELIANCE VISION FUND:

INVESTMENT OBJECTIVE:
The primary investment objective of the Scheme is to achieve long term growth of capital by investment in equity and equity related securities through a research based investment approach.

FUND DETAIL
STRUCTURE INCEPTION DATE BENCHMARK SPECIAL FEATURE AN OPEN-ENDED EQUITY GROWTH SCHEME OCTOBER 8,1995 BSE 100 INDEX ANY TIME MONEY CARD WEIGHTAGE (%) 86.61 13.39 OTHER 100 % ALLOCATION 8.58 CAPITAL 8.45 7.54 7.29 7.21

PORTFOLIO VIEW
HOLDING EQUITY DEBT,DERIVATIVES,CAS H & RECEIVABLES TOTAL TOP 5 HOLDINGS SOFTWARE INDUSTRIAL GOODS PHARMACEUTICALS PETROLEUM PRODUCTS AUTO

HDFC TOP 200 FUND INVESTMENT OBJECTIVE:

To generate long term capital appreciation from a portfolio of equity and equity-linked instruments primarily drawn from the companies in BSE 200 index

FUND DETAIL
STRUCTURE INCEPTION DATE BENCHMARK OPEN ENDED EQUITY GRWOTH SCHEME SEP 1996 BSE 200

POR TFOLIO REVIEW HOLDING EQUITY DEBT,DERIVATIVES,CAS H & OTHER 100 % ALLOCATION 8.58 8.45 7.54 7.29 7.21 RECEIVABLES TOTAL TOP 5 HOLDINGS TECHNOLOGY ENERGY FINANCIAL SERVICE BASIC /ENGINEERING CONSUMER DURABLE NON WEIGHTAGE(%) 93.94 6.06

ICICI PRUDENTIAL GROWTH PLAN-CUMULATIVE

INVESTMENT OBJECTIVE:
To seek to generate long-term capital appreciation from a portfolio that is invested predominantly in equity and equity related securities.

FUND DETAIL
STRUCTURE INCEPTION DATE BENCHMARK OPEN ENDED EQUITY GRWOTH SCHEME June 1998 S&P CNX NIFTY

POR TFOLIO REVIEW HOLDING EQUITY DEBT,DERIVATIVES,CAS H & OTHER 100 RECEIVABLES TOTAL WEIGHTAGE (%) 91.94 8.06

TOP 5 HOLDINGS TECHNOLOGY FINANCIAL SERVICE ENERGY DIVERSIFIED SERVICES

% ALLOCATION 23.49 13.57 13.34 7.36 6.88

FRANKLIN BLUE CHIP FUND INVESTMENT OBJECTIVE:

Aims to achieve steady and consistent capital appreciation through investment in wellestablished, large size blue-chip companies.

FUND DETAIL
STRUCTURE INCEPTION DATE BENCHMARK OPEN ENDED EQUITY GRWOTH SCHEME NOV 1993 SENSEX

POR TFOLIO REVIEW HOLDING EQUITY DEBT,DERIVATIVES,CAS H & OTHER 100 RECEIVABLES TOTAL WEIGHTAGE (%) 95.41 4.59

TOP 5 HOLDINGS TECHNOLOGY FINANCIAL SERVICE DIVERSIFIED BASIC AUTOMOBILE

% ALLOCATION 18.75 18.21 15.34 13.41 7.43

BIRLA ADVANTAGE FUND INVESTMENT OBJECTIVE:

Aims to achieve long term growth of capital at relatively moderate levels of risk

through a diversified research based investment approach.

FUND DETAIL
STRUCTURE INCEPTION DATE BENCHMARK OPEN ENDED EQUITY GRWOTH SCHEME FEB 1995 SENSEX

POR TFOLIO REVIEW HOLDING EQUITY DEBT,DERIVATIVES,CAS H & OTHER 100 RECEIVABLES TOTAL WEIGHTAGE (%) 96.95 3.05

TOP 5 HOLDINGS TECHNOLOGY FINANCIAL SERVICE BASIC ENERGY CONSUMER DURABLE NON

% ALLOCATION 27.00 12.27 11.21 8.83 7.87

SNAP SHOT VIEW

FUND NAME

EXPENS E RATIO

CATEGOR Y

RATING *

RISK GRAD E

RETUR N GRAD E

1 YEAR RETUR N

Franklin India Bluechip

1.88

Equity: Diversified

Averag e

Average

48.78

HDFC Top 200 Birla advanta ge

1.93

Equity: Diversified

low

Above Average

45.94

2.25

Equity: Diversified

Below Averag e

Average

39.96

* This rating is given by www.valueresearchonline.com

PERFORMANCE VIEW

FUND NAME

6-Month return(%)

