A Project Report On Different Schemes of Mutual Funds and Their Comparative Analysis

Track Record of the Different Schemes of Mutual funds and their comparative analysis
EXECUTIVE SUMMARY:
Primary investment objective of an individual or organization is to maximize the returns and minimizing Market risk through effective diversification. Mutual funds have become latest buzz word for the average person to invest their money. It is said that the bank investment is the first priority of people to invest their savings and next and safer investment place is in mutual funds. A Mutual fund pools resources from thousands of investors and then diversifies its investment into many different holdings such as in stocks ,bonds/debt instruments, Government securities etc. in order to provide more safer and relatively high returns as compared with Fixed deposits etc. The Project is basically FINANCE PROJECT which tries to explain in laymans language about the history, growth and pros & cons of investing in mutual funds. In the second part of this project it will cover the detailed track record of the three Mutual fund schemes such as : Franklin Blue chip Fund ICICI Prudential Power and HDFC capital builder fund. And also comparative analysis of these funds with their respective benchmark indices. The main reason for selecting these three schemes is : All three schemes incepted in the year 1994 and since then they are in market , it will give me an opportunity to take in depth 15 year track records with market performance and also to know how these funds performed during market crash/ups and downs of the market movement.
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Topic of the study:

Main Objective of the Project:

Understanding the Concept of Mutual funds, and comparative analysis of three Mutual fund schemes
Sub Objectives:
1. Study the Mutual fund industry in India 2. Analyzing the performance of three funds since 1994. 3. To study the performance of schemes compared to their respective benchmark. 4. To study the risk involved in these 3 schemes compared to their Benchmark.
Research Design:
Descriptive research is study of existing facts to a conclusion. In this research I will make an attempt to analyze the performance of the funds and also how much risk associated with them.
Methodology: Primary data: Secondary Data:

1. Materials Provided by Organization like [1] Research reports 2. Business Magazines like [1] Mutual funds insight [2] Money Today etc. 3. Internet.: www.bseindia.com www.nseindia.com www.valueresearch.com etc. [2] Monthly fact sheets Discussion with company Guide and with other officials,
Benefits of the study:

1. This study will help us to know the workings and concept of Mutual funds. 2. this research helps to find how much return can earned by investing in Mutual funds as compared with FD 3. It will also help to convince the others regarding how Mutual Funds re better risk adjusted as compared with direct investment through shares. 4. and finally it will give Picture about how these three funds [Franklin Bluechip,ICICI Prudential power,HDFC capital builder fund] performing over last 15 years. Limitations: Main Limitation is that in this project we are only considering three schemes of mutual funds, and another limitation is data availability/collection is very tedious
FINDINGS OF THE PROJECT ARE: Among these three funds more popular among investors is Franklin blue chip fund. Both Franklin blue chip fund and ICICI pru power fund faced problems during 2000 and 2001 main reasons are: 1.Ketan Pareks case and 2.September 11th attack on US WTO
HDFC capital Builder fund faced crucial period during 2006, main reason was its portfolio then mainly consisting of FMCG companies and in that year they drastically came down.
Among these three funds highest Beta is of Franklin i.e 0.96,lowest is of HDFC capital builder fund and sharp ratio high in case of Franklin and low in case of HDFCCB fund .
ICICI Pru Powers performance is more or less is stable even if we see its BETA,Alpha,Sharp ratio and average returns also good i.e 2.86.
Average Return is high in case of HDFC CB Fund i.e 3.04 Franklin blue-chip fund once upon a time it was considered to be as star in mutual funds but due to high market volatility in the year 2006 and 2007 but now from 2008 January on words it could salvage some of its lost pride because of comparatively low volatility in Blue chip stocks
SUGGESTION/RECOMMENDATON TO INVESTORS: By the study and analysis of the mutual fund industry it will be better to suggest that even though mutual funds are subject to risk but they are better risk adjusted as compared with stocks, from last five years it has become a buzz word for investment main reason it is useful in case of getting tax reductions etc. If a person wants to earn more as compared to Bank FD where possible returns are just 10-12% where as in mutual fund minimum is around 15-20% mutual funds are good option compared with stock market . If person does not want to take much risk then he can invest in the funds like HDFC Capital builder fund because as we have already seen in returns chart, compared with other two funds(Franklin blue-chip and ICICI power).that it has given constant returns in shorter period of time, with less BETA and arithmetic mean return is also high If a person is more interested and ready to take risk then the Franklin Blue-chip fund will the good option. By looking at its BETA and SD Risk both are high but if person invest in this fund for more than 4 years he will get returns around 35%.
Mutual funds
The concept:
In earlier times 'direct' was the only investment vehicle available. If we wanted to buy fixed deposit/bond we had to apply on our own. Similarly, when we wanted to buy shares, we had to call up stock brokers, who would procure shares on our behalf and same was the case with property. The cost involved in 'direct' buying is least amongst all investment vehicles. However we need to have skills and time to use this form of investing. Another investment vehicle is a mutual fund. Mutual fund works on the concept of pooling in money. Assume there are 5 to 6 friends who want to invest money in a particular asset class say equity. Also assume they do not have skills and time. However one of them knows an expert who regularly invests in stock markets. All these friends go to an expert and give him their investment amount. The expert invests on their behalf. If there is profit in investment, they all benefit and if there is any loss they suffer. Experts get certain fee for investing on their behalf. This is the concept of a mutual fund. Investing in mutual fund is slightly expensive than "direct" form of investing. However the decision-making and procedure of investing is transferred to the Mutual Fund Company. Insurance as an investment vehicle works somewhat similar to mutual fund, while traditional insurance plans invest only in debt-based products and are not market linked. A vehicle for investing in stocks and bonds A mutual fund is not an alternative investment option to stocks and bonds, rather it pools the money of several investors and invests this in stocks, bonds, money market instruments and other types of securities.Buying a mutual fund is like buying a small
slice of a big pizza. The owner of a mutual fund unit gets a proportional share of the funds gains, losses, income and expenses.
Each mutual fund has a specific stated objective The funds objective is laid out in the fund's prospectus, which is the legal document that contains information about the fund, its history, its officers and its performance Fund Objective What the fund will invest in Equity (Growth) Only in stocks Debt (Income) Only in fixed-income securities Money Market (includingIn short-term money market instruments (including government Gilt) Balanced securities) Partly in stocks and partly in fixed-income securities, in order to maintain a 'balance' in returns and risk Managed by an Asset Management Company (AMC) The company that puts together a mutual fund is called an AMC. An AMC may have several mutual fund schemes with similar or varied investment objectives. The AMC hires a professional money manager, who buys and sells securities in line with the fund's stated objective. All AMCs Regulated by SEBI, Funds governed by Board of Directors The Securities and Exchange Board of India (SEBI) mutual fund regulations require that the funds objectives are clearly spelt out in the prospectus. In addition, every mutual fund has a board of directors that is supposed to represent the shareholders' interests, rather than the AMCs.
For small and medium investor who does not have skills and time mutual fund seems the best option. Currently in India we have mutual funds, which invest mainly in two asset classes, debt and equity. And now many mutual fund companies also investing in real estate, infrastructure projects, natural energy resources etc.
Mutual funds concept can be well understood with the following diagram:
INVEST THEIR MONEY I N V E S T O R S
M U T U A L F U N D S C H E M E S
INVEST IN VARIETY OF STOCKS/BONDS
M A R K E T F L U C T U A TI O N
PROFIT/LOSS FROM PORTFOLIO INVESTMENT
PROFIT/LOSS FROM INDIVIDUAL INVESTMENT
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Benefits through investing in Mutual funds:

Professional Money Management: Fund managers are responsible for implementing a consistent investment strategy that reflects the goals of the fund. Fund managers monitor market and economic trends and analyze securities in order to make informed investment decisions. Diversification: Diversification is one of the best ways to reduce risk Mutual funds offer investors an opportunity to diversify across assets depending on their investment needs Liquidity: Investors can sell their mutual fund units on any business day and receive the current market value on their investments within a short time period (normally three- to five-days Affordability: The minimum initial investment for a mutual fund is fairly low for most funds (as low as Rs500 for some schemes). Convenience: Most private sector funds provide you the convenience of periodic purchase plans, automatic withdrawal plans and the automatic reinvestment of interest and dividends. Mutual funds also provide you with detailed reports and statements that make record-keeping simple. You can easily monitor the performance of your mutual funds simply by reviewing the business pages of most newspapers or by using our section in Investors Mall. Flexibility and variety: You can pick from conservative, blue-chip stock funds, sectoral funds, funds that aim to provide income with modest growth or those that take big risks in the search for returns. You can even buy balanced funds, or those that combine stocks and bonds in the same fund.
Mutual Funds
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Tax benefits on Investment in Mutual Funds: 1) 100% Income Tax exemption on all Mutual Fund dividends 2) Capital Gains Tax to be lower of 10% on the capital gains without factoring indexation benefit and 20% on the capital gains after factoring indexation benefit. 3) Open-end funds with equity exposure of more than 50% are exempt from the payment of dividend tax for a period of 3 years from 1999-2000.
Disadvantages of Mutual Funds:

No Control Over the costs No tailor made portfolios
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INDUSTRY OVERVIEW A little history:

Mutual funds made an opening in India in 1963 under the enactment f Unit Trust of India (UTI), which came out with is debut scheme named US-64, an open ended scheme n, which is operating till date. Up to 1986-87 it had launched 20 schemes, mobilizing net resources amounting to Rs. 4564 crores.for these 23 long years up to 1987 UTI enjoyed complete monopoly of the unit trust business in India. It remained one and the only mutual fund in India. as the next logical step, public sector banks and financial institutions were allowed to float mutual funds and their success emboldened the government to allow the private sector to foray into this area. The initial years of the industry also saw the emerging years of the Indian equity market, when a number of mistakes were made and hence the mutual fund schemes, which invested in lesser-known stocks and at very high levels, became loss leaders for retail investors. From those days to today the retail investor, for whom the mutual fund is actually intended, has not yet returned to the industry in a big way. But to be fair, the industry too has focused on brining in the large investor, so that it can create a significant base corpus, which can make the retail investor feel more secure.
Ups & Downs of Mutual fund Industry In India

Ten years ago, close-end funds were the order of the day. Most debt funds offered assured returns. And even equity funds managed to convey the impression of fixed returns by sporting calling themselves "Triple Plus" and "Double Square Plus". Equity funds were largely judged by their dividends, rights and bonus offers, rather than by the returns. The mutual fund industry has lived through its share of crises of confidence over the past ten years. And there are still grey areas. But the regulatory framework, disclosure norms
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and service standards have all changed beyond recognition, making mutual funds one of the most investor-friendly avenues available today.
Private sector plays:

