1

UTI ASSETS MANAGEMENT COMPANY LTD.

A Summer Internship Project Report on

Analysis of Mutual Fund Inddustry

Under Guidance of:

Submitted by:

ACKNOWLEDMENT It is a great sense of satisfaction and a matter of privilege to me to work with UTI Mutual Fund, Bhopal. I wish to express my heartiest thanks to . for providing me the opportunity to do this project in the esteemed organization.

It is my pleasure to thank ... to whom I owe a lot for giving me time to do my project in this organization.

The project would not be a success without the constant and valuable guidance of , my project guide, who is rendering all sorts of help as and when required.

Thank you

CH. NO. 1.

CONTENT Research Methodology: 1.1 Objective 1.2 Methodology

PG. NO.

5. 5.

2.

Industry Value Chain And Structure: 2.1 Industry Overcome 2.2 Industry Value Chain 2.3 Organized v/s Unorganized 8. 15. 16.

3. 4. 5.

Market Size And Growth Industry Segment Competition: 5.1 Herfindahl Index 5.2 Michael Portal Analysis

17. 21.

26. 29.

6. 7. 8. 9. 10. 11.

Growth Drivers of Industry Issues and Concern Case Study Performance Sheet Findings and Recommendations References

30. 32. 34. 64. 68. 70.

CHAPTER 1
RESEARCH METHODOLOGY

1.1) OBJECTIVES:

Objective of this study is to analyze the Past Performance of the various Mutual Funds Schemes on the Basis of there Historical NAVs and application of statistical tools on the same. This helps in understanding the performance of mutual fund schemes in terms of risk adjusted Return. 1.2 METHODOLOGY: A Sample of 30 Schemes from Top 15 Fund Houses has being taken. Analysis has been done by using following Statistical tools: Sharpe Ratio: It indicates the Risk-Return Performance of Portfolio. It uses Standard deviation as the measurement of Volatility. Treynor Ratio: It is a risk-adjusted measure of return based on systematic risk. It uses Beta as the measurement of Volatility. Risk free rate has been assumed as 6% pa.

CHAPTER 2
INDUSTRY VALUE CHAIN AND STRUCTURE

2.1 Industry Overcome: A mutual fund is a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective. The mutual fund will have a fund manager who is responsible for investing the gathered money into specific securities (stocks or bonds). When investors invest in a mutual fund, they are buying units or portions of the mutual fund and thus on investing becomes a unit holder of the fund. Mutual funds are considered as one of the best available investments as compare to others they are very cost efficient and also easy to invest in, thus by pooling money together in a mutual fund, investors can purchase stocks or bonds with much lower trading costs than if they tried to do it on their own. But the biggest advantage to mutual funds is diversification, by minimizing risk & maximizing returns. 2.1(a) Global Mutual Fund Industry: Over the past few decades, the mutual fund industry, both in the U.S. and elsewhere, has exploded. While the global fund industry has flourished, academic studies of mutual funds have remained geographically narrow. Almost all of the research has focused on the U.S., with the exception of a few insightful studies of national fund markets. Even those who study the fund industry are generally unaware that U.S.domiciled funds accounted for only 15% of the number of funds available globally and 60% of the worlds fund assets in 2000 (see Investment Company Institute (2001)).The second-largest fund industry (measured by fund assets) is Luxembourg, with 6.5% of world mutual fund assetspart of the large and growing so-called offshore market, or that France and Korea offer the second-largest number of mutual funds available worldwide (13% of the world total for each country).

The mutual fund industry is among the most successful recent financial innovations. In 2001, mutual funds held assets worth $11.7 trillion or 17% of our estimate of the primary securities in their national markets. There is a recognizable mutual fund style of intermediation in most countries, characterized by a transparent investment vehicle whose underlying assets are identifiable, with the value of the fund marked-to-

market on a regular (usually daily) basis and reflected in the Net Asset Value of the fund, and with new shares created or redeemed upon demand. In contrast, in a relatively opaque financial intermediary (like a bank or insurance company), investors claims are not contractually linked to the underlying asset, marked-tomarket, or created/redeemed upon demand.

Open-end funds have been around and visible for quite a long time. The first open-end funds were created in the early twentieth century in America and were soon thereafter adopted in the Netherlands and the U.K. The median national fund industry in our sample is 36 years old, but this innovation was adopted more quickly and vigorously in some countries than in others. By 2002, in some countries, the industry was a formidable force in the national economic landscape; in other countries, it was small or nonexistent. The mutual fund industry holds 17% of the nations primary financial assets, on average, with a median of 4%.fund industries in Luxembourg and Ireland hold assets that are 484% and 82% of their countrys domestic primary assets.

When considering supply-side factors, we study characteristics of the financial sector that would influence the speed of adoption of mutual funds. The effect of bank concentration, restrictions placed on banks to enter the securities business, the number of distribution channels available for funds, the presence of an explicit deposit insurance system for banks, and the time and cost to set up a new fund. We find that nations that restrict banks from entering the securities business have smaller equity fund sectors, whereas countries with a more concentrated banking industry have smaller bond fund sectors. Nations whose barriers to entry are higher have smaller fund industries; in particular, the costs required to set up a new fund are negatively related to industry size.