6Month Rank

1-Year return(%)

1-Year Rank

3-Year return(%)

3-Year Rank

Franklin India Blue chip HDFC 200 Birla advantage ICICI Prudential Growth Reliance Vision Top

12.55

70/165

48.78

75/161

44.92

43/80

13.58

58/165

45.94

91/161

48.96

24/80

4.66

114/165

39.96

112/161

42.49

32/80

10.41

105/165

41.97

95/161

47.47

48/80

19.06

16/165

57.90

32/161

53.26

14/80

PERFO A RM NCE 6 0 5 0 4 0 RETURNS(%) 3 0 20 10 0

FU D N N M A E Franklin India B lue chip H FC Top D 444 B irla advantage IC I IC Prudential G rowth 44 . 44 44 . 44 44 . 44 44 . 44 3. 3 3 3 44 . 44 44 . 44 44 44 . 44 4 . 44 . 44

1 -Y return(% ear ) 3-Y return(% ear )

R eliance Vis ion

FUNDS

ANALYSIS
In order to analyze the performance of the mutual funds during the study period, year- wise analysis was done; the results are given in Table above. In order to measure performance short term returns dont matter much, a fund is said to performing well if it is able to earn maximum return in long term. On the basis of 1year returns out of 5 mutual selected funds, reliance vision fund is earning

maximum return of 57.90% and it ranks at the position of 32 out of 161 mutual funds and Birla advantage is performing the least. But if we see long term returns i.e. 3years of the selected funds again reliance vision fund is giving outstanding returns of 53.26% . Whereas Birla advantage fund is again performing least in 3year return.

PORTFOLIO VIEW

FUND NAME Franklin India Blue chip

MARKET CAP(Rs. Cr) 38,831.02

TURN OVER(%) 35.54

ASSETS (Rs. Cr) 2544.34

TOP5 HOLDING(%) 29.44

P/E RATIO 42.49

HDFC Top 200 Birla advantage ICICI Prudential Growth Reliance Vision

26,766.24

168.48

1971.01

25.72

31.22

21982.20

25.00

505.76

28.79

34.33

51,857.85

236.00

458.24

27.80

29.24

19,817.66

131.00

3103.37

29.99

33.96

INVESTMENT DETAILS VIEW

FUND NAME

EXPENSE RATIO

FRONT END LOAD(%)

BACK END LOAD (%)

MIN INITIAL INV (Rs.) 5000

PORTFOLIO MANAGER

Franklin India Bluechip HDFC 200 Birla advantage ICICI Prudential Growth Reliance Vision Top

1.88

2.25

0.00

Siva

Subramanian

1.93

2.25

0.00

5000

Prashant Jain

2.25

2.25

0.00

5000

Ajay Argal

2.30

2.25

0.00

5000

Deven Sangoi

1.86

2.25

0.00

5000

Ashwani Kumar

RISK AND VOLATILITY

FUND NAME

FUND GRADE

RISK

STANDARD DEVIATION 5.79

SHARPE RATIO 0.50

BET A 0.99

ALPH A 0.31

FRANKLIN Bluechip HDFC Top 200

India

Average

Low Below Average Average

5.37 5.60 5.86

0.58 0.51 0.52

0.91 0.91 0.99

0.71 0.43 0.46

BIRLA advantage ICICI Growth RELIANCE Vision Prudential

Below Average

5.77

0.59

0.90

1.02

STANDARD DEVIATION AND BETA

6 5 4 3 2 1 0
FN UD NM A E

4 44 .

4. 44

44 .