When the first crop of private sector-sponsored mutual funds (such as Kothari Pioneer, 20th Century Finance and Apple Finance) debuted in 1993-94, they had a difficult time weaning investors away from the Unit Trust of India and the public sector bank-sponsored funds. The bull market of 1994 and the subsequent IPO boom changed all this. With retail investors tasting the power of the equity, a spate of private equity funds made their debut in 1994-95. Funds such as the Apple Midas the Goldshare and Morgan Stanley Growth Fund drew retail investors in large numbers. Unfortunately, as the IPO bubble burst, and the equity market went into a slide, so did the NAV of the equity funds launched in the bull market. But the important development during this period was the emergence of open-end funds, which offered on-tap liquidity to their investors and raised the bar on NAV and portfolio disclosures. The second coming: After the upsets of 1994-95, it was a slow and painstaking recovery for the private sector funds. In the five years that followed, many more private sector funds threw their hat into the ring, some of them big global names such as Alliance Capital, the Templeton group, Newton and Principal Financial. With a lull in the equity market, fund houses spent this period expanding their portfolio of debt offerings. Alongside the plain-vanilla debt funds, came the gilt, liquid, cash funds and
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treasury management plans, to cater to high net worth and corporate investors. There was also a slew of balanced and hybrid fund launches. During this period, assured return schemes from the UTI and the bank-sponsored funds were buffeted by controversy, after some reneged on promises. This was followed by the crisis in US-64. These events helped drive the concept of market-linked returns firmly into the minds of investors. And this put private sector fund houses firmly back on the radar screens of investors. Restructuring pays off: The years from 1996 to 1998 saw equity funds restructuring their portfolios and piling them up with FMCG, pharma and infotech stocks. By end-1999, the secular bull run, led by the IT stocks, had helped many an equity fund build an impressive record of performance. But this "second coming" of equity funds was also to end in disappointment. The newfound fancy for equity saw the rollout of a slew of technology funds at the height of the bull markets in 2000. When these crashed, some of the goodwill painstakingly built by the equity funds also took a beating. Debt in fashion: But, by then, private sector fund houses had managed to build up a strong performance track record in their debt products. Helped by the secular decline in interest rates and a basket of innovative offerings, mutual funds managed to deliver returns that were substantially higher than what was available from alternative savings avenues such as fixed deposits. This led to a large-scale migration of assets to debt-oriented mutual funds. By 2003, private sector mutual funds had wrested a lion's share of the mutual fund assets from the UTI and the PSU bank-sponsored funds. By end-December 2003, the mutual fund industry was managing Rs 1,40,000 crore of assets, with 80 per cent of it in private sector funds.
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Swept by consolidation: The years from 1999-2003 saw a considerable churn in the industry. With competition intensifying, the weaker players were taken over. There was also a coming together of some of the larger fund houses.
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The takeover of the Kothari Pioneer funds by the Franklin Templeton group and the Zurich funds by the HDFC group are instances. A few fund houses saw their foreign partners pull out, only to be replaced by new ones. Over the past couple of years, some of the big global names in financial services HSBC, Grindlays and Deutsche Bank have made an entry into the Indian fund arena. With US fund behemoth Fidelity now readying to enter the Indian market, the industry, at long last, appears to be reaching maturity. Regulations stay in tune: Regulations have kept pace with the rapid changes in the industry structure over the past decade. Both the offer documents and the financial statements of mutual funds have been simplified over the years. Half-yearly portfolio and financial disclosures have been made compulsory. Stringent investment norms have been put in place to prevent concentration and reduce exposure to illiquid and thinly traded securities. Disclosure requirements have been finetuned to reveal more about the pattern of ownership in a fund, and transactions with related and group companies. SEBI recently trained its sights on reforming the distribution and selling side of the mutual fund business. Healthy competition: Intensifying competition has ensured that the fund houses have kept two jumps ahead of the regulatory requirements, at least on disclosures and service standards. Daily NAV is now a standard feature with funds, and transaction-processing times have been compressed to less than 48 hours. Many funds have moved to a monthly disclosure of portfolios. Dissemination of information has leapfrogged with the use of websites for routine disclosures. Value-added services such as systematic investment plans, switch options, cheque-writing facilities, and call centre services promise to improve the investing experience for investors.
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Savvy investors: As the equity market pauses after the secular bull run of 2003, equity funds appear to be back in the investors' good books. Hybrid products such as the MIPs (Monthly Income Plans) and equity funds have attracted sizeable inflows in the recent months. Is this a sign that retail investors are finally beginning to channel their investments in equities through mutual funds? Or, are they, yet again, falling into the age-old trap of jumping onto the bandwagon, in the late stages of a stock market rally? It is early days yet to say which of these is true. But there are a couple of positive signals from the pattern of fund flows in the recent months. For one, inflows have been pretty selective, a sign that investors are tracking fund performance far more closely than before. Second, outflows from equity funds have also been rising, which suggests that investors are selling out when their target returns are met. These are signs that mutual fund investors may be on to the two crucial skills for successful investing a sense of timing and investment discipline; and that, too, at the same time. Basis on which Mutual funds are compared : Choosing a mutual fund seems to have become a very complex affair lately. There are no dearth of funds in the market and they all clamor for attention. The most crucial factor in determining which one is better than the rest is to look at returns. Returns are the easiest to measure and compare across funds. At the most trivial level, the return that a fund gives over a given period is just the percentage difference between the starting Net Asset Value (price of unit of a fund) and the ending Net Asset Value.
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Returns by themselves don't serve much purpose. The purpose of calculating returns is to make a comparison. Either between different funds or time periods. And, you must be careful not to make a mistake here. Or else, you could end up investing in the wrong funds. Absolute returns Absolute returns measure how much a fund has gained over a certain period. So you look at the NAV on one day and look at it, say, six months or one year or two years later. The percentage difference will tell you the return over this time frame. But when using this parameter to compare one fund with another, make sure that you compare the right fund. To use the age-old analogy, don't compare apples with oranges. So if you are looking at the returns of a diversified equity fund (one that invests in different companies of various sectors), compare it with other diversified equity funds. Don't compare it with a sector fund which invests only in companies of a particular sector. Don't even compare it with a balanced fund (one that invests in equity and fixed return instruments). Benchmark returns This will give you a standard by which to make the comparison. It basically indicates what the fund has earned as against what it should have earned. A fund's benchmark is an index that is chosen by a fund company to serve as a standard for its returns. The market watchdog, the Securities and Exchange Board of India, has made it mandatory for funds to declare a benchmark index. In effect, the fund is saying that the benchmark's returns are its target and a fund should be deemed to have done well if it manages to beat the benchmark. Let's say the fund is a diversified equity fund that has benchmarked itself against the Sensex.
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So the returns of this fund will be compared vis-a-viz the Sensex. Now if the markets are doing fabulously well and the Sensex keeps climbing upwards steadily, then anything less than fabulous returns from the fund would actually be a disappointment. If the Sensex rises by 10% over two months and the fund's NAV rises by 12%, it is said to have outperformed its benchmark. If the NAV rose by just 8%, it is said to have underperformed the benchmark. But if the Sensex drops by 10% over a period of two months and during that time, the fund's NAV drops by only 6%, then the fund is said to have outperformed the benchmark. A fund's returns compared to its benchmark are called its benchmark returns. At the current high point in the stock market, almost every equity fund has done extremely well but many of them have negative benchmark returns, indicating that their performance is just a side-effect of the markets' rise rather than some brilliant work by the fund manager. Time period The most important thing while measuring or comparing returns is to choose an appropriate time period. The time period over which returns should be compared and evaluated has to be the same over which that fund type is meant to be invested in. If you are comparing equity funds then you must use three to five year returns. But this is not the case of every other fund. For instance, cash funds are known as ultra short-term bond funds or liquid funds that invest in fixed return instruments of very short maturities. Their main aim is to preserve the
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principal and earn a modest return. So the money you invest will eventually be returned to you with a little something added. Investors invest in these funds for a very short time frame of around a few months. So it is alright to compare these funds on the basis of their six month returns. Market conditions It is also important to see whether a fund's return history is long enough for it to have seen all kinds of market conditions. For example, at this point of time, there are equity funds that were launched one to two years ago and have done very well. However, such funds have never seen a sustained declining market (bear market). So it is a little misleading to look at their rate of return since launch and compare that to other funds that have had to face bad markets. If a fund has proved its mettle in a bear market and has not dipped as much as its benchmark, then the fund manager deserves a pat on the back.
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TYPES OF MUTUAL FUNDS: two categories. They are
Mutual fund schemes can be broadly classified in to
PORTFOLIO CLASSIFICATION OPERATIONAL CLASSIFICATION
MUTUAL FUND SCHEME Portfolio classification Return based Income scheme Growth scheme Conservative scheme Open-ended scheme operational classification
Investment based Equity scheme Bond scheme Balanced structure
Sector based Real Estate schemes Industry specific Other scheme Closed ended scheme
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Leveraged Based Other schemes Gilt scheme Index funds Leveraged schemes Non-leveraged
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Operational schemes A) Open-ended schemes In these schemes, size of the fund is not predetermined as entry to or exit from the funds is open to investor who can buy or sell the securities to the fund at any time. This fund has greater liquidity to the funds along with the predetermined repurchase price based on the declared Net Asset Value. Portfolio mix of such schemes consists of actively traded securities in the market, preferably equity
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shares. As investors can anytime withdraw from the fund, therefore the management of such funds is quiet tedious. B) Closed ended schemes This scheme has deposits redemption date unlike openended schemes. These funds have fixed capital base and are traded among the investors among the secondary market. the forces of demand and supply hence determine their price. Price is free to deviate from its net asset value. Management of such fund is comparatively easier because manager can evolve long term investment plans depending upon the life of the scheme. Within these two broad operational classification there are following classification being made. RETURN BASED CLASSIFICATION Income funds: These are for the investors who are more concerned about regular returns from their investment. Growth funds: The main objective of this fund is to achieve an increase in value of investment through capital appreciation and not the regular income.
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Conservative funds: These funds aim at giving reasonable rate of return in addition to capital appreciation. Investment based classification: Equity funds :These funds invest in the equity shares of companies and undertake greater risk associated with it. This gives good rate of return in rising market. Bond funds: These funds provide greater security to investors by investing in bonds, debenture, etc. investment here has no capital appreciation. Balanced funds: These funds are a combination of both debt and equity .trends in market will determine which proportion of the mix is to be determined. Sector based classification: These funds or the schemes that invest in the securities of only those sectors or industries as specified in the offer documents.eg pharmaceuticals, software, fast moving consumer goods (FMCG), petroleum stocks etc. the returns on these funds or the schemes depends on the performance of that particular sector/industries. These schemes may give the higher returns but are very risky compared to diversified funds. Investors need to keep an eye on the performance of these of these sectors and should exit on an appropriate time. Leverage based classification:In this type of fund or scheme investment is made by borrowing money from the market and making investment in fund there by making leverage benefits available to mutual fund investor, i.e. giving good returns to the investors from the income earned by investing borrowed funds. Index-based classification :Index funds replicate the portfolio of a particular index such as the BSE sensitive index, S&P NSE 50 index (nifty). These schemes invest in the securities in the same weight age comprising of an index. NAVs of such schemes would rise or fall in accordance with the rise or fall in the index, through not exactly by the
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same by the same percentage due to some factors. Necessary disclosure in this regard is made in offer document of the mutual fund schemes. There are also exchange traded index funds launched by the mutual funds that are traded on the stock exchanges. GILT-FUND:These funds invest exclusively in government securities. Government securities have no default risk .NAVs of these schemes also fluctuate due to change in interest rates and other economic factors as are the case with income or debt oriented schemes. DIFFERENT TYPES OF PLANS THE MUTUAL FUND OFFERS Mutual fund offers different types of plans to its investors. they are as follows. 1. GROWTH PLAN Under growth plan the investor realizes only the capital appreciation on the investment and does not get any income in the form of dividend. 2. INCOME PLAN Under income plan, the investor realizes income in the form of dividend. However, his NAV will all to the extent of the dividend. 3. DIVIDEND RE-INVESTMENT PLAN Here the dividend accrued on the mutual funds is automatically re-invested in the purchasing additionally units in the open ended funds. In most cases mutual funds offer the investor an option of collecting dividends or re-investing the same.
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4. SYSTEMATIC INVESTMENT PLAN In this type of plan the investor is given the option of preparing a predetermined number of post dated cheques in favour of the fund. He will get the units on the date of cheque at the existing NAV. For instances , if on the 5th March ,he has given a post dated cheque for June 5th 2006, he will get units on 5th June 2006 at the existing NAV. 5. SYSTEMATIC WITHDRAWAL PLAN As opposed to SIP, the systematic withdrawal plan allows the investor the facility to withdraw predetermined amount/units from his fund at a pre-determined interval. The investors units will be redeemed at the existing NAV as on that day. The unit holder may set-up a systematic Withdrawal plan on a monthly, quarterly or semi annually or on a annual basis to redeem a fixed number of units or redeem enough units to provide a fixed amount of money. 6. employees. 7. INSURANCE PLANS: Some schemes launched by UTI and LIC offer insurance cover to investor. RETIREMENT PENSION PLAN Some schemes are linked with retirement
pension. Individuals participate in these plans for themselves, and corporate for their
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TAX SAVING SCHEMES These schemes offer tax rebates to the investors under specific provisions of the income tax act, 1961 as the government offers tax incentives for investment in specified avenues, eg: Equity Linked Saving Scheme (ELSS). Pension schemes launched by the mutual fund also offer tax benefits. These schemes are growth-oriented and invest pre-dominantly in equities. Their growth opportunities and risk associated are like any equity oriented scheme.
LOAD OR NO LOAD FUND A load fund is one that charges a percentage of NAV for entry or exit. That is, each time one buys or sells the units in the fund, a charge will be payable. This charge is used by the mutual fund for marketing and distribution expenses. Suppose the NAV per unit is Rs.10 .if the entry as well as exit load charge is 2% , then the investors who buy would be required to pay Rs.10.20 and those would want to repurchase must pay Rs.9.80 per unit. A no-load fund is the one that does not charge for entry or exit. It means the investors can enter the fund/scheme at NAV and no additional charges are payable on the purchase or sale of units.
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Terminologies Demystified
Asset Allocation Diversifying investments in different assets such as stocks, bonds, real estate, cash in order to optimize risk. Fund Manager The individual responsible for making portfolio decision for a mutual fund, in line with funds objective. Fund Offer Document Document with investment objectives, risk factors, expenses summary, how to invest etc. Dividend Profits given to the investor from time to time.
Growth Profits ploughed back into scheme. This causes the NAV to rise.
NAV Market value of assets of scheme minus its liabilities. = Net Asset Value
Per unit NAV
No. of Units Outstanding on Valuation date Entry Load/Front-End Load (0-2.25%) The commission charged at the time of buying the fund.
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To cover costs for selling, processing
Exit Load/Back- End Load (0.25-2.25%) The commission or charge paid when an investor exits from a mutual fund. Imposed to discourage withdrawals May reduce to zero as holding period increases.
Sale Price/ Offer Price Price you pay to invest in a scheme. May include a sales load. (In this case, sale price is higher than NAV)
Re-Purchase Price/ Bid Price Price at which close-ended scheme repurchases its units
Redemption Price Price at which open-ended scheme
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ASSOCIATION OF MUTUAL FUNDS IN INDIA[AMFI]