When considering demand-side factors, we find that wealthier countries, as measured by GDP per capita, and countries with a more educated population have larger mutual

fund industries. These effects are particularly pronounced for the equity funds, which may require a higher level of investor sophistication. Internet penetration is also positively related to the size of the mutual fund sector, but it is highly correlated with the other demand-side variables. In addition, mutual funds control more national assets in countries in which a larger fraction of pension plans are defined contribution plans. The age of the national fund industry is also positively related to its size and recent growth rate. Finally, the countries whose trading costs are lower, having a more developed fund industry, which indicates that the ability to offer liquidity at a low cost is important for the industrys growth. Overall, these results suggest that mutual funds thrive in more developed economies.

At the end of 2001, the worldwide mutual fund industry held $11.7 trillion in assets. The countries with the largest fraction of the global industry were the U.S. (60%), Luxembourg (6.5%), France (6.1%), Italy (3.1%), and Japan (2.9%). Countries with tiny, but existent, fund industries include Bangladesh, Romania, and Sri Lanka. In addition, we identify five countries with no apparent fund sector: Algeria, Burma, Libya, United Arab Emirates, and Yugoslavia (Serbia and Montenegro). Median assets under management (AUM) as a function of the countrys GDP are 9% with a high of 3991% for Luxembourg, followed by Ireland with 186% and a low of 0.011% for Bangladesh (after excluding the countries with zero mutual fund assets).When we measure assets under management relative to the universe of primary securities, the fund industry holds 4% of all primary securities in the median country, with Luxembourg once again at the high end with 485%, followed by Ireland with 82%.

As of the end of 2001, the $11.7 trillion of world fund assets were held in 55,160 funds, with a Median number of 285 funds per country. The U.S., which had the largest fund industry in terms of the share of assets held, was also the largest in terms of the number of available mutual funds (8,307 funds at the end of 2001). France and Korea were second and third with 7,144 and 7,117 funds, respectively. It is intriguing to note that there were over 55,000 different products availablea staggering number compared to almost any other industry.

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Evolution in India The formation of Unit Trust of India marked the evolution of the Indian mutual fund industry in the year 1963. The primary objective at that time was to attract the small investors and it was made possible through the collective efforts of the Government of India and the Reserve Bank of India. The history of mutual fund industry in India can be better understood divided into following phases: Phase 1. Establishment and Growth of Unit Trust of India - 1964-87 Unit Trust of India enjoyed complete monopoly when it was established in the year 1963 by an act of Parliament. UTI was set up by the Reserve Bank of India and it continued to operate under the regulatory control of the RBI until the two were delinked in 1978 and the entire control was tranferred in the hands of Industrial Development Bank of India (IDBI). UTI launched its first scheme in 1964, named as Unit Scheme 1964 (US-64), which attracted the largest number of investors in any single investment scheme over the years. UTI launched more innovative schemes in 1970s and 80s to suit the needs of different investors. It launched ULIP in 1971, six more schemes were launched between 1981 to 1984, Children's Gift Growth Fund and India Fund (India's first offshore fund) in 1986, Market share (Indias first equity diversified scheme) in 1987, and Monthly Income Schemes (offering assured returns) during 1990s. By the end of 1987, UTI's assets under management grew ten times to Rs 6700 crores.

Phase

II.

Entry

of

Public

Sector

Funds

1987-1993

The Indian mutual fund industry witnessed a number of public sector players entering the market in the year 1987. In November 1987, SBI Mutual Fund from the State Bank of India became the first non-UTI mutual fund in India. SBI Mutual Fund was later followed by Canbank Mutual Fund, LIC Mutual Fund, Indian Bank Mutual Fund, Bank of India Mutual Fund, GIC Mutual Fund and PNB Mutual Fund. By 1993, the

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assets under management of the industry increased seven times to Rs. 47,004 crores. However, UTI remained to be the leader with about 80% market share. Phase III. Emergence of Private Sector Funds 1993-96

The permission given to private sector funds including foreign fund management companies (most of them entering through joint ventures with Indian promoters) to enter the mutual fund industry in 1993, provided a wide range of choice to investors and more competition in the industry. Private funds introduced innovative products, investment techniques and investor-servicing technology. By 1994-95, about 11 private sector funds had launched their schemes. Phase IV. Growth and SEBI Regulation 1996-2004

The mutual fund industry witnessed robust growth and stricter regulation from the SEBI after the year 1996. The mobilization of funds and the number of players operating in the industry reached new heights as investors started showing more interest in mutual funds. Investors interests were safeguarded by SEBI and the Government offered tax benefits to the investors in order to encourage them. SEBI (Mutual Funds) Regulations, 1996 was introduced by SEBI that set uniform standards for all mutual funds in India. The Union Budget in 1999 exempted all dividend incomes in the hands of investors from income tax. Various Investor Awareness Programs were launched during this phase, both by SEBI and AMFI, with an objective to educate investors and make them informed about the mutual fund industry. In February 2003, the UTI Act was repealed and UTI was stripped of its Special legal status as a trust formed by an Act of Parliament. The primary objective behind this was to bring all mutual fund players on the same level. UTI was re-organized into two parts: 1. The Specified Undertaking, 2. The UTI Mutual Fund

Presently Unit Trust of India operates under the name of UTI Mutual Fund and its past schemes (like US-64, Assured Return Schemes) are being gradually wound up. However, UTI Mutual Fund is still the largest player in the industry. In 1999, there

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was a significant growth in mobilization of funds from investors and assets under management.