4. 44

4. 44

SADR TNAD D VA I N E I TO 4. 44 4. 44 4. 44 4. 44 4. 4
RL N E E IA C V isio n

BT EA

F A K IN R NL In ia d B ec ip lu h

HF T p DC o 444

B L IR A a vn g d a ta e

IC I IC P d tia ru en l G w ro th

fu d ns

Analysis of funds on basis of risk and volatility

STANDARD DEVIATION: Variation = b = (return-mean) 2 Standard deviation = = vb Standard deviation is used to measure the volatility of the performance of portfolio of funds. Volatility is often a direct indicator of the risks taken by the fund. The standard deviation of a fund measures this risk by measuring the degree to which the fund fluctuates in relation

to its mean return, the average return of a fund over a period of time. A higher standard deviation means higher risk but it does not necessarily mean that such a fund is worse than one with a low Standard Deviation. If the first fund is a much higher performer than the second one, the deviation will not matter much. From the above table it is clear that HDFC top 200 has minimum standard deviation While Birla advantage has standard deviation of 5.60.reliance vision and Franklin blue chip fund have average standard deviation among all 5 funds. Most the highest standard deviation is of ICICI prudential growth. This means that it has more risk and more return. BETA: It is statistical tools, which can give an idea of how a fund will move in relation to the market. Beta is a statistical measure that shows how sensitive a fund is to market moves. it shows how much above and below will the fund rise or fall. beta ranges between 0 to 1. This shows that a fund with a beta of more than one will rise more than the market and also fall more than market. When safety of investment is important, a fund with a beta of less than one is a better option. Such a fund may not gain much more than the market on the upside; it will protect returns better when market falls. From the above table we can analysis that ICICI Prudential and Franklin have max of beta i.e. 0.99 this shows that these both fund are most volatile among all. Birla advantage and HDFC top 200 fund are moderate fund which have beta 0.91 these funds will range in average risk category. Reliance vision fund is least risk of all as beta of this fund is least i.e. 0.90. So on the basis of beta tool reliance vision fund is the best fund. ALPHA

1. 2 44 .4 1 08 . 06 . 44 .4 04 . 02 . 0 4. 44 44 .4 AP A LH

44 .4

FN UD NM A E

F A K IN R NL In ia d B eh lu c ip

HF T p DC o 444

B L IR A a vn g d a ta e

IC I IC P dn l ru e tia G w ro th

RL N E E IA C V io is n

ALPHA: Alpha tells you whether that fund has produced returns justifying the risks it is taking by comparing its actual return. A positive alpha implies that a fund has performed better than expected, given its level of risk. Conversely a negative alpha indicates that the fund is an under performer. It measures the value added of the portfolio given its level of systematic risk. So higher the alpha better the fund is. Reliance vision fund has highest alpha 1.02 among all it shows that this fund has earned more returns as compared to other funds. HDFC top 200 has second highest alpha of 0.76 whereas ICICI pru has 0.4 Followed by them is Birla advantage which has 0.43as alpha. Least of them is Franklin fund which has alpha of 0.31 while tit has maximum beta. SHARPE RATIO:

06 . 05 .8 05 .6 05 .4 S AP RT H R E A IO 05 .2 05 . 04 .8 04 .6 04 .4
FN UD NM A E F A K IN R NL In ia d Beh lu c ip HF T p DC o 444 B L IR A a vn g d a ta e IC I IC P dn l ru e tia G w ro th

44 .4

44 .4

44 .4 44 . 44 .4

SAP HRE RT AI O

RL N E E IA C V io is n

FNS UD

SHARPE RATIO: At times high returns are generally associated with a high degree of volatility. We accept this volatility only because we want higher returns. The Sharpe ratio represents this trade off between risk and returns. At the same time it also factors in the desire to generate returns, which are higher than those from risk free returns. Mathematically the Sharpe ratio is the returns generated over the risk free rate, per unit of risk. The Sharpe ratio reflects the returns generated by undertaking all possible risks. Reliance vision fund has highest Sharpe ratio of 0.59 The higher the Sharpe ratio, the better a funds returns relative to the amount of risk taken . Followed by HDFC with 0.58 and ICICI with 0.52 Birla advantage has 0.51 and least among all is of Franklin 0.50. So from above graph we can say reliance vision fund is the best performer among all the given funds