With increase in Mutual Fund players in India, a need for mutual fund association in India was generated to function as a non-profit organization. Association of mutual funds in India (AMFI) was incorporated on 22nd August, 1995. AMFI is an apex body of all Assets Management Companies (AMC) which has been registered with Security Exchange Board of India (SEBI) .till date all the AMCs are that have mutual fund schemes are its members. It functions under the supervision and guidelines of its board of Directors. Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a professional and a healthy market with the ethical lines enhancing and maintaining standards. It follows the principle of both protecting and promoting the interests of mutual funds as well as their unit holders. THE OBJECTIVES OF ASSOCIATION OF MUTUAL FUNDS IN INDIA The Association of Mutual Funds of India works with 30 registered AMCS of the country. It has certain defined objectives which juxtaposes the guidelines of its Board of Directors. The objectives are as follows. This Mutual Fund Association of India maintains high professional and ethical standards in all areas of operation of the industry. It also recommends and promotes the top class business practices and code of conduct which is followed by members and related people engaged in code of conduct of the association. activities of Mutual Fund and Assets Management. The agencies that are by any means connected or involved in this
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AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual fund industry.
Association of Mutual Fund of India do represent the government of India , the Reserve bank of India and other related bodies on matters relating to the Mutual Fund Industry.
It develops a team of well qualified and trained agent distributors. It implements a programme of training and certification for all intermediaries and other engaged in the Mutual Fund Industry. . AMFI undertakes all India awareness programme for investors in order to promote proper understanding of the concept and working of mutual funds. At last Association of mutual fund of India also disseminate information on mutual fund industry and undertakes studies and research either directly or in association with other bodies.
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The sponsors of Association of Mutual Funds in India. Bank sponsored 1) SBI Mutual management Ltd. 2) BOB asset management CO. Ltd. 3) Canbank Investment Management Services. Ltd 4) UTI Asset management Company Pvt, Ltd. Institution GIC Asset management Co.Ltd Jeevan Bima sahayog asset management Company.
PRIVATE SECTOR INDIAN Benchmark asset management company Cholamandalam Asset Management Co.Ltd Credit Capital Asset Management Co.Ltd Escorts Asset Management Ltd JM Financial Mutual fund Kotak Mahindra asset management company Reliance capital Asset management Ltd Sahara Asset management Co.Ltd Sundaram Asset management Co.Ltd Tata Asset Management Private Ltd
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Indian joint ventures Birla Sun life Asset management company DSP Merill Lynch Fund Managers company HDFC Asset management company
Predominantly Foreign Joint Ventures: ABN AMRO Asset Management (I) Ltd. Alliance Capital Asset Management (India) Pvt. Ltd. Deutsche Asset Management (India) Pvt. Ltd. Fidelity Fund Management Private Limited Franklin Templeton Asset Mgmt. (India) Pvt. Ltd. HSBC Asset Management (India) Private Ltd. ING Investment Management (India) Pvt. Ltd. Morgan Stanley Investment Management Pvt. Ltd. Principal Asset Management Co. Pvt. Ltd. Prudential ICICI Asset Management Co. Ltd. Standard Chartered Asset Mgmt Co. Pvt. Ltd. Association of Mutual Funds in India Publications: AMFI publishes mainly two types of bulletin. One is on the monthly basis and the other is quarterly. These publications are of great support for the investors to get intimation of the know how of their parked money.
SEBI REGULATIONS ON MUTUAL FUNDS

The Government brought Mutual Funds in the Securities market under the regulatory framework of the Securities and Exchange board of India (SEBI) in the year 1993.
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SEBI issued guidelines in the year 1991 and comprehensive set of regulations relating to the organization and management of Mutual Funds in 1993. SEBI REGULATIONS 1993 (20.1.1993) The regulations bar Mutual Funds from options trading, short selling and carrying forward transactions in securities. The Mutual Funds have been permitted to invest only in transferable securities in the money and capital markets or any privately placed debentures or securities debt. Restrictions have also been placed on them to ensure that investments under an individual scheme, do not exceed five per cent and investment in all the schemes put together does not exceed 10 per cent of the corpus. Investments under all the schemes cannot exceed 15 per cent of the funds in the shares and debentures of a single company. SEBI grants registration to only those mutual funds that can prove an efficient and orderly conduct of business. The track record of sponsors, a minimum experience of five years in the relevant field of Investment, financial services, integrity in business transactions and financial soundness are taken into account. The regulations also prescribe the advertisement code for the marketing schemes of Mutual Funds, the contents of the trust deed, the investment management agreement and the scheme-wise balance sheet. Mutual Funds are required to be formed as trusts and managed by separately formed as trusts and managed by separately formed Asset Management Companies (AMC). The minimum net worth of such AMC is stipulated at Rs.5 crores of which, the Mutual Fund should have a custodian who is not associated in any way with the AMC and registered with the SEBI. The minimum amount raised in closed-ended scheme should be Rs.20 Crores and for the open-ended scheme, Rs.50 Crores. In case, the amount collected falls short of the minimum prescribed, the entire amount should be refunded not later than six weeks from the date of Closure of the scheme. If this is not done, the fund is required to pay an interest at the rate of 15 per cent per annum from the date of expiry of six weeks. In
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addition to these, the Mutual Funds are obliged to maintain books of accounts and provision for depreciation and bad debts. Further, the Mutual Funds are now under the obligation to publish scheme-wise annual reports, furnish six month un-audited accounts, quarterly statements of the movements of the net asset value and quarterly portfolio statements to the SEBI. There is also a stipulation that the Mutual Funds should ensure adequate disclosures to the investors. SEBI has agreed to let the Mutual Funds buy back the units of their schemes. However, the funds cannot advertise this facility in their prospectus. SEBI is also empowered to appoint an auditor to investigate into the books of accounts or the affairs of the Mutual Funds. SEBI can suspend the registration of Mutual Funds in the case of deliberate manipulation, price rigging or deterioration of the financial position of Mutual Funds. SEBI REGULATIONS, 1996 SEBI announced the amended Mutual Fund Regulations on December 9, 1996 covering Registration of Mutual Funds, Constitution and Management of Mutual funds and Operation of Trustees, Constitution and Management of Asset Management Companies (AMCs) and custodian schemes of MFs, investment objectives and valuation policies, general obligations, inspection and audit. The revision has been carried out with the objective of improving investor protection, imparting a greater degree of flexibility and promoting innovation. The increase in the number of MFs and the types of schemes offered by them necessitated uniform norms for valuation of investments and accounting practices in order to enable the investors to judge their performance on a comparable basis. The Mutual Fund Regulations is sued in December 1996 provide for a scheme-wise report and justification of
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performance, disclosure of large investments which constitute a significant portion of the portfolio and disclosure of the movements in the unit capital. The existing Asset Management Companies are required to increase their net worth from Rs.10 crores within one year from the date of notification of the amended guidelines. AMCs are also allowed to do other fund-based businesses such as providing investment management services to offshore funds, other Mutual Funds, Venture Capital Funds and Insurance Companies. The amended guidelines retained the former fee structure of the AMCs of 1.25% of weekly average Net Asset Value (NAV) up to Rs.100 crores and 1% of NAV for net assets in excess of Rs.100 crores. The consent of the investors has to be obtained for bringing about any change in the fundamental attributes of the scheme on the basis of which the unit holders had made initial investments. The regulation empowers the investor. The amended guidelines require portfolio disclosure, standardization of accounting policies, valuation norms for NAV and pricing. The regulations also sought to address the areas of misuse of funds by introducing prohibitions and restrictions on affiliate transactions and investment exposures to companies belonging to the group of sponsors of mutual funds. The payment of early bird incentive for various schemes has been allowed provided they are viewed as interest payment of early bird incentive for early investment with full disclosure. The various Mutual Funds are allowed to mention an indicative return for schemes for fixed income securities. In 1998-99 the Mutual Funds Regulation were amended to permit Mutual Funds to trade in derivatives for the purpose of hedging and portfolio balancing. SEBI registered Mutual Funds and Fund managers are permitted to invest in overseas markets, initially within an overall limit of US $500 million and a ceiling for an individual fund at US$ 50 million. SEBI made (October 8, 1999) investment guidelines for MFs more stringent. The new guidelines restrict MFs to invest no more than 10% of NAV of a scheme in share or share
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related instruments of a single company. MFs in rated debt instruments of a single issuer is restricted to 15% of NAV of the scheme (up to 20% with prior approval of Board of Trustees or AMC). Restrictions in un- rated debt instruments and in shares of unlisted companies. The new norms also specify a maximum limit of 25% of NAV for any scheme for investment in listed group companies as against an umbrella limit of 25% of NAV of all schemes taken together earlier. SEBI increased (June 7, 2000) the maximum investment limit for MFs in listed companies from 5% to 10% of NAV in respect of open-ended funds. Changes in fundamental attributes of a scheme was also allowed without the consent of three fourths of unit holders provided the unit holders are given the exit option at NAV without any exit load. MFs are also not to make assurance or claim that is likely to mislead investors. They are also banned from making claims in advertisement based on past performance.
COMPANY PROFILE
The Kotak Mahindra Group
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Kotak Mahindra is one of India's leading financial conglomerates, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporates.
The group has a net worth of over Rs. 5,609 crore, employs around 17,100 people in its various businesses and has a distribution network of branches, franchisees, representative offices and satellite offices across 344 cities and towns in India and offices in New York, London, Dubai, Mauritius and Singapore. The Group services around 3.6 million customer accounts. Kotak Group Products & Services: 1. Bank 2. Life Insurance 3. Mutual Fund 4. Car Finance 5. Securities 6. Institutional Equities 7. Investment Banking 8. Kotak Mahindra International 9. Kotak Private Equity 10. Kotak Realty Fund
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KOTAK SECURITIES: Kotak Securities Ltd. 100 % subsidiary of Kotak Mahindra