Phase

V.

Growth

and

Consolidation

2004

Onwards

The industry has also witnessed several mergers and acquisitions recently, examples of which are acquisition of schemes of Alliance Mutual Fund by Birla Sun Life, Sun F&C Mutual Fund and PNB Mutual Fund by Principal Mutual Fund. Simultaneously, more international mutual fund players have entered India like Fidelity, Franklin Templeton Mutual Fund etc. There were 29 funds as at the end of March 2006. This is a continuing phase of growth of the industry through consolidation and entry of new international and private sector players.

13

2.2Industry value chain: Mutual Fund value chain divided into three parts: a) Retailer: He is the final customer of the Fund houses; he/she invest money in various schemes which is providing by the Relationship Manager or the Dealers of the Fund houses which may be Banks also. b) Fund Houses: In Fund houses the Schemes of various funds has been prepared by the Fund Managers. Fund houses have been tied up with various Education and Technological institute for getting Skillful manpower. c) Stock Market: The Performance of Various funds have been depending on the performance of the Stock market. The Stock Market has been regulated by the SEBI, so at some extent Mutual Fund industry is also regulated by SEBI, but main regulatory body of Mutual fund Industry is AMFI (Association of Mutual fund industry).

Retaile r Relationship Management /Promotion Fund Houses Tie up with Education & Technical institutes

Stock Market

Regulated by SEBI

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2.3Organized v/s Uunorganized structure: Organized structure in Mutual fund industry means, it is the industry which is following all the rules and regulation made by the market regulator SEBI. Mutual fund industry is 100 percent organized. Unorganized structure is a structure which does not follow any rules and regulation, they do not maintain any records and accounts, and the payment can be done in cash. In Mutual Fund industry the commission given by the company to its dealers /distributers are unorganized which is not informed to the Market regulator SEBI.

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CHAPTER 3
MRKET SIZE AND GROWTH

16

3.MARKET SIZE AND GROWTH The domestic mutual fund industry (IMFI) which grew at a healthy pace of 18-19% in the last eight years (2002-2010) against its worldwide growth rate of 13% is all set to beat past time records and now poised for achieving 22-23% rate of growth by end of current fiscal. According to a Study on Indian Mutual Fund Industry undertaken by The Associated Chambers of Commerce and Industry of India (ASSOCHAM), it is highlighted that IMFI which owned assets worth around Rs.7 lace crores by the end of December 2010. According to the ASSOCHAM Study, Asset Under Management (AUM) as percentage of GDP in India is 4.12% as against Australia 88.22%, Germany 10.54%, Japan 7.57%, UK 18.81%, USA 61.27%, Canada 34.33%, France 59.63%, Hong Kong 101.085 and Brazil 19.95%. GROWTH: It was observed that IMFI is in fast growth phase; competition is becoming fierce with mergers and takeovers and building of brand exercise through focused advertising, better customer service, newer distribution channels, consistent return and newer products offerings. The mutual fund industry which witnessed downfall in 1991 when its declined to Rs.4100 crore achieved significant growth in 1998 and the total industry became worth Rs.72,000 crores and ever since this has kept increasing, revealing its efficient growth. In fact, the months of February and March considered toughest due to largescale redemptions to meet tax liabilities also were active. In March 2006, mutual funds were net buyers worth Rs.4,041.88 crores, gross purchases being Rs.14889.15 crores and gross sales Rs.10847.27 crore making March the most active month for the mutual fund industry in India. May of year 2005 was considered the most active month when mutual funds were net buyers of worth Rs.3,334.99 crore.

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It is also highlighted that in view of growing awakening and certainties prevailing in MF industry, its market penetration would more than double by 2010 from about 4% now as gradually mutual funds are becoming preferred savings instrument for urban and rural folks. Despite domestic MF growing at substantially higher rate in last 3 years, it is still many times behind US MF industry, the size of which is estimated at over US$ 12 trillion as against about Rs.5 lakh crore of India with its market penetration of 4% of total population, compared to 49% in the US and 20% in UK. In India, MF industry manages nearly 700 schemes while US MF industry has more than 12,000 MF schemes. The public sector share in current MF industry size will go up from nearly 20% from less than 10% now and that of joint sector to about 10% from 8% now. The emerging trends in the MF would be that the Commodity funds will invest in commodities such as metals, food grains, and crude oil, commodity companies, or commodity futures contracts. Likewise, Real estate funds will invest in real estate directly. As the competition in the Indian MF industry will further intensify and go forward. Fund managers will, therefore, need to deliver products that are relevant to investors. As the Indian markets and investors mature, financial advice, product diversification, and multi-distribution channels will become critical for long-term success. Increasing investor awareness will help propel growth for the Indian MF industry. Investors need to be however warned against the common fallacy of comparing returns of debt-oriented fixed-income MFs and fixed-income products of small savings schemes without considering the attendant risks.