Ranks 1

Standard Deviation HDFC top 200 fund

Alpha Reliance vision fund HDFC top fund 200

year

Sharpe Ratio Reliance vision fund HDFC top 200 fund

Returns Reliance vision fund Franklin blue chip

Birla advantag e fund

Reliance vision fund

ICICI pru growth Birla advantag e

HDFC top 200 ICICI growth pru

ICICI growth Birla

pru

Franklin blue chip

advantage

ICICI pru growth

Franklin blue chip

Birla advantage

Franklin blue chip

From the above graph we can see that all the equity funds do not match the low risk-low return and high risk=high return condition. HDFC top 200fund is giving minimum risk among all but this fund is giving average returns among all. So this fund doesnt match low risk low return condition. Birla advantage fund matches with low risk low return condition standing on second place among all the selected funds. Reliance vision fund is giving average risk among all but this is giving high rate of return. This shows that the fund manager of this fund is able to manage the portfolio of this fund in a good manner. He is able to control the controllable risk so that the fund can generate high returns. Franklin blue chip fund is giving high risk and above average return among all the selected Funds. CORPORATE GOVERNANCE CORPORATE GOVERNANCE POLICY Reliance Capital Asset Management Ltd. has a vision of being a leading player in the Mutual Fund business and has achieved significant success and visibility in the market. However, an imperative part of growth and visibility is adherence to Good Conduct in the marketplace. At Reliance Capital Asset Management Ltd., the implementation and observance of ethical processes and policies has helped us in standing up to the scrutiny of our domestic and international investors.

MANAGEMENT The management at Reliance Capital Asset Management Ltd. is committed to good Corporate Governance, which includes transparency and timely dissemination of information to its investors and unit holders. The Board of Directors of RCAM is a professional body, including wellexperienced and knowledgeable Independent Members. Regular Audit Committee meetings are conducted to review the operations and performance of the company. EMPLOYEES Reliance Capital Asset Management Ltd. has at present, a code of conduct for all its officers. It has a clearly defined prohibition on insider trading policy and regulations. The management believes in the principles of propriety and utmost care is taken while handling public money, making proper and adequate disclosures. All personnel at Reliance Capital Asset Management Ltd are made aware of their rights, obligations and duties as part of the Dealing Policy laid down in terms of SEBI guidelines. They are taken through a well-designed HR program, conducted to impart work ethics, the Code of Conduct, information security, Internet and e-mail usage and a host of other issues. One of the core objectives of Reliance Capital Asset Management Ltd. is to identify issues considered sensitive by global corporate standards, and implement policies/guidelines in conformity with the best practices as an ongoing process. Reliance Capital Asset Management Ltd. gives top priority to compliance in true letter and spirit, fully understanding its fiduciary responsibilities. SPONSORS Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management Limited., a subsidiary of Reliance Capital Limited, which holds 93.37% of the paid-up capital of RCAM, the balance paid up capital being held by minority shareholders., the sponsor. Reliance Mutual Fund (RMF) has been sponsored by Reliance Capital Ltd (RCL). The promoter of RCL is AAA Enterprises Private Limited. Reliance Capital Limited is a Non Banking Finance Company. Reliance Capital Limited is one of the Indias leading and fastest growing financial services companies, and ranks among the top three private sector financial services and banking companies, in terms of net worth. Reliance Capital has interests in asset management and mutual funds, life and non-life insurance, private equity and proprietary investments, stock broking and other activities in the financial services sector. The net worth of RCL is Rs. 5,161.23 crores as on March 31, 2007. GIVEN BELOW IS A SUMMARY OF RCLS FINANCIALS Particulars 2006-07 (Rs. in crores) Total Income 883.86 Profit Before Tax 733.18 Profit After Tax 646.18 Reserves & Surplus 4915.07 Net Worth 5161.23 Earnings per Share28.39 (Rs.) 2005-06 652.02 550.61 537.61 3849.58 4122.46 29.74 2004-05 295.69 111.21 105.81 1310.08 1437.92 8.31 2003-04 356.79 105.79 105.79 1271.84 1399.81 8.31

(Basic +Diluted) Book Value per Share210.12 (Rs.) Dividend (%) 35% Paid up Equity Capital246.16