Bank is one of the oldest and largest broking firms in the Industry with a market share of 8.5 % (as on 30th September).
Their offerings include stock broking through the branch and Internet, Investments in IPO, Mutual funds and Portfolio management service. Their Accolades include: Best Performing Equity Broker in India CNBC Financial Advisor Awards 2008 Avaya Customer Responsiveness Awards (2007) in Financial Services Sector Best Brokerage Firm in India by Asiamoney in 2007 The Leading Equity House in India in Thomson Extel Surveys Awards for the year 2007 Euromoney Award (2006 and 2007) - Best Provider of Portfolio Management: Equities Avaya Customer Responsiveness Awards (2006) in Financial Institution Sector Asiamoney Award (2006) - Best Broker in India Euromoney Award (2005) - Best Equities House in India Finance Asia Award (2005) - Best Broker in India Finance Asia Award (2004) - India's best Equity House Prime Ranking Award (2003-04) - Largest Distributor of IPO's They have been the first in providing many products and services which have now become industry standards. Some of them are: Facility of Margin Finance to the customers Investing in IPOs and Mutual Funds on the phone SMS alerts before execution of depository transactions
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Mobile application to track portfolios Auto Invest - A systematic investing plan in Equities and Mutual funds Provision of margin against securities automatically against shares in your Demat account They have a full-fledged research division involved in Macro Economic studies, Sectoral research and Company Specific Equity Research combined with a strong and well networked sales force which helps deliver current and up to date market information and news. They are also a depository participant with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL), providing dual benefit services wherein the investors can avail our brokerage services for executing the transactions and the depository services for settling them. They use to process more than 600000 trades a day which is much higher even than some of the renowned international brokers.
Their
network
spans
over
310
cities
with
867
outlets.
Kotak Securities Limited has over Rs. 4000 crore of Assets Under Management (AUM) as of 31st December, 2007. The portfolio Management Service provides top class service, catering to the high end of the market. Portfolio Management from Kotak Securities comes as an answer to those who would like to grow exponentially on the crest of the stock market, with the backing of an expert.
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ORGANIZATION STRUCTURE OF KOTAK SECURITIES
Chairman & MD
Vice-President
Regional Heads
North
South
East
west
State heads
State heads
State heads
State heads
Area managers
Area managers
Area managers
Area managers
BR Mgr
BR Mgr
BR Mgr
BR Mgr
RM
RM
RM
RM
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ANALYSIS PART OF THE PROJECT

Analysis part of the project starts from the detailed information about the funds selected that is as follows:
Franklin India Blue chip Fund

Objective: : Aims to achieve a high degree of capital appreciation through investments in wellestablished, large size blue chip companies Type: Open Ended diversified equity Scheme Bench mark:BSE sensex Inception: Nov 30, 1993 Minimum Investment (Rs:5000 Fund Manager: K. N. Siva Subramanian
ICICI Prudential Power

Objective: To generate capital appreciation through investments in equity related securities in core sectors and associated feeder industries.
HDFC capital builder fund

Objective: The fund plans to achieve capital appreciation in fixed period of time by investing predominantly in equity oriented securities Type: Open Ended diversified equity Scheme Bench mark: S&P CNX500 Inception: Dec 31, 1993 Min Investment:Rs 5000 Fund Manager: Chandresh Nigam
Type: Open Ended diversified equity Scheme Benchmark:S&P CNX Nifty Inception: Aug 24, 1994 Min Investment:Rs 5000 Fund Manager: Mr Anand Shah
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TRACK RECORD OF THE PROJECTS:Under this project we selected those funds that are introduced during the year 1993-94 As this was the year when major private sectors entered into mutual fund business, until that only the UTI enjoyed the monopoly in this industry. The main reason for this is to study and analyze the industry properly.
Franklin India Blue-chip Fund(G)
About Franklin Templeton Franklin Templeton is one of the largest* private sector fund houses in the country with over Rs.31,175 crores of assets under management for over 24 lakh investor accounts (as of December 31, 2007). It manages one of the most comprehensive ranges of mutual funds (48) catering to varied investor requirements and offering different investment styles to choose from. It has Offices in 33 cities and Collection Centres in another 46 locations across the country. Franklin Templeton Investments is one of the largest financial services groups in the world based at San Mateo, California USA. The group has US$ 647 billion in assets under management globally (as of November 30, 2007). Franklin Templeton has 60 years of experience in investment management and with offices in over 29 countries, provides investment management and advisory services to a client base of over 17.7 million unitholder accounts.
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Franklin Templeton Mutual Funds are managed by Franklin Templeton Investments - a global investment management major. Franklin Templeton started their India operations in 1996 as Templeton Asset Management India Pvt. Limited. It flagged off the mutual fund business with the launch of Templeton India Growth Fund in September 1996. Franklin Templeton Asset Management (India) Private Limited acts as the asset management company with Templeton holding a majority of 75 per cent of the equity.
Franklin India Blue chip Fund

Fund Details: Type of Scheme Open Ended Nature of Scheme Equity Inception Date Nov 30, 1993 Face Value(Rs/Unit) 10 Fund Size (Rs. in crores) 2471.4888 on Jan 31, 2008 Increase/Decrease since Dec 31, 2007 (Rs. -452.855 in crores) Previous Name Pioneer ITI Bluechip - Growth Minimum Investment (Rs) 5000 Purchase Redemptions Daily NAV Calculation Daily Fund Manager K. N. Siva Subramanian Entry Load Entry Load is 2.25%. Exit Load Exit Load is 0%. Objective: Aims to achieve a high degree of capital appreciation through investments in well-established, large size blue chip companies Scheme Performance (%) as on Mar 4 , 2008 14 days 1 month 3 months -7.81 -10.88 -17.43 Top 10 Holdings as on Jan 31, 2008 Company Babasabpatilfreepptmba.com 1 year 27.3 Nature 3 yrs* 32.4 Value (Cr.) Inception* 27.5 % 46
Reliance Industries Ltd Bharati Tele - Ventures Larsen & Toubro Limited Housing Development Finance Corporation Ltd Grasim Industries Ltd ICICI BANK LTD. Kotak Mahindra Bank Ltd. Infosys Technologies Ltd Aditya Birla Nuvo Limited. Bharat Heavy Electricals Ltd Top Industry Allocation as on Jan 31, 2008 Banks Oil & Gas, Petroleum & Refinery Engineering & Industrial Machinery Telecom Finance Computers - Software & Education Electricals & Electrical Equipments Auto & Auto ancilliaries Cement Textiles
EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ
185.99 169.46 169.3 156.39 138.59 131.75 123.94 120.31 103.9 98.04
7.53 6.86 6.85 6.33 5.61 5.33 5.01 4.87 4.2 3.97
13.5176% 12.172% 9.3138% 8.3178% 7.1913% 7.1902% 6.9137% 6.7521% 6.0963% 4.2038%
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Special Features: Easy liquidity : all transactions are processed within 3 working days. Pioneer ITI Bluechip - Growth changed to Franklin India Bluechip - Growth w.e.f Aug 30, 2002.
Asset Allocation as on Jan 31, 2008 Equity 96.54 Debt 0 Money Market 3.46
Best and worst performance: Best (Period) Month 41.78 (16/02/1994 - 18/03/1994) Quarter 55.99 (15/12/1998 - 16/03/1999) Year 199.42 (04/01/1999 - 04/01/2000) Worst (Period) -27.80 (12/05/2006 - 13/06/2006) -31.51 (22/02/2000 - 23/05/2000) -36.54 (15/09/2000 - 17/09/2001)
Relative performance [fund v/s Category wise]
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Fund Style:
Performance Analysis:
FRANKLIN INDIA Bluechip Fund--formerly Pioneer ITI Bluechip Fund--has been a top performer almost since its inception in October 1993. After the Franklin TempletonPioneer ITI merger in July 2002, the scheme is managed by Franklin Templeton Investments, but the equity fund management team is intact. K.N. Siva Subramanian is still the fund manager and Ravi Mehrotra continues as Chief Investment Officer. Allaying investors' fears about a change in fund management styles, Mehrotra says: "The stock picking style will remain, as that was a prerequisite demanded by Pioneer ITI while selling the funds."
FIBCF was launched as a three-year close-ended fund but was converted to an open-ended one in January 1997. The fund aims to provide medium to long-term capital appreciation by seeking steady and consistent growth from well-established large companies.
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Rating. Outlook Money has consistently ranked FIBCF among the top performing funds in the diversified equity category. The fund has a good performance track record and has delivered steady and consistent returns. In last five years, its CAGR (compounded annualised growth rate) has been 26.14 per cent; its three-year performance is 0.62 per cent, and one-year performance is 14.74 per cent.
Its benchmark index, BSE Sensex, on the other hand, has reported a pathetic -1.93 per cent for five years, -11.37 per cent for three years and -1.79 per cent for one year. In money terms, Rs 10,000 invested in FIBCF at inception (December 1, 1993) would have grown to Rs 52,270 as of today. In contrast, Sensex would have given a meagre Rs 9,808. By outperforming its benchmark index, FIBCF has proved (at least historically) that active funds can outperform index funds in long term.
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ICICI PRUDENTIAL POWER FUND