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CHAPTER 4
INDUSTRY SEGMENT

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4. INDUSTRY SEGMENT: Classification of Mutual Funds in India has been done on the basis of their investment objective and structure. Classification of Mutual Funds in India has be done into main types such as Income Funds, Sector- Specific Funds, Large Cap Funds, Fixed- Income Funds, Interval Funds, Closed- End Funds, and Tax Saving Funds. a) Income Funds in India are a kind of mutual fund whose aim is to provide to the investors with steady and regular income. They usually invest their principal in securities such as corporate debentures, bonds, and government securities. The debt securities in which Fixed- Income Funds in India makes investments are also known as commercial papers of deposit or treasury bills if the duration is less than one year and in case the duration is more than one year then the debt securities are known as bonds or debentures. b) Sector- Specific Funds in India are funds that make investments in specified sectors only. They give importance to one sector only such as pharmaceuticals, software, infrastructure, and health care. The amount of returns that Sector- Specific Funds in India give depends totally on the performance of the industries or sectors in which investments have been made. Sector- Specific Funds in India give very high returns but at the same time they are also very risky in comparison to the funds that are diversified. c) Large Cap Funds in India are a kind of mutual fund that makes investment in the shares of large blue chip companies. The large cap companies in which Large Cap Funds in India makes investments are usually companies that have a market capitalization that is more than Rs. 1000 crores. The main advantage of Large Cap Funds in India is that they are considered to be of low return and low risk category. This ensures that the investments of the investors are relatively safe. d) Fixed- Income Funds in India makes investment in debt securities that have been issued either by the banks, government, or companies. They are also known as income funds and debt funds. The advantage of Income Funds in India is that it provides regular income to the investor either on a monthly or quarterly basis. Further the

21

advantage of Income Funds in India is that it also provides stability of capital to the investor. e) Interval Funds in India are a combination of both the open and close ended funds. They offer the investors flexibility for they can be sold and repurchased at the period of time that has been predetermined. Interval Funds in India are usually repurchased every six or twelve months at Net Assets Value (NAV) or as has been unveiled in the annual report and prospectus of the fund. f) Closed- End Funds in India are a kind of mutual fund that has a maturity period, that has been specified and which usually varies from three to fifteen years. In ClosedEnd Funds in India, the number of shares that are sold in the public offer is fixed and after this the selling and buying of the units are possible only in the stock exchanges.

g) Tax Saving Funds in India offer tax rebates to the investor under the Section 88, Income Tax Act. They are also known as equity- linked savings scheme.

h) Open- End Funds in India is such that the investors can sell as well as buy all through out the year. The investors sell and buy units of Open- End Funds in India at the related prices of Net Asset Value (NAV) each day. An investor can buy Open- End Funds in India either from a brokerage house or through the mutual fund company. Open- End Funds in India have no fixed date of maturity. The main advantage of Open- End Funds in India is that it offers liquidity to the investors for they can sell the units whenever they need the money.

i) International mutual funds are a very special type of mutual fund, wherein investments are being made in the non-domestic securities markets across the world. The popularity of the International mutual funds has gone up in the recent years since it provides a high level of diversification of the portfolio. Further, the International mutual funds also help in capitalizing on some of the worlds best opportunities. International mutual funds can offer its investors with high returns if chosen properly. One of the significant features of the International mutual funds are that it accrues

22

profit when some markets are rising and others are falling in the international market. A strict vigil on the foreign currencies and world markets is needed while investing in the International mutual funds.

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CHAPTER 5
COMPETITION

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5.1 Herfindahl Index The Herfindahl index is a measure of the size of firms in relation to the industry and an indicator of the amount of competition among them.

Average Assets under Management (AAUM) for the month of Mar-2011 (Rs in Lakhs)

Sr. No. 1

2 3 4 5 6 7 8 9 10 11 12 13 14

Mutual Fund Name AEGON Mutual Fund AIG Global Investment Group Mutual Fund Axis Mutual Fund Baroda Pioneer Mutual Fund Benchmark Mutual Fund Bharti AXA Mutual Fund Birla Sun Life Mutual Fund BNP Paribas Mutual Fund Canara Robeco Mutual Fund Daiwa Mutual Fund Deutsche Mutual Fund DSP BlackRock Mutual Fund Edelweiss Mutual Fund Escorts Mutual Fund

Average AUM N/A

Market share (%)