(Basic +Diluted) (Basic+ Diluted) 112.95 30% 223.40 112.95 30% 127.84

(Basic + Diluted) 109.96 29% 127.84

Reliance Capital Ltd. has contributed Rupees One Lac as the initial contribution to the corpus for the setting up of the Mutual Fund. Reliance Capital Ltd. is responsible for discharging its functions and responsibilities towards the Fund in accordance with the Securities and Exchange Board of India (SEBI) Regulations. The Sponsor is not responsible or liable for any loss resulting from the operation of the Scheme beyond the contribution of an amount of Rupees one Lac made by them towards the initial corpus for setting up the Fund and such other accretions and additions to the corpus. THE AMC RELIANCE CAPITAL ASSET MANAGEMENT COMPANY Reliance Capital Asset Management Limited (RCAM), a company registered under the Companies Act, 1956 was appointed to act as the Investment Manager of Reliance Mutual Fund. Reliance Capital Asset Management Limited (RCAM) was approved as the Asset Management Company for the Mutual Fund by SEBI vide their letter no IIMARP/1264/95 dated June 30, 1995. The Mutual Fund has entered into an Investment Management Agreement (IMA) with RCAM dated May 12, 1995 and was amended on August 12, 1997 in line with SEBI (Mutual Funds) Regulations, 1996. Pursuant to this IMA, RCAM is authorized to act as Investment Manager of Reliance Mutual Fund. The net worth of the Asset Management Company including preference shares as on September 30, 2007 is Rs.152.02 crores. Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management Limited., a subsidiary of Reliance Capital Limited, which holds 93.37% of the paid-up capital of RCAM, the balance paid up capital being held by minority shareholders. Reliance Capital Asset Management Limited (RCAM) was approved as the Asset Management Company for the Mutual Fund by SEBI by their letter no. IIMARP/1264/95 dated June 30, 1995. The Mutual Fund has entered into an Investment Management Agreement (IMA) with RCAM dated May 12, 1995 and was amended on August 12, 1997 in line with SEBI (Mutual Funds) Regulations, 1996. Pursuant to this IMA, RCAM is authorized to act as Investment Manager of Reliance Mutual Fund. The net worth of the Asset Management Company including preference shares as on March 31, 2005 is Rs.113.59 crores. MUTUAL FUNDS ASSET UNDER MANAGEMENT: TOP 10 COMPANIES LIST Mutual Fund Assets Under Management (Rs. cr.) February- March 08 08 Change %Change

Reliance Mutual Fund

93,532

90,938

-2,594

-2.77

ICICI Prudential Mutual Fund

59,278

54,322

-4,956

-8.36

UTI Mutual Fund

52,465

48,983

-3,482

-6.64

HDFC Mutual Fund

46,292

44,773

-1,519

-3.28

Birla Sun Life Mutual Fund

34,704

35,906

1,202

3.46

SBI Mutual Fund

29,493

29,179

-314

-1.06

Franklin Templeton Mutual Fund

29,902

26,842

-3,059

-10.23

Tata Mutual Fund

20,205

19,679

-526

-2.60

Kotak Mahindra Mutual Fund

20,968

18,071

-2,897

-13.82

DSP Merrill Lynch Mutual Fund

19,139

16,675

-2,463

-12.87

SCHEMES 1. A. EQUITY/GROWTH SCHEMES The aim of growth funds is to provide capital appreciation over the medium to long- term. Such schemes normally invest a major part of

their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their preferences. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the options at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time. 1. B. DEBT/INCOME SCHEMES The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, Government securities and money market instruments. Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to increase in the short run and vice versa. However, long term investors may not bother about these fluctuations. 1. C. SECTOR SPECIFIC SCHEMESThese are the funds/schemes which invest in the securities of only those sectors or industries as specified in the offer documents. E.g. Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance of the respective sectors/industries. While these funds may give higher returns, they are more risky compared to diversified funds. Investors need to keep a watch on the performance of those sectors/industries and must exit at an appropriate time. They may also seek advice of an expert. PRODUCTS FOLLOWING ARE SOME OF THE SCHEMES LAUNCHED BY RELIANCE MUTUAL FUND: Reliance Growth Fund (September 1995) Reliance Income Fund (December 1997) Reliance Medium Term Fund (August 2000) Reliance Gilt Securities Fund (July 2003) Reliance Monthly Income Plan (December 2003) Reliance Pharma Fund ( May 2004) Reliance Media & Entertainment Fund Reliance Vision Fund (September 1995) Reliance Liquid Fund (March 1998) Reliance Short Term Fund (December 2002) Reliance Banking Fund (May 2003) Reliance Diversified Power Sector Fund (March 2004) Reliance Floating Rate Fund (August 2004) Reliance NRI Equity Fund

(September 2004) Reliance NRI Income Fund (October 2004) Reliance Equity Opportunities Fund (February 2005) Reliance Liquidity Fund (June 2005) Reliance Fixed Tenor Fund (November 2005) Reliance Fixed Horizon Fund I (August 2006) Reliance Fixed Horizon Fund III (March 2007) Reliance Liquid Plus Fund (March 2007) Reliance Long Term Equity Fund (Nov 2006) Reliance Fixed Horizon Fund IV (August 2007) INVESTMENT OBJECTIVES a) RELIANCE MONTHLY INCOME PLAN