ABOUT ICICI PRUDENTIAL ICICI Prudential Asset Management Company enjoys the strong parentage of Prudential plc, one of UK's largest players in the insurance & fund management sectors and ICICI Bank, a well-known and trusted name in financial services in India. ICICI Prudential Asset Management Company, in a span of just over eight years, has forged a position of preeminence in the Indian Mutual Fund industry as one of the largest asset management companies in the country with assets under management of Rs. 37,906.24 crore (as of March 31, 2007). The Company manages a comprehensive range of schemes to meet the varying investment needs of its investors spread across 68 cities in the country. Sponsors ICICI Bank is India's second-largest bank with total assets of about Rs. 344,658 crores as at March 31, 2007 and profit after tax of Rs. 3,110 crores for the year ended March 31, 2007 (Rs. 2,540 crores for the year ended March 31, 2006). ICICI Bank has a network of about 710 branches and 45 extension counters and over 3,271 ATMs. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. ICICI Bank set up its international banking group in fiscal 2002 to cater to the cross border needs of clients and leverage on its domestic banking strengths to offer products internationally. ICICI Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in Singapore, Bahrain, Hong Kong, Sri Lanka and Dubai International Finance Centre and representative offices in the United States, United Arab Emirates, China, South Africa and Bangladesh. UK subsidiary of
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ICICI Bank has established a branch in Belgium. ICICI Bank is the most valuable bank in India in terms of market capitalisation. Headquartered in London, Prudential plc is a leading international financial services group, offering a significant portfolio of life insurance and fund management products in the United Kingdom, the United States, Asia and continental Europe.
Prudential plc is a leading international financial services group providing retail financial products and services and fund management to many millions of customers worldwide. As a group Prudential plc has, as of December 31, 2006, over GBP251 billion of funds under management, more than 20 million customers and over 23,000 employees worldwide as of December 31, 2006.In the United Kingdom Prudential is a leading life and pensions provider offering a range of retail financial products. M&G is Prudential's UK & European Fund Manager, with around 250 billion of funds under management (as of 31 December 2006). Jackson National Life, acquired by Prudential in 1986, is a leading provider of longterm savings and retirement products to retail and institutional customers throughout the United States. Egg provides banking, insurance and investment products through its Internet site www.egg.com. In Asia, Prudential is the leading financial services group with an extensive network of over 30 life insurance and 10 fund management operations spanning 13 diverse markets.
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ICICI PRUDENTIAL POWER MUTUAL FUND-G
ICICI Prudential Power, is an open-ended equity fund which does just that. The portfolio is made up of large-cap and mid-cap stocks, and is aimed at capturing the growth opportunities across multiple sectors in the market.
INVESTMENT PHILOSOPHY: ICICI Prudential Power follows a blend of top-down macro research to identify growth sectors and bottom-up fundamental research to identify stocks. It seeks to optimise riskadjusted return by building a portfolio of large and mid-cap stocks across select sectors. ICICI Prudential Power is a multi-sector fund focused on investing in carefully selected stocks offering optimum risk-adjusted return across select growth sectors. Investment objective: To generate capital appreciation by actively investing in equity/ equity related securities. For defensive considerations, the Scheme may invest in debt, money market instruments, to the extent permitted under the Regulations. The AMC will have the discretion to completely or partially invest in any of the type of securities stated above so as to maximize the returns.
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Benefits by investing in this fund:
ICICI Prudential Power offers the following key benefits: It gives you a core large-cap portfolio with some exposure to mid-cap stocks It provides you the edge as it seeks to capture the best sectoral opportunities in the market. Fund information Type of Scheme Nature of Scheme Inception Date Face Value(Rs/Unit) Fund Size (Rs. in crores) Increase/Decrease since 2008 (Rs. in crores) Rolled Over To Previous Name Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load Open Ended Equity Aug 24, 1994 10 1094.0721 on Mar 31, 2008 Feb 29, -186.953 Open Ended Prudential ICICI Power 5000 Daily Daily Amount Bet. 0 to 49999999 then Entry load is 2.25%. and Amount greater than 50000000 then Entry load is 0%. If redeemed bet. 0 Months to 6 Months; and Amount Bet. 0 to 49999999 then Exit load is 1%. If redeemed bet. 6 Months to 12 Months; and Amount Bet. 0 to 49999999 then Exit load is 0.5%. and Amount greater than 50000000 then Exit load is 0%. Mr Anand Shah
Fund manager
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Top Ten holdings as on Feb 29, 2008 Company Reliance Industries Ltd Steel Authority of India Ltd Sterlite Industries (India) Ltd Bharti Airtel Ltd Bharat Heavy Electricals Ltd Zee Entertainment Enterprises Ltd Larsen & Toubro Limited ICICI BANK LTD. Sun Pharmaceuticals Industries Ltd Union Bank Of India Ltd Top industry allocation as on Feb 29, 2008 Banks Oil & Gas, Petroleum & Refinery Housing & Construction Entertainment Steel Engineering & Industrial Machinery Pharmaceuticals Telecom Metals Computers - Software & Education Asset Allocation as on Mar 31, 2008 Equity 94.59 Debt 0 Money Market 5.41 12.7765% 11.5705% 9.3932% 8.7206% 6.5094% 5.7927% 5.0092% 4.9636% 4.8579% 4.5851% Nature EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ Value (Cr.) 93.61 62.71 62.23 57.84 56.6 54.85 46.66 45.6 43.93 41.89 % 7.31 4.9 4.86 4.51 4.42 4.28 3.64 3.56 3.43 3.27
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Scheme Performance (%) as on Apr 3 , 2008 14 days NA 1 month -9.72 3 months -29.4 1 year 15.48 3 yrs* 32.69 Inception* 17.35
Net Asset Value (Rs/Unit)
86.89
As On Apr 3, 2008
Best and worst performance period : Best period Month 34.39 (03/12/1999 - 04/01/2000) Quarter 78.29 (22/11/1999 - 22/02/2000) Year 215.03 (08/03/1999 - 07/03/2000) Worst period -35.48 (11/04/2000 - 12/05/2000) -46.59 (22/02/2000 - 23/05/2000) -59.60 (13/03/2000 - 13/03/2001)
Relative Performance (Fund v/s category)
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Performance Analysis: This fund isn't shooting out the lights but has put up a respectable return. Its 13-year performance is suggestive of a decent record with neither a blockbuster performance, nor a massive blow-up. Only one year (2000) did it land in the bottom quartile.
The fund's focus on fundamentals is its strength. It would be rare to come across any unheard names in its portfolios. If they did appear, it would be in miniscule proportions. Since the fund refuses to chase momentum plays that have the tendency to fall as dramatically as they rise, it steered clear of real estate stocks which had been in fashion in the last couple of years. This is precisely why the fund doesn't set the charts on fire, but neither does it give its investors sleepless nights.
Although this is encouraging, instability at the helm rarely benefits investors. The high degree of churn in fund management continues to worry. Under Anand Shah's leadership (since January 2007), the portfolio has become more focused with under 35 stocks, as against the earlier count of 50. Consequently, the concentration in the top three holdings has also gone up from 15 per cent to over 20 per cent. But once you realize that these holdings include Reliance Industries, Bharti Airtel and ICICI Bank, any apprehensions on this front disappear.
Its theme of core and feeder industries is more diverse than what appears at first blush. Its inclusion of sectors as diverse as energy, transportation, financial services, info tech, healthcare, electricity, media and hotels, give it a more diversified slant. The large-cap tilt along with its concentrated portfolio and broad theme make it an appealing option.
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HDFC CAPITAL BUILDER FUND

ABOUT HDFC ASSET MANAGEMENT COMPANY: HDFC Asset Management Company Limited (AMC) was incorporated under the Companies Act, 1956, on December 10, 1999, and was approved to act as an Asset Management Company for the Mutual Fund by SEBI on June 30, 2000. The sponsor HDFC was incorporated in 1977 as first specialised housing finance institution in India. HDFC provides financial assistance to individuals, corporates and developers for the purchase and construction of residential housing. It also provides property-related services, training and consultancy. In the mutual fund venture, HDFC has tied up with Standard Life, one of the leading Insurance companies in the United Kingdom, having vast experience in management of funds. HDFC has developed a strong and dedicated team of agents that market its fixed deposit products. These key partners would constitute the backbone of the marketing and distribution network of Mutual Fund and will remain a central theme of the organisational framework in times to come.
No. of schemes No. of schemes including options Equity Schemes Debt Schemes Short term debt Schemes Equity & Debt Money Market Gilt Fund
88 351 34 292 15 6 0 4
Fund Managers : Anil Bamboli , Chirag Setalvad , Dhawal Mehta , Mustafa Mehmood , Prashant Jain, Shabbir Kapasi, Shobhit Mehrotra , Srinivas Rao Ravuri , Vinay R Kulkarni. ABOUT HDFC CAPITAL BUILDER FUND:
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HDFC Capital Builder is a value-style diversified equity fund investing in midcaps (benchmark S&P CNX 500). Value style investing involves identifying good stocks that trade at a steep discount to their fair value. INVESTMENT STYLE
FUND INFORMATION: Type of Scheme Open Ended Nature of Scheme Equity Inception Date Dec 31, 1993 Face Value(Rs/Unit) 10 Fund Size (Rs. in crores) 645.7181 on Mar 31, 2008 Increase/Decrease since Feb 29, 2008 (Rs. -102.576 in crores) Rolled Over To Open Ended Zurich I C B F - Zurich India Quantum Previous Name Growth Fund Minimum Investment (Rs) 5000 Purchase Redemptions Daily NAV Calculation Daily Fund Manager Chandresh Nigam Amount Bet. 0 to 49999999 then Entry load Entry Load is 2.25%. and Amount greater than 50000000 then Entry load is 0%. Exit Load Exit Load is 0%. Top Ten holdings are as follows: Company ICICI BANK LTD. Nature EQ Value (Cr.) 54.42 % 7.27
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State Bank of India Bharat Heavy Electricals Ltd Crompton Greaves Ltd Sintex Industries Ltd Exide Industries Ltd IPCA Laboratories Ltd SKF Bearings India Ltd Indraprastha Gas Ltd Thermax Limited Top industry allocation Feb 29, 2008 Banks Electricals & Electrical Equipments Pharmaceuticals Finance Auto & Auto ancilliaries Engineering & Industrial Machinery Steel Chemicals Metals Plastic
EQ EQ EQ EQ EQ EQ EQ EQ EQ
40.52 40.25 34.38 30.91 30.24 29.74 29.17 25.28 24.86
5.41 5.38 4.59 4.13 4.04 3.97 3.9 3.38 3.32
17.7639% 9.973% 9.491% 8.2077% 7.9401% 7.5767% 5.6552% 5.0128% 4.166% 4.1309%
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Top ten holdings

Banks Electricals & Electrical Equipm ents Pharmaceuticals Finance Auto & Auto anci Engineering & Industrial Machinery Steel Chem icals Metals Plastic
Asset Allocation as on Mar 31, 2008 : Equity 92.2 Debt 0 Money Market 7.8
Scheme Performance (%) as on Apr 4 , 2008 14 days NA 1 month -10.87 3 months -32.9 1 year 22.93 3 yrs* 25.76 Inception* 14.92
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Best and Worst performance of the fund: Best performance Month 30.93 (20/03/1998 - 21/04/1998) Quarter 45.72 (22/09/2003 - 22/12/2003) Year 146.48 (24/04/2003 - 23/04/2004) worst performance -33.87 (12/05/2006 - 13/06/2006) -32.90 (04/01/2008 - 04/04/2008) -46.06 (30/11/1994 - 30/11/1995
Relative performance of the fund(fund v/s category average)
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Performance analysis of the fund:

Equity fund investors have rarely had it so ironical. During 2003 time they were jubilant spectators to an astonishing surge in equity markets that saw them double their money in less than 12 months. A year later they have seen more than 25% of their gains shaved off. While there is nothing startling about this to the seasoned equity fund investor, it is nevertheless disquieting to investors with a low to moderate risk profile. At Personalfn we have seen a lot of investors who have been distraught at the volatility in stock markets over the last few months. This got us to look at funds that did reasonably well during the bull run last year and redeemed themselves equally well during the slide over the last 3 months. One fund that caught our eye was HDFC Capital Builder. HDFC Capital Builder is a fund that has for long lived in the shadow of its more renowned siblings HDFC Equity and HDFC Top 200. However, the fund is now emerging as a force to reckon with and its performance in the year 2004 and 2005. HDFC Capital Builder is a value-style diversified equity fund investing in midcaps (benchmark S&P CNX 500). Value style investing involves identifying good stocks that trade at a steep discount to their fair value. Investors can retain their holdings in HDFC Capital Builder. After hugely under performing the market in 2006, the fund has saw a pick-up in performance over a one-year period. Capital Builders portfolio has undergone a major overhaul and wears a more aggressive look. This makes it more suitable to investors with a risk appetite. While the fund enjoys a long track record, it has displayed a chequered performance over the past three years. This may be partly due to the frequent changes in the funds positioning. Capital Builder has changed its focus from a value/defensive fund to a mid-cap focused fund in 2003-04 and now sports a profile similar to other diversified funds.
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Some of the changes are likely to have occurred due to fund manager changes; three fund managers have handled this fund in the last three years. Investors can wait for the fund to display a greater consistency in its performance over the next year or so, before contemplating fresh exposures. For now, the fund need not form a core part of your portfolio. HDFC Capital Builder has generated a return of about 55 per cent during 2005, beating the category average of about 45 per cent. Until 2006, Capital Builder did display a strong performance record and was among top choices for those who desired a fund with a mid-cap focus. However, it was a laggard in 2006. In a year when only an aggressive investment strategy helped funds outpace the markets, Capital Builders focus on defensive sectors such as FMCG and its well-diversified approach to investing worked against its favour. The massive underperformance resulted in considerable outflows from the fund, which added instability to its performance. Over the past year, however, the portfolio appears to have undergone significant changes. Capital Builder shed its exposure to FMCG and auto ancillaries and has considerably stepped up its holdings in banks, electricals and electrical equipments, capital goods and metals stocks etc.
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RETURNS OF THE FUNDS COMARED TO BENCH MARK:

1.FRANKLIN INDIA BLUE-CHIP FUND
40 35 30 25 20 15 10 5 0 since 5 yr since 3 yr since 1 yr FIBCF BSE SENSEX
2.ICICI PRUDENTIAL POWER FUND

60 50 40 30 20 10 0 since 5 yr since 3 yr since 1 yr ICICI PPF S&P CNX NIFTY
3.HDFC CAPITAL BUILDER FUND
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60 50 40 30 20 10 0 since 5 yr since 3 yr since 1 yr HDFC CBF S&P CNX 500
Risk and Return Analysis of the Schemes

Whenever an investor goes for investment he/she will use to analyze the Risk associated with that particular investment and what may be the expected return by investing their, But some times expected returns may vary due to some reasons so it is very important for a investor to calculate about the rate of risk associated with the particular stock. There are mainly two types of risks: 1. Systematic Risk 2. unsystematic Risk
Systematic risk: The systematic risk affects the entire market. The economic conditional, political situations, sociological changes affect the entire market in turn affecting the company and even the stock market. These situations are uncontrollable by the corporate and investor. Unsystematic risk: The unsystematic risk is unique to industries. It differs from industry to industry. Unsystematic risk stems from managerial inefficiency, technological change in the production process, availability of raw materials, changes in the consumer preference, and labor problems. The nature and magnitude
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of above mentioned factors differ from industry to industry and company to company.
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THE TOOLS USED FOR CALCULATION OF RISK AND RETURN: 1. Standard Deviation 2. Beta 3. Alpha 4. Sharp ratio 5. Treynor ratio 6. Arithmetic mean
STANDARD DEVIATION S.D= (y-Y) N The standard deviation is a measure of the variables around its mean or it is the square root of the sum of the squared deviations from the mean divided by the number of observations.S.D is used to measure the variability of return i.e. the variation between the actual and expected return. BETA Beta = N*XY- (X) (Y/ N(X*X) * (x) Where N- No of observation X- Total of market index value
68
Y- Total of return to Nav Beta describes the relationship between the stocks return and index returns. In short it mainly analyzes the sensitivity of stock to systematic risk. If the BETA is 0: No risk If the BETA is 1: Same risk profile as the market as a whole. If the BETA is Less than 1: It is as sensitive to market risk. If the BETA is More than 1: It is more sensitive to the market risk. Negative beta value indicates that the stocks return move in opposite direction to the market return.
ALPHA Alpha = Y- beta(X) Where Y- avrage return to nav return X- average return to market index . Alpha indicates that the stock return is independent of the market return. A positive value of alpha is a healthy sign. Positive alpha values would yield profitable return.
69
SHARPE RATIO St=
Rp --Rf
S.D
WHERE Rp Avereage return to portfolio RfRisk free rate of interest S.D- Standard Deviation Sharpes performce index gives a single value to be used for the performance ranking of various funds or portfolios. Sharpe index measures the risk premium of the portfolio relative to the total amount of risk in the portfolio. The risk premium is the difference between the portfolios average rate of return and the risk less rate of return. The standard deviation of the portfolio indicates the risk. Higher the value of sharpe ratio better the fund has performed. Sharpe ratio can be used to rank the desirability of funds or portfolios. The fund that has performed well comapred to other will be ranked first then the others.
70
TREYNOR RATIO Ty= RpRf B WHERE Rp- Average return to portfolio Rf- Risk less rate of interest. B- Beta coeffecient Treynor ratio is based on the concept of characteristic line. Characteristic line gives the relation between a given market return and funds return. The funds performance is measured in relation to market performance. The ideal funds return rises at a faster rate than the market performance when the market is moving upwards and its rate of return declines slowly than the market return, in the decline. Treynors risk premium of the portfolio is the difference between the aveage return and the risk less rate of return. The risk premium depends on the systematic risk assumed in a portfoilo.
71
72
Risk and Return analysis of following Data:

SCHEMES SELECTED FOR RISK AND RETURN ANALYSES ARE: FUND NAME FRANKLIN BLUECHIP FUND ICICI PRUDENTIAL POWER FUND HDFC CAPITAL BUILDER FUND BENCH MARK INDEX BSE SENSEX S&P CNX NIFTY S&P CNX 500
73
FRANKLIN BLUECHIP FUND:

Date
30-Jan-2004 5.67 27-Feb-2004 7.51 31-Mar-2004 0.60 30-Apr-2004 5.09 31-May-2004 9.62 30-Jun-2004 5.46 30-Jul-2004 0.32 31-Aug-2004 2.08 30-Sep-2004 3.61 29-Oct-2004 2.27 30-Nov-2004 4.29 31-Dec-2004 2.69 31-Jan-2005 5.94 28-Feb-2005 3.86 31-Mar-2005 2.82 29-Apr-2005 4.44 31-May-2005 5.11 30-Jun-2005 3.85 29-Jul-2005 5.42 31-Aug-2005 5.43 30-Sep-2005 4.48 31-Oct-2005 2.32 30-Nov-2005 8.81 30-Dec-2005 7.93 9,39 6.93 48.03365 8,78 11.36 129.0273 90.48 5.528341 2.893611 8.372987 38.3149 7,89 (8.60) 73.87929 85.74 12.83064 10.19591 103.9565 8,63 10.62 112.8152 75.99 -8.28002 -10.9148 119.1319 7,80 2.23 4.957732 82.85 7.751333 5.116603 26.17963 7,63 6.14 37.677 76.89 5.213465 2.578735 6.649872 7,19 7.13 50.82685 73.08 8.75 6.11527 37.39653 53.7089 11.6082 8 82.3304 1 71.1693 4 145.743 4 6,71 9.11 82.99225 67.20 4.510109 1.875379 3.517045 32.1539 6,15 (5.21) 27.16081 64.30 7.867807 5.233077 27.3851 71.67579 6,49 (3.29) 10.8392 59.61 -5.04938 -7.68411 59.04553 6,71 2.41 5.802355 62.78 -4.40079 -7.03552 49.49857 14.4887 26.3153 6 6,55 (0.71) 0.501327 65.67 4.039924 1.405194 1.97457 6,60 5.91 34.91928 63.12 -1.48275 -4.11748 16.95367 6,23 9.91 98.17248 64.07 7.880114 5.245384 27.51406 46.56559 1.04985 6 9.73140 1 5,67 1.59 2.521305 59.39 11.71934 9.084608 82.5301 5,58 7.54 56.8653 53.16 -0.74683 -3.38156 11.43492 -1.18586 116.117 6 5,19 0.42 0.177126 53.56 5.975465 3.340735 11.16051 5,17 7.82 61.10513 50.54 1.813054 -0.82168 0.675152 4,79 0.75 0.567011 49.64 5.527211 2.892481 8.366445 4,75 (15.83) 250.7397 47.04 3.955801 1.321071 1.745228 5,65 1.15 1.330662 45.25 -16.2037 -18.8384 354.8866 256.5818 2.97872 3 43.2060 8 0.76304 9 45.0604 3 5,59 (1.36) 1.841539 54.00 2.817974 0.183244 0.033578 3.250656 5,66 (0.49) 0.244442 52.52 -0.09511 -2.72984 7.452034
Sensex
5,69
x 0
x*x 0
NAV 51.62 52.57
y 0 1.840372
y-y bar 0 -0.79436
y-ybar sq 0 0.631005
xy 0 -0.9099 0.12906 9
74
31-Jan-2006 9.89 28-Feb-2006 0.24 31-Mar-2006 9.96 28-Apr-2006 2.56 31-May-2006 8.61 30-Jun-2006 9.25 31-Jul-2006 3.88 31-Aug-2006 9.05 29-Sep-2006 4.42 31-Oct-2006 1.90 30-Nov-2006 6.31 29-Dec-2006 6.91 31-Jan-2007 0.92 28-Feb-2007 8.09 30-Mar-2007 2.10 30-Apr-2007 2.37 31-May-2007 4.46 29-Jun-2007 0.51 31-Jul-2007 0.99 31-Aug-2007 8.60 28-Sep-2007 1.10 31-Oct-2007 7.99 30-Nov-2007 3.19 31-Dec-2007 6.99 31-Jan-2008 8.71
9,91 5.55 10,37 4.54 11,27 8.77 12,04 6.76 10,39 (13.65) 10,60 2.03 10,74 1.27 11,69 8.89 12,45 6.46 12,96 4.07 13,69 5.67 13,78 0.66 14,09 2.21 12,93 (8.18) 13,07 1.04 13,87 6.12 14,54 4.84 14,65 0.73 15,55 6.15 15,31 (1.49) 17,29 12.88 19,83 14.73 19,36 (2.39) 20,28 4.77 17,64 (13.00) 169.1245 22.76156 5.728304 216.9577 165.8043 2.233155 37.77832 0.53165 23.47219 37.47851 1.072838 66.93478 4.862301 0.437572 32.10257 16.60316 41.68869 79.03857 1.610328 4.10328 186.3544 45.70655 76.95518 20.61041 30.84679
96.67 6.841291 101.88 5.389469 111.88 9.815469 117.36 4.898105 101.99 -13.0965 100.38 -1.57859 101.54 1.155609 110.83 9.149104 117.41 5.937021 124.02 5.629844 128.99 4.007418 131.67 2.07768 134.23 1.944255 122.35 -8.85048 122.93 0.47405 131.4581 6.937363 139.7843 6.333729 142.4306 1.893131 151.0756 6.069623 148.1788 -1.91745 165.0024 11.35358 184.3076 11.69995 183.8756 -0.23439 194.0922 5.556257 166.6356 -14.1462 -16.7809 281.5984 183.9679 2.921526 8.535316 26.50839 -2.86912 8.231855 0.560988 9.065221 82.17823 172.3343 8.718851 76.01836 146.1944 -4.55218 20.72235 2.865389 3.434893 11.79849 37.30637 -0.7416 0.549969 1.380364 3.698999 13.68259 30.68572 4.302633 18.51265 42.47032 -2.16068 4.668539 0.491011 -11.4852 131.9101 72.40904 -0.69048 0.476757 4.287203 -0.55705 0.310304 1.374369 1.372688 1.884272 22.70568 2.995114 8.970708 22.93991 3.302291 10.90512 38.33343 6.514374 42.43706 81.33886 -1.47912 2.1878 1.466452 -4.21332 17.75203 -3.19767 -15.7312 247.4702 178.7819 2.263375 5.122866 33.11443 7.180739 51.56301 86.10532 2.754739 7.588588 24.46748 4.206561 17.69515 37.99645
75
124.9268
2383.795
total
129.1018
2039.262
2317.735
ARITHMETIC MEAN: ARITHMETIC MEAN X= Y N GROWTH OPTION 129.1018 = 2.63 49
STANDARD DEVIATION: S.D S.D=(y-Y) N GROWTH 2039.262 49
= 0.92
76
BETA BETA GROWTH
= N*XY- (X) (Y) N* X -(X)
49*2317.73.-(124.92*129.1) = 0 .96 49 *2383.79 (124.92)
ALPHA ALPHA = Y-B(X) GROWTH