HHI

79589.78 830169.78 258479.18 340363.29 28857.55 6369619.52 467418.11 782363.49 24390.25 818660.04 3060071.21 18196.96 19685.4

0.113612416 1.185046549 0.36897255 0.485860064 0.041193429 9.092472182 0.667227634 1.116804269 0.03481647 1.168616684 4.368174938 0.025975704 0.028100415

0.012908 1.404335 0.136141 0.23606 0.001697 82.67305 0.445193 1.247252 0.001212 1.365665 19.08095 0.000675 0.00079

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15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Fidelity Mutual Fund Franklin Templeton Mutual Fund Goldman Sachs Mutual Fund HDFC Mutual Fund HSBC Mutual Fund ICICI Prudential Mutual Fund IDBI Mutual Fund IDFC Mutual Fund ING Mutual Fund JM Financial Mutual Fund JPMorgan Mutual Fund Kotak Mahindra Mutual Fund L&T Mutual Fund LIC NOMURA Mutual Fund Mirae Asset Mutual Fund Morgan Stanley Mutual Fund Motilal Oswal Mutual Fund Peerless Mutual Fund Pramerica Mutual Fund PRINCIPAL Mutual Fund Quantum Mutual Fund Reliance Mutual Fund Religare Mutual Fund Sahara Mutual Fund SBI Mutual Fund Sundaram Mutual

907440.44 3788271.74 N/A 8628224.46 445219.73 7346610.81 352780.47 2101865.66 130132.46 591783.18 340957.1 3220247.1 402984.3 1119557.16 37950.32 207609.65 30051.9 420214.03 162936.5 524622.65 12359.94 10157660.46 1150495.91 17920.9 4167180.19 1447858.09

1.295348479 5.407662939

1.677928 29.24282

12.31657411 0.635540003 10.48710276 0.503585277 3.000360537 0.185760824 0.844755654 0.486707713 4.596822006 0.575249986 1.598139779 0.05417313 0.296357571 0.042898334 0.599844993 0.232587769 0.748885681 0.017643504 14.49980566 1.642304069 0.025581635 5.948545253 2.066781127

151.698 0.403911 109.9793 0.253598 9.002163 0.034507 0.713612 0.236884 21.13077 0.330913 2.554051 0.002935 0.087828 0.00184 0.359814 0.054097 0.56083 0.000311 210.2444 2.697163 0.000654 35.38519 4.271584

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41 42 43 Grand Total

Fund Tata Mutual Fund Taurus Mutual Fund UTI Mutual Fund

2268110.53 255976.85 6718882.58 70053769.67

3.237670921 0.365400536 9.591036445 100

10.48251 0.133518 91.98798 790.135

It is calculated by squaring the market share of each firm competing in a market, and then summing the resulting numbers. The HHI number can range from close to zero to 10,000. It expressed as: HHI = s1^2 + s2^2 + s3^2 + ... + sn^2 (where sn is the market share of the ith firm).

The closer the Herfindahl index towards the 10000 is to being a monopoly, the higher the market's concentration (and the lower its competition). If, for example, there were only one firm in an industry, that firm would have 100% market share, and the HHI would equal 10,000 (100^2), indicating a monopoly. Or, if there were thousands of firms competing, each would have nearly 0% market share, and the HHI would be close to zero, indicating nearly perfect competition.

After calculation the Herfindahl index of Mutual Fund, I have found it to be 790.13 which indicate the Perfect competition in the Mutual Fund industry.

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7.1 Michael Portal Analyses: 1) Competitive Rivalry: In Mutual fund industry, competition is too high. Many Fund houses offer large number of schemes. 2) Threat of Substitute Products: It means many companies offer similar types of product, which create threats for new companies because of substitute of there product is being offered by there major competitors. 3) Bargaining Power of Supplier: In Mutual Fund industry, Supplier would be the Stock Market which provides valuable stock to the various schemes of Fund houses. Fund Manager has Bargaining power in the form of analytical skill to select most valuable and inexpensive scripts for its Portfolios. 4) Bargaining Power of Customer: Customers of Mutual Funds industry would Bargain on the basis of returns and Expense ratio (Expense incurred in managing the Fund) of various schemes. Customer would choose the funds, which have low Expense ratio and probably give high return in future. 5) Threats of New Entrance: In Mutual Fund Industry, new players would be abandon due to Market regulator SEBIs policy like removing the entry load, many legal requirement ect. Also, volatility in the Stock market and high competition level would force new player to keep themselves away form the industry.