(October 2004) Reliance Index Fund (February 2005) Reliance Regular Savings Fund (May 2005) Reliance Tax Saver (ELSS) Fund (July 2005) Reliance Equity Fund (February 2006) Reliance Fixed Horizon Fund (April 2006) Reliance Fixed Horizon Fund II (November 2006) Reliance Long Term Equity Fund (November 2006) Reliance Interval Fund (March 2007) Reliance Fixed Horizon Fund V (September 2007)

It aims to generate regular income in order to make regular dividend payments to unit holders and the secondary objective is growth of capital. b) RELIANCE INCOME FUND It aims to generate optimal returns consistent with moderate levels of risk. This income may be complemented by capital appreciation of the portfolio. Accordingly, investments shall predominantly be made in Debt and Money Market Instruments. c) RELIANCE MEDIUM TERM FUND It aims to generate regular income in order to make regular dividend payments to unit holders and the secondary objective is growth of capital. d) RELIANCE LIQUID FUND It aims to generate optimal returns consistent with moderate levels of risk and high liquidity. Accordingly, investments shall predominantly be made in Debt and Money Market Instruments.

e) RELIANCE LIQUIDITY FUND It aims to generate optimal returns consistent with moderate levels of risk and high liquidity. Accordingly, investments shall predominantly be made in Debt and Money Market Instruments. f) RELIANCE SHORT TERM FUND It aims to generate stable returns for investors with a short term investment horizon by investing in fixed income securities of a short term maturity. g) RELIANCE GILT SECURITIES FUND It aims to generate optimal credit risk free returns by investing in a portfolio of securities issued and guaranteed by the Central Government and State Governments h) RELIANCE FLOATING RATE FUND It aims to generate regular income through investment in a portfolio comprising substantially of Floating Rate Debt Securities (including floating rate securitized debt and Money Market Instruments and Fixed Rate Debt Instruments swapped for floating rate returns). i) RELIANCE REGULAR SAVINGS FUND DEBT OPTION The primary investment objective of this plan is to generate optimal returns consistent with moderate level of risk. This income may be complemented by capital appreciation of the portfolio. Accordingly investments shall predominantly be made in Debt & Money Market Instruments. j) RELIANCE REGULAR SAVINGS FUND EQUITY OPTION The primary investment objective is to seek capital appreciation and or consistent returns by actively investing in equity / equity related securities. k) RELIANCE REGULAR SAVINGS FUND HYBRID OPTION The primary investment objective is to generate consistent return by investing a major portion in debt & money market securities and a small portion in equity & equity related instruments. l) RELIANCE GROWTH FUND It aims to achieve long term growth of capital by investment in equity and equity related securities through a research based investment approach. m) RELIANCE VISION FUND It aims to achieve long term growth of capital by investment in equity and equity related securities through a research based investment approach. n) RELIANCE EQUITY OPPORTUNITIES FUND It aims to generate capital appreciation & provide long term growth opportunities by investing in a portfolio constituted of equity securities & equity related securities.

o) RELIANCE BANKING FUND

It aims to generate continuous returns by actively investing in equity / equity related or fixed income securities of banks. p) RELIANCE DIVERSIFIED POWER SECTOR FUND It seek to generate consistent returns by investing in equity / equity related or fixed income securities of Power and other associated companies. q) RELIANCE PHARMA FUND It aims generate consistent returns by investing in equity / equity related or fixed income securities of Pharma and other associated companies. r) RELIANCE MEDIA & ENTERTAINMENT FUND It aims to generate consistent returns by investing in equity / equity related or fixed income securities of media & entertainment and other associated companies. s) RELIANCE INDEX FUND-SENSEX PLAN It aims to replicate the composition of the Sensex, with a view to endeavor to generate returns, which could approximately be the same as that of Sensex. t) RELIANCE INDEX FUND-NIFTY PLAN It aims to replicate the composition of the Nifty, with a view to endeavor to generate returns, which could approximately be the same as that of Nifty. u) RELIANCE NRI EQUITY FUND AIMS It to generate optimal returns by investing in equity and equity related instruments primarily drawn from the Companies in the BSE 200 Index. v) RELIANCE EQUITY FUND The primary investment objective of the scheme is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio constituted of equity & equity related securities of top 100 companies by market capitalization & of companies which are available in the derivatives segment from time to time and the secondary objective is to generate consistent returns by investing in debt and money market securities. w) THE MUTUAL FUND ABOUT RELIANCE MUTUAL FUND Reliance Mutual Fund (RMF) has been established as a trust under the Indian Trusts Act, 1882 with Reliance Capital Limited (RCL), as the Settler /Sponsor and Reliance Capital Trustee Co. Limited (RCTCL), as the Trustee.