2.63- 0 .96 (2.54) = 0.179
SHARPE RATIO St= Rp-Rf S.D Babasabpatilfreepptmba.com 77
78
Rf = The risk less return for all the schemes is taken to be 9.5% Rp= alpha +beta (i) i = Market returns (Rm)
2004 2005 2006 2007 al 0.17986 0.17986 0.17986 0.17986 b 0.96286 0.96286 0.96286 0.96286 i 1.45 3.176 3.418 3.449 1.396147 3.05804336 3.29105548 3.32090414 1.576007 3.23790336 3.47091548 3.50076414 11.78558/4
Rp = 0.029464 Rf = 0.095 Sharpe ratio Rp-Rf S.D Growth 0.0294-0.095 0.92
= -0.0711
TREYNOR RATIO TREYNOR RATIO Rp-Rf B GROWTH 0.0294 0.095 =-0.068

0 .96
79
ICICI PRUDENTIAL POWER FUND

DATE 30-Jan-04 27-Feb-04 31-Mar-04 30-Apr-04 31-May-04 30-Jun-04 30-Jul-04 31-Aug-04 30-Sep-04 29-Oct-04 30-Nov-04 31-Dec-04 31-Jan-05 28-Feb-05 31-Mar-05 29-Apr-05 31-May-05 30-Jun-05 29-Jul-05 31-Aug-05 30-Sep-05 31-Oct-05 30-Nov-05 30-Dec-05 31-Jan-06 28-Feb-06 31-Mar-06 29-Apr-06 31-May-06 30-Jun-06 31-Jul-06 31-Aug-06 29-Sep-06 31-Oct-06 30-Nov-06 29-Dec-06 31-Jan-07 28-Feb-07 30-Mar-07 30-Apr-07 31-May-07 29-Jun-07 CNX NIFTY 2062.42 2052.4 2020.25 2048.22 1698.16 1727.93 1878.62 1882.09 2020.62 2069.39 2268.99 2418.88 2393.76 2447.94 2369.69 2214.96 2433.73 2599.93 2711.24 2801.99 3066.15 2795.89 3127.8 3353.37 3549.92 3639.43 4028.82 4213.88 3642.31 3721.71 3745.46 4073.55 4288.97 4476.5 4729.13 4758.45 4899.39 4504.73 4605.89 4934.46 5185.95 5223.82 x 0 -0.48584 -1.56646 1.384482 -17.0909 1.753074 8.720839 0.18471 7.360434 2.413616 9.645354 6.606023 -1.0385 2.263385 -3.19657 -6.52955 9.876928 6.829024 4.281269 3.347177 9.427585 -8.81431 11.87135 7.211778 5.861268 2.521465 10.6992 4.593405 -13.564 2.179935 0.638148 8.759672 5.288262 4.372378 5.643471 0.619987 2.961889 -8.05529 2.24564 7.133692 5.096606 0.730242 x*x 0 0.236038 2.453793 1.916791 292.1001 3.073268 76.05304 0.034118 54.17599 5.82554 93.03286 43.63954 1.078476 5.122911 10.21803 42.63497 97.5537 46.63557 18.32927 11.20359 88.87937 77.69208 140.929 52.00975 34.35446 6.357787 114.4729 21.09937 183.9817 4.752118 0.407232 76.73185 27.96572 19.11769 31.84877 0.384384 8.772786 64.88767 5.042897 50.88956 25.9754 0.533254 NAV 28.87 29.27 28.11 29.34 24.57 25.38 26.91 28.05 29.83 30.5 33.35 36.98 36.19 37.98 36.29 35.31 38.35 39.61 44.45 47.78 50.37 45.31 50.71 54.85 59.74 62.26 69.16 74.05 64.87 61.74 62.63 68.71 72.76 76.22 79.55 81.67 83.32 77.66 77.49 83.5 89.2 89.72 y 0 1.385521 -3.9631 4.375667 -16.2577 3.296703 6.028369 4.236343 6.345811 2.246061 9.344262 10.88456 -2.13629 4.946118 -4.44971 -2.70047 8.609459 3.285528 12.21914 7.491564 5.420678 -10.0457 11.9179 8.16407 8.915223 4.218279 11.08256 7.070561 -12.397 -4.82503 1.441529 9.707808 5.894339 4.75536 4.368932 2.664991 2.020326 -6.79309 -0.2189 7.755839 6.826347 0.58296 y-y bar 0 -1.4762499 -6.8248734 1.51389582 -19.11944 0.4349321 3.1665976 1.37457217 3.48403985 -0.6157102 6.4824911 8.02278652 -4.9980611 2.08434651 -7.3114816 -5.5622396 5.74768788 0.42375683 9.35736538 4.62979236 2.55890691 -12.907433 9.05612772 5.302299 6.05345214 1.35650801 8.22078582 4.20878982 -15.2588 -7.6868059 -1.4202422 6.84603656 3.03256733 1.89358889 1.50716084 -0.1967806 -0.8414455 -9.6548581 -3.0806741 4.89406826 3.96457611 -2.2788116 y-ybar sq 0 2.1793 46.579 2.2919 365.55 0.1892 10.027 1.8894 12.139 0.3791 42.023 64.365 24.981 4.3445 53.458 30.939 33.036 0.1796 87.56 21.435 6.548 166.6 82.013 28.114 36.644 1.8401 67.581 17.714 232.83 59.087 2.0171 46.868 9.1965 3.5857 2.2715 0.0387 0.708 93.216 9.4906 23.952 15.718 5.193 xy 0 -0.6731 6.20804 6.05803 277.859 5.77936 52.5724 0.7825 46.7079 5.42113 90.1287 71.9036 2.21853 11.195 14.2238 17.6328 85.035 22.4369 52.3134 25.0756 51.1039 88.5456 141.482 58.8775 52.2545 10.6362 118.575 32.4779 168.153 -10.518 0.91991 85.0372 31.1708 20.7922 24.6559 1.65226 5.98398 54.7203 -0.4916 55.3278 34.7912 0.4257
80
31-Jul-07 31-Aug-07 28-Sep-07 31-Oct-07 30-Nov-07 31-Dec-07 31-Jan-08
5483.25 5411.29 6094.11 7163.3 6997.6 7461.48 6245.45
4.966289 -1.31236 12.61843 17.54465 -2.31318 6.62913 -16.2974 124.0164
24.66403 1.72229 159.2248 307.8146 5.3508 43.94536 265.6065 2650.732
92.75 91.26 98.65 111.01 111.25 122.41 102.66 total
3.377173 -1.60647 8.097743 12.52914 0.216197 10.03146 -16.1343 140.2268
0.51540223 -4.4682402 5.23597151 9.66737224 -2.6455745 7.16968948 -18.996074
0.2656 19.965 27.415 93.458 6.9991 51.404 360.85 2275.1
16.772 2.10827 102.181 219.819 -0.5001 66.4999 262.948 2489.28
STANDARD DEVIATION: S.D S.D=(y-Y) N GROWTH

2275.1
= 0.973
49
81
BETA BETA GROWTH
= N*XY- (X) (Y) N* X -(X)
49*2489.28.-( 124.01*140.2) = 0 .91 49 *2650.7 (124.01)

2.86- 0 .91 (2.53) = 0.55
SHARPE RATIO St= Rp-Rf
82
S.D
years 2004 2005 2006 2007 alpha 0.55 0.55 0.55 0.55 beta 0.9133 0.9133 0.9133 0.9133 i 1.577 2.96 3.13 4.02
1.440274 2.703368 2.858629 3.671466 total
1.990274 3.253368 3.408629 4.221466 12.87374
83
Rp=0.032184 Rf = 0.095 Sharpe ratio Rp-Rf S.D Growth 0.032-0.095 0.973
= -0.064
TREYNOR RATIO TREYNOR RATIO Rp-Rf B GROWTH 0.032 0.095 = -0.0687

0 .91
84
HDFC CAPITAL BUILDER FUND:

DATE 30-Jan-04 27-Feb-04 31-Mar-04 30-Apr-04 31-May-04 30-Jun-04 30-Jul-04 31-Aug-04 30-Sep-04 29-Oct-04 30-Nov-04 31-Dec-04 31-Jan-05 28-Feb-05 31-Mar-05 29-Apr-05 31-May-05 30-Jun-05 29-Jul-05 31-Aug-05 30-Sep-05 31-Oct-05 30-Nov-05 30-Dec-05 31-Jan-06 28-Feb-06 31-Mar-06 28-Apr-06 31-May-06 30-Jun-06 31-Jul-06 31-Aug-06 29-Sep-06 31-Oct-06 30-Nov-06 29-Dec-06 31-Jan-07 28-Feb-07 30-Mar-07 30-Apr-07
CNX 500 x
1459.8 1442.8 1457.5 1507.55 1226.55 1248 1351.45 1377.2 1478.75 1502.05 1653.2 1804.9 1768.25 1827.4 1772.85 1688.65 1834.85 1906.2 2027.4 2126.35 2274 2067.8 2306.15 2459.2 2585.95 2658.95 2910.35 3064.7 2635.25 2562.5 2562.55 2807.95 2988.25 3114.55 3280.45 3295.05 3393.1 3107.75 3145.35 3379.1 0 -1.16454 1.018852 3.433962 -18.6395 1.748808 8.289263 1.905361 7.373657 1.575655 10.06291 9.176143 -2.03058 3.345115 -2.98512 -4.74941 8.657804 3.888601 6.3582 4.880635 6.943824 -9.06772 11.52674 6.636602 5.154115 2.822947 9.45486 5.303486 -14.0128 -2.76065 0.001951 9.576399 6.421055 4.226554 5.326612 0.445061 2.975676 -8.40971 1.209879 7.431605
x*x 0 1.356161 1.03806 11.7921 347.4315 3.058328 68.71188 3.6304 54.37081 2.482689 101.2622 84.2016 4.123269 11.1898 8.910914 22.55694 74.95756 15.12122 40.4267 23.8206 48.21669 82.22358 132.8658 44.04449 26.5649 7.96903 89.39438 28.12696 196.3583 7.621182 3.81E-06 91.70741 41.22994 17.86376 28.3728 0.198079 8.854645 70.72329 1.463806 55.22876
NAV
22.751 22.621 22.863 24.721 21.541 22.364 24.089 26.243 27.645 28.404 31.664 35.22 34.746 36.32 35.744 35.926 37.666 37.474 41.82 45.956 48.846 44.938 49.433 51.96 54.099 55.293 60.169 65.153 56.969 50.408 50.059 53.977 57.277 60.551 63.082 63.171 64.459 61.259 60.3 65.818
y 0 -0.5714 1.069802 8.126668 -12.8636 3.820621 7.713289 8.941841 5.342377 2.745524 11.47726 11.23042 -1.34583 4.530018 -1.5859 0.509176 4.843289 -0.50974 11.59737 9.890005 6.288624 -8.00066 10.00267 5.11197 4.116628 2.207065 8.818476 8.283335 -12.5612 -11.5168 -0.69235 7.826764 6.113715 5.716081 4.179947 0.141086 2.03891 -4.9644 -1.56548 9.150912
y-y bar 0 -3.61173 -1.97053 5.086339 -15.9039 0.780292 4.67296 5.901512 2.302048 -0.29481 8.436928 8.19009 -4.38616 1.489689 -4.62623 -2.53115 1.80296 -3.55007 8.557045 6.849676 3.248295 -11.041 6.962341 2.071641 1.076299 -0.83326 5.778147 5.243006 -15.6015 -14.5571 -3.73268 4.786435 3.073386 2.675753 1.139618 -2.89924 -1.00142 -8.00472 -4.60581 6.110583
y-ybar sq 0 13.04461 3.882975 25.87084 252.9336 0.608856 21.83656 34.82784 5.299425 0.08691 71.18175 67.07758 19.23836 2.219173 21.40202 6.406734 3.250665 12.60301 73.22302 46.91806 10.55142 121.9033 48.4742 4.291695 1.15842 0.694329 33.38698 27.48911 243.4078 211.9097 13.9329 22.90996 9.445702 7.159651 1.29873 8.405609 1.002839 64.07562 21.21352 37.33923
xy 0 0.66542394 1.08997056 27.9066697 239.770462 6.68153141 63.9374815 17.0374337 39.392854 4.32599831 115.494648 103.051937 2.73281243 15.1534317 4.73410382 -2.4182898 41.9322447 -1.9821893 73.7384194 48.2695064 43.6670971 72.5477171 115.298214 33.9261092 21.2175757 6.2304272 83.3774571 43.9305513 176.017497 31.7938131 -0.0013509 74.9522151 39.2564979 24.1593271 22.2649592 0.06279195 6.06713558 41.7491495 -1.8940458 68.0059677
85
31-May-07 29-Jun-07 31-Jul-07 31-Aug-07 28-Sep-07 31-Oct-07 30-Nov-07 31-Dec-07 31-Jan-08
3563.65 3625.75 3783.85 3711.55 4188.55 4806.85 4869.55 5354.7 4349
5.461513 1.742595 4.360477 -1.91075 12.85177 14.76167 1.304389 9.962933 -18.7816
29.82813 3.036639 19.01376 3.650974 165.1681 217.907 1.701429 99.26003 352.7497
69.818 73.27 76.914 76.323 83.094 96.061 99.034 106.538 88.367
6.077365 4.944284 4.973386 -0.76839 8.871507 15.60522 3.094908 7.577196 -17.0559
3.037036 1.903955 1.933057 -3.80872 5.831178 12.56489 0.054579 4.536867 -20.0962
9.223587 3.625044 3.73671 14.50635 34.00263 157.8764 0.002979 20.58316 403.8579
33.1916097 8.61588591 21.6863364 1.46820422 114.014594 230.359108 4.03696307 75.4910926 320.337362
123.1053 2751.786 total
148.9761
2219.377 2513.34471
STANDARD DEVIATION: S.D S.D=(y-Y) N GROWTH

2219.377
= 0.96
49
86
BETA
GROWTH
= N*XY- (X) (Y) N* X -(X) BETA
49*2513.54.-( 123.10*148.7) = 0 .87 49 *2751.7 (123.10)

3.04- 0 .87 (2.51) = 0.84
SHARPE RATIO
al 0.84 0.84 0.84 0.84 b 0.8757 0.8757 0.8757 0.8757 i 2.065 2.78 2.66 4.31 B*i 1.8083205 2.434446 2.329362 3.774267 tot rp 2.6483205 3.274446 3.169362 4.614267 13.706395/4
2004 2005 2006 2007
Rp = 0.034 Babasabpatilfreepptmba.com 87
Rf = 0.095
88
Sharpe ratio Rp-Rf S.D
Growth 0.034-0.095 0.96
= -0.063
TREYNOR RATIO TREYNOR RATIO Rp-Rf B GROWTH 0.034 0.095 = -0.069

0 .87
89
CALCULATED DATAS:
Fund
Frankli n bluechip fund
Arithm etic Mean
SD
Beta
alpha
Sharpe Ratio
Treynor Ratio
2.63473
0.92159
0.96286
0.17986
-0.0711
-0.0680
ICICI Pru Power

HDFC capital builder fund
2.86177
0.9734
0.9133
0.55
-0.0645
-0.0687
-0.0693 3.04032 0.9614 0.8757 0.84 -0.0631
90
FINDINGS OF THE PROJECT ARE: Among these three funds more popular among investors is Franklin blue chip fund. Both Franklin blue chip fund and ICICI pru power fund faced problems during 2000 and 2001 main reasons are: 1.Ketan Pareks case and 2.September 11th attack on US WTO
HDFC capital Builder fund faced crucial period during 2006, main reason was its portfolio then mainly consisting of FMCG companies and in that year they drastically came down.
Among these three funds highest Beta is of Franklin i.e 0.96,lowest is of HDFC capital builder fund and sharp ratio high in case of Franklin and low in case of HDFCCB fund .
ICICI Pru Powers performance is more or less is stable even if we see its BETA,Alpha,Sharp ratio and average returns also good i.e 2.86.
Average Return is high in case of HDFC CB Fund i.e 3.04 Franklin blue-chip fund once upon a time it was considered to be as star in mutual funds but due to high market volatility in the year 2006 and 2007 but now from 2008 January on words it could salvage some of its lost pride because of comparatively low volatility in Blue chip stocks
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SUGGESTION/RECOMMENDATON TO INVESTORS: By the study and analysis of the mutual fund industry it will be better to suggest that even though mutual funds are subject to risk but they are better risk adjusted as compared with stocks, from last five years it has become a buzz word for investment main reason it is useful in case of getting tax reductions etc. If a person wants to earn more as compared to Bank FD where possible returns are just 10-12% where as in mutual fund minimum is around 15-20% mutual funds are good option compared with stock market . If person does not want to take much risk then he can invest in the funds like HDFC Capital builder fund because as we have already seen in returns chart, compared with other two funds(Franklin blue-chip and ICICI power).that it has given constant returns in shorter period of time, with less BETA and arithmetic mean return is also high If a person is more interested and ready to take risk then the Franklin Blue-chip fund will the good option. By looking at its BETA and SD Risk both are high but if person invest in this fund for more than 4 years he will get returns around 35%.
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Benefits of the study:

This study helps us to know the workings and concept of Mutual funds. This research helps to find how much return can earned by investing in Mutual funds as compared with FD It will also help to convince the others regarding how Mutual Funds re better risk adjusted as compared with direct investment through shares. And finally it has given Picture about how these three funds [Franklin Bluechip,ICICI Pru power,HDFC capital builder] performing over last 15 years. Limitations: Main Limitation is that in this project we are only considering three schemes of mutual funds, and another limitation is data availability/collection is very tedious.
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BIBLIOGRAPHY
www.mutualfundsindia.com www.indiainfoline.com www.valueresearcersonline.com www.amfi.com www.rediff.com
Reference books
SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT Donald Fischer Punithavathy.P
Reference Magazine
Mutual fund Insight Out look Money.
94

A Project Report On Different Schemes of Mutual Funds and Their Comparative Analysis

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A Project Report On Different Schemes of Mutual Funds and Their Comparative Analysis

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

Topic of the study:

Main Objective of the Project:

Methodology: Primary data: Secondary Data:

Benefits of the study:

INVEST THEIR MONEY I N V E S T O R S

INVEST IN VARIETY OF STOCKS/BONDS

PROFIT/LOSS FROM PORTFOLIO INVESTMENT

PROFIT/LOSS FROM INDIVIDUAL INVESTMENT

Benefits through investing in Mutual funds:

Disadvantages of Mutual Funds:

INDUSTRY OVERVIEW A little history:

Ups & Downs of Mutual fund Industry In India

Private sector plays:

TYPES OF MUTUAL FUNDS: two categories. They are

Mutual fund schemes can be broadly classified in to

PORTFOLIO CLASSIFICATION OPERATIONAL CLASSIFICATION

Investment based Equity scheme Bond scheme Balanced structure

Per unit NAV

To cover costs for selling, processing

Redemption Price Price at which open-ended scheme

ASSOCIATION OF MUTUAL FUNDS IN INDIA[AMFI]

SEBI REGULATIONS ON MUTUAL FUNDS

The Kotak Mahindra Group

KOTAK SECURITIES: Kotak Securities Ltd. 100 % subsidiary of Kotak Mahindra

ORGANIZATION STRUCTURE OF KOTAK SECURITIES

ANALYSIS PART OF THE PROJECT

Franklin India Blue chip Fund

ICICI Prudential Power

HDFC capital builder fund

Franklin India Blue-chip Fund(G)

Franklin India Blue chip Fund

Relative performance [fund v/s Category wise]

ICICI PRUDENTIAL POWER FUND

ICICI PRUDENTIAL POWER MUTUAL FUND-G

Benefits by investing in this fund:

Net Asset Value (Rs/Unit)

Relative Performance (Fund v/s category)

HDFC CAPITAL BUILDER FUND

40.52 40.25 34.38 30.91 30.24 29.74 29.17 25.28 24.86

5.41 5.38 4.59 4.13 4.04 3.97 3.9 3.38 3.32

Top ten holdings

Relative performance of the fund(fund v/s category average)

Performance analysis of the fund:

RETURNS OF THE FUNDS COMARED TO BENCH MARK:

2.ICICI PRUDENTIAL POWER FUND

3.HDFC CAPITAL BUILDER FUND

60 50 40 30 20 10 0 since 5 yr since 3 yr since 1 yr HDFC CBF S&P CNX 500

Risk and Return Analysis of the Schemes

SHARPE RATIO St=

Risk and Return analysis of following Data:

FRANKLIN BLUECHIP FUND:

NAV 51.62 52.57

y-y bar 0 -0.79436

ARITHMETIC MEAN: ARITHMETIC MEAN X= Y N GROWTH OPTION 129.1018 = 2.63 49

STANDARD DEVIATION: S.D S.D=(y-Y) N GROWTH 2039.262 49

BETA BETA GROWTH

= N*XY- (X) (Y) N* X -(X)

49*2317.73.-(124.92*129.1) = 0 .96 49 *2383.79 (124.92)

ALPHA ALPHA = Y-B(X) GROWTH

SHARPE RATIO St= Rp-Rf S.D Babasabpatilfreepptmba.com 77

Rp = 0.029464 Rf = 0.095 Sharpe ratio Rp-Rf S.D Growth 0.0294-0.095 0.92

TREYNOR RATIO TREYNOR RATIO Rp-Rf B GROWTH 0.0294 0.095 =-0.068

= NXY- (X) (Y) N X -(X)

492317.73.-(124.92129.1) = 0 .96 49 *2383.79 (124.92)

= NXY- (X) (Y) N X -(X)

492489.28.-( 124.01140.2) = 0 .91 49 *2650.7 (124.01)

= NXY- (X) (Y) N X -(X) BETA

492513.54.-( 123.10148.7) = 0 .87 49 *2751.7 (123.10)