Bargaining power of Customers

Threats of New Entrance

Bargaining Power of Supplier

Competitive Rivalry within an Industry

Threats of Substitute products

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CHAPTER 6
GROWTH DRIVERS OF INDUSTRY

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6. GROWTH DRIVERS: Although several macroeconomic and development factors affect the growth of the industry, the key underlying driver for all the categories of fund is the key economic indicator the GDP growth rate. The Growth Drivers of Customer segments are follows: a) Retail Segment Rising disposable income and savings. Favorable demographics such as increasing proportion of working population (20-59 years) and increasing urbanization resulting in increased levels of financial savviness. Innovation in distribution. Increasing awareness level. Quality financial planning.

b) Institutional Segment: Rising corporate earning Maturing capital market Interest rate cycle Call money market rate Corporate debt and commercial paper

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CHAPTER 7
ISSUE AND CONCERN

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7. ISSUE AND CONCERN: LOW customer awareness level and financial literacy pose the biggest challenge to channelizing household saving into mutual find. Further fund houses have shown limited focus on increasing retail penetration and building retail AUM. Most of the AUMs and distributers have a limited focus beyond the top 20 cities that is manifested in limited distribution channels and investors servicing, The Indian mutual fund industry has largely been product led and not sufficiently customer focused with limited focus being accorded by players to innovative and new product development .Further there is limited flexibility in fees and pricing structure currently. Distributors and the mutual fund houses have exhibited limited interest in continuously engaging with customer post closure of sale as the commission and incentive have been largely in the form of upfront fees from product sales. Limited focus of the public sector network including public sector banks, Indian post, ect on the Distribution of mutual funds has also impeded the growth of the industry. Further multiple regulatory framework govern different verticals within the financial services sectors ,such as different policies pertaining to the PAN card requirement, KYC(Know your client) requirement , mode of payment (cash v/s cheque), funds management by insurance companies and commission structure, among others.

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CHAPTER 8
CASE STUDY

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Major Assets Management Companies (AMCs)

8.1. UTI MUTUAL FUND: UTI Mutual Fund was started in 14, January 2003 by UTI Trustee Co, Pvt. Ltd. for managing the schemes of UTI Mutual Fund. UTIAMC provides professionally managed back office support for all business services of UTI Mutual Fund in accordance with the provisions of the Investment Management Agreement, the Trust Deed, the SEBI Regulations and the objectives of the schemes. Since February 3, 2004, UTIAMC is also a registered portfolio manager under the SEBI for undertaking portfolio management services. UTIAMC also acts as the manager and marketer to offshore funds through its 100 % subsidiary, UTI International Limited, registered in Guernsey, Channel Islands. UTIAMC presently manages a capital of over Rs. 65, 38,724.42 lakhs as on 31st December 2010. UTI Mutual Fund has a track record of managing a variety of schemes catering to the needs of every class of citizens. It has a nationwide network consisting 148 UTI Financial Centers (UFCs) and UTI International offices in London, Dubai and Bahrain. UTIAMC has a well-qualified, professional fund management team, which has been fully empowered to manage funds with greater efficiency and accountability in the sole interest of the unit holders. UTIMF has consistently reset and upgraded transparency standards. All the branches, UFCs and registrar offices are connected on a robust IT network to ensure costeffective quick and efficient service. Schemes taken for analysis from UTI Mutual Fund are: 8.1.1 UTI Divided Yield Fund(G) : The investment objective of the Scheme is "to provide medium to long term capital gains and/or dividend distribution by investing predominantly in equity and equity related instruments, which offer high dividend

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yield. There can be no assurance that the investment objectives of the scheme will be realized." Fund overview: Fund TypesInvestment PlanAssets SizesLaunch dateBench markFund ManagerOpen Ended Growth 2,998.41 (Mar-31-2011) May 03, 2005 BSE 100 Swati Kulkarni

8.1.2 UTI Large Equity Fund (G): The Scheme is designed specifically for large corporate investors and as well as high net worthy investors who would like to invest large amount in exclusive Scheme which allows entry and exit at NAV. Fund overview: Fund TypesInvestment PlanAssets SizesLaunch dateBench markFund ManagerOpen Ended Growth 2,006.93 (Mar-31-2011) May18, 1992 BSE sensitive index Mr. Anoop Bhaskar

8.2. BIRLA SUNLIFE MUTUAL FUND: Birla Sun Life Asset Management Company Ltd. (BSLAMC) is a joint venture between the Aditya Birla Group and the Sun Life Financial Services Inc. of Canada. The joint venture brings together the Aditya Birla Group's experience in the Indian market and Sun Life's global experience.

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Birla Sunlife Mutual Fund is established in 1994 .It offer a range of investment options, including diversified and sector specific equity schemes, fund of fund schemes, hybrid and monthly income funds, a wide range of debt and treasury products and offshore funds. BSLAMC is one of the largest team of research analysts in the industry, dedicated to tracking down the best companies to invest in. BSLAMC strives to provide transparent, ethical and research-based investments and wealth management services. Schemes taken for analysis from BIRLA SUNLIFE MUTUAL FUND are: 8.2.1Birlasunlife Advantage Fund: To achieve long-term growth of capital through investments mainly in equity and equity related instruments. Fund overview: Fund TypesInvestment PlanAssets SizesLaunch dateBench markFund ManagerOpen Ended Growth 347.31 (Mar-31-2011) Feb 24, 1995 BSE Sensitive index Mr. Ajay Argal