RMF has been registered with the Securities & Exchange Board of India (SEBI) vide registration number MF/022/95/1 dated June 30, 1995. The name of Reliance Capital Mutual Fund has been changed to Reliance Mutual Fund effective 11th. March 2004 vide SEBIs letter no. IMD / PSP / 4958 / 2004 date 11th. March 2004. Reliance Mutual Fund was formed to launch various schemes under which units are issued to the Public with a view to contribute to the capital market and to provide investors the opportunities to make investments in diversified securities. MAIN OBJECTIVE OF THE TRUST To carry on the activity of a Mutual Fund as may be permitted at law and formulate and devise various collective Schemes of savings and investments for people in India and abroad and also ensure liquidity of investments for the Unit holders; To deploy Funds thus raised so as to help the Unit holders earn reasonable returns on their savings andTo take such steps as may be necessary from time to time to realize the effects without any limitation. SOCIAL RESPONSIBILITIES Organizations, like individuals, depend for their survival, sustenance and growth on the support and goodwill of the communities of which they are an integral part, and must pay back this generosity in every way they can.This ethical standpoint, derived from the vision of the founder, lies at the heart of the CSR philosophy of the Reliance Group. While they strongly believe that their primary obligation or duty as corporate entities is to their shareholders they are just as mindful of the fact that this imperative does not exist in isolation; it is part of a much larger compact which they have with their entire body of stakeholders: From employees, customers and vendors to business partners, eco-system, local communities, and society at large. They evaluate and assess each critical business decision or choice from the point of view of diverse stakeholder interest, driven by the need to minimize risk and to pro-actively address long-term social, economic and environmental costs and concerns. For them, being socially responsible is not an occasional act of charity or that one-time token financial contribution to the local school, hospital.

CONCLUSION
A mutual fund is a financial institution that receives money from different investors. Mutual funds are managed by professional fund managers, who manages the funds of individuals and institution, which may not have such high degree of expertise or knowledge. Thus realizing the necessity of the performance appraisal of various mutual funds schemes in the present scenario, comparative study of selected mutual funds schemes (equity schemes) with reliance mutual funds has been undertaken.

 In this study large cap equity diversified schemes have been taken. It can be seen from the above that in case of large cap funds reliance vision fund is giving average risk but it is giving highest returns This shows that the fund manager of this fund is able to manage the portfolio of this fund in a good manner. He is able to control the controllable risk so that the fund can generate high returns. HDFC top 200 fund is the fund with least risk but this fund is giving average return so it does not match the condition of low risk- low return condition. Birla advantage fund is giving low risk and low return. This is true fund which matches low risk low return condition. Franklin blue chip fund is giving high risk and above average return among all the selected funds ICICI prudential is an exception to this condition of high risk and high return among large cap funds. HDFC growth fund is giving low risk among all the selected funds but it is not giving low return, it cannot be covered in low risk- low return parameter. Birla mid cap fund is giving average risk and average return among all the funds.

SUGGESTIONS AND RECOMMENDATIONS

In the study it is observed that mutual funds have great potential in Indian market. Only small % of population invests their money in mutual funds. So in order to attract more investors following recommendation should be taken care off: More awareness among the people must be created about the mutual funds. There should be better communication channels through which they can get to know about

different schemes and funds. Service Marketing For increasing the clients provide them best service you can give and provide them all kind of facilities which can attract them and they invest more. Promotional strategies at investors level are also very important because once a client enters into the market for his lifetime a company flashes its first impression as the last impression. The people do not want to take risk. The AMC should launch more diversified funds so that the risk minimizes. This will lure more and more people to invest in mutual funds. Entry load usually varies from 2 to 2.25%. Therefore, a few no load based funds should be introduced. Thus, it would attract more and more customers for the industry and lead to its expansion.