8.2.2BirlaSunlife Small & Midcap Fund: It objective is to generate consistent long-term capital appreciation by investing predominantly in equity and equity related securities of companies considered to be small and mid cap. It may also invest a certain portion of its corpus in fixed income securities including money market instruments, in order to meet liquidity requirements from time to time. Fund overview Fund TypesInvestment PlanAssets SizesOpen Ended Growth 143.73 (Mar-31-2011

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Launch dateBench markFund Manager-

Apr 9, 2007 CNX MID CAP Mr. Ankit Sancheti

8.3. FRANKLIN TEMPLETION MUTUAL FUND: Franklin Templeton Investments is one of the largest financial services groups in the world based at San Mateo, California USA. The group has US$ 642.3 billion in assets under management globally. Franklin Templeton has offices in 33 locations across India and manages average AUM of Rs. 42142.21 crores for over 22 lakhs investors (as on September 30, 2010). Schemes taken for analysis from Franklin Templation Mutual Fund are: 8.3.1 Franklin Templation FMCG Fund (G): The scheme aims to achieve long term capital appreciation through exclusively investing in shares of Fast Moving Consumer Goods Companies. Fund overview: Fund TypesInvestment PlanAssets SizesLaunch dateBench markFund ManagerOpen Ended Growth Rs 54.22crores Mar 31, 1999 NA Anil Prabhudas

8.3.2 Franklin Bluechip Fund (G): Scheme aim is to achieve a high degree of capital appreciation through investments in well-established, large size blue chip companies. Fund Overview: Fund TypesInvestment PlanOpen Ended Growth

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Assets SizesLaunch dateBench markFund Manager-

3,396.49 Nov 30, 1993 BSE Sensitive Index Anand Radhakrishnan / Anand Vasudevan /

8.4. HDFC MUTUAL FUND: HDFC Asset Management Company Ltd (AMC) was incorporated under the Companies Act, 1956, on December 10, 1999, and was approved to act as an Asset Management Company for the HDFC Mutual Fund by SEBI vide its letter dated July 3, 2000. In terms of the Investment Management Agreement, the Trustee has appointed the HDFC Asset Management Company Limited to manage the Mutual Fund. The paid up capital of the AMC is Rs. 25.161 crore. The AMC is managing 28 open-ended schemes of the Mutual Fund some are HDFC Growth Fund, HDFC Equity Fund, HDFC Top 200 Fund, HDFC Capital Builder Fund, HDFC Core & Satellite Fund, HDFC Premier Multi-Cap Fund, and HDFC Index Fund. The AMC is also managing 7 closed ended Schemes some are HDFC Long Term Equity Fund, HDFC Infrastructure Fund, and HDFC Fixed Maturity Plans - Series XI, HDFC Fixed Maturity Plans - Series XII.The AMC is also providing portfolio management / advisory services. The schemes taken for analysis from HDFC MUTUAL FUND are: 8.4.1 HDFCTop200 Fund: It objective is to generate long term capital appreciation by investing in a portfolio of equities and equity linked instruments drawn from the BSE 200 Index. Fund Overview: Fund TypesInvestment PlanOpen Ended Growth

38

Assets SizesLaunch dateBench markFund Manager-

Rs. 9,591.26 (Mar-31-2011) Oct 27, 2004 BSE 200 index Mr. Prashant Jain

8.4.2 HDFC Balance Fund (G): The primary objective of the Scheme is to generate capital appreciation along with current income from a combined portfolio of equity & equity related and debt & money market instruments. Fund Overview: Fund TypesInvestment PlanAssets SizesLaunch dateBench markFund ManagerOpen Ended Growth 260.12 (April 29, 2011) September 11, 2000 NA Mr. Chirag Setalvad

8.5. KOTAK MAHINDRA MUTUAL FUND: Kotak Mahindra is one of India's leading financial institutions, 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 corporate. The group has a net worth of Rs.7,911 crore and employs around 20,000 employees across its various businesses, servicing around 7 million customer accounts through a distribution network of 1,716 branches, franchisees and satellite offices across more than 470 cities and towns in India and offices in New York, California, San Francisco, London, Dubai, Mauritius and Singapore. Kotak Mahindra Asset Management Company Limited (KMAMC), a wholly owned subsidiary of KMBL, is the Asset Manager for Kota Mahindra Mutual Fund (KMMF).

39

KMAMC started operations in December 1998 and has over 10 Lac investors in various schemes. KMMF offers schemes catering to investors with varying risk return profiles and was the first fund house in the country to launch a dedicated gilt scheme investing only in government securities. The schemes taken for analysis from KOTAK MAHINDRA Mutual Fund are: 8.5.1 Kotak Mahindra Midcap Fund (G): The investment objective of Kotak Midcap is to generate capital appreciation from a diversified portfolio of equity & equity related securities. The scheme predominantly invests in companies in the mid market capitalization segment across sectors. The scheme is well positioned to provide the benefit of potential growth offered by mid cap stocks which are likely to become tomorrows large caps. Fund overview: Fund TypesInvestment PlanAssets SizesLaunch dateBench markFund ManagerOpen Ended Growth 277.76 (Mar-31-2011) Jan 28, 2005 CNX Nifty junior Mr. Pankaj Tibrewal

8.5.2 Kotak Equity FOF: To generate long-term capital appreciation from a portfolio created by investing predominantly in open-ended diversified equity schemes of Mutual Funds registered with SEBI. Fund overview: Fund TypesInvestment PlanAssets SizesOpen Ended Growth 44.63 (Mar-31-2011)

40

Launch dateBench markFund Manager-

Aug 09, 2004 NA Mr. Sajit Pisharodi

8.6. RELIANCE MUTUAL FUND: Reliance Mutual Fund is Indias leading Mutual Fund with Quarter Average Assets under management (AAUM) of Rs 102066Crores. Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is one of the fastest growing mutual funds in the country. RMF offers investors a wellrounded portfolio of products to meet varying investor requirements and has presence in 159 cities across the country. Reliance Mutual Fund constantly endeavors to launch innovative products and customer service initiatives to increase value to investors. "Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management Limited., a subsidiary of Reliance Capital Limited, which holds 93.37% of the paid-up capital of RCAM. The schemes taken for analysis from Reliance Mutual Fund are: 8.6.1 Reliance Banking Fund (G): The primary investment objective of the Scheme is to seek to generate continuous returns by actively investing in equity and equity related or fixed income securities of companies in the Banking Sector. Fund overview: Fund TypesInvestment PlanAssets sizesLaunches dateBenchmarkFund ManagerOpen Ended Growth 1,647.46 (Mar-31-2011 May21, 2003 Bank Nifty Mr. Sunil Singhania

41

8.6.2Rliance Media & Entertainment Fund (G) : It generate consistent returns by investing in equity / equity related or fixed income securities of media & entertainment and other associated companies. Fund overview: Fund TypesInvestment PlainAssets sizesLaunch dateBenchmarkFund ManagerOpen Ended Growth 77.47 (Mar-31-2011) Sep 27, 2007 NA Mr. Sailesh raj Bhan

8.7. SBI MUTUAL FUND: SBI Mutual Fund is Indias largest bank sponsored mutual fund and has a track record in judicious investments and consistent wealth creation. The fund traces its lineage to SBI - Indias largest banking enterprise. The institution has grown immensely since its inception and today it is India's largest bank, patronized by over 80% of the top corporate houses of the country. SBI Mutual Fund is a joint venture between the State Bank of India and Society General Asset Management, one of the worlds leading fund management companies that manages over US$ 500 Billion worldwide. In twenty years of operation, the fund has launched 38 schemes and successfully redeemed fifteen of them. In the process it has rewarded its investors handsomely with consistent returns.

42

A total of over 5.8 million investors have reposed their faith in the wealth generation expertise of the Mutual Fund. Today, the fund manages over Rs. 42,100 crores of assets and has a diverse profile of investors actively parking their investments across 38 active schemes. The fund serves this vast family of investors by reaching out to them through network of over 130 points of acceptance, 29 investor service centers, 59 investor service desks and 6 Investor Service Points. SBI Mutual is the first bank-sponsored fund to launch an offshore fund Resurgent India Opportunities Fund. The schemes that I have taken for analysis from SBI Mutual Fund are: 8.7.1SBI Magnum Sector Umbrella Pharma(G): It provides the investors maximum growth opportunity through equity investments in stocks of growth oriented sector called Pharma in long run.

Fund overview: Fund TypesInvestment PlanAssets SizesLaunch dateBench markFund ManagerOpen Ended Growth 38.70 (Dec-31-2010) JUL 14, 1999 BSE health care Mr. Sohini Andani

8.7.2 SBI Magnum Equity Fund (G): To provide investors long term capital appreciation along with the liquidity of an open-ended scheme. The scheme will invest in a diversified portfolio of equities of high growth companies. Fund overview: Fund TypesInvestment PlanOpen Ended Growth

43

Assets SizesLaunch dateBench markFund Manager-

466.01 (Dec-31-2010) jan 1, 1991 BSE 100 Mr. R Srinivasan

8.8. SUNDARAM BNB PARIBAS MUTUAL FUND: Sundaram Mutual, identifying an investment opportunity long before it manifests as one, is the heart of our business belief. Being in the financial sector for a long time has given us a great understanding of the Indian economy and that guides us while picking the companies for its Funds. Once it unearth a potential opportunity, its Financial Experts spend countless time to research the companies, to see what will deliver the best returns for your money. Its financial experts are fine tuned to the larger global picture and all its complexities as well as the intricacies of the Indian market. We track global economic trends and market behavior to better understand the domestic markets. We are constantly on the trail of promising opportunities and once identified, a new theme is thoroughly researched and tested on various platforms before being offered to the investing public. The schemes taken for analysis from are: SUNDARAM BNB PARIBAS Mutual Fund

44

8.8.1 Sundaram Select Midcap Fund (G): Sundaram Select Mid Cap Fund is an open ended equity scheme that seeks capital appreciation by investing in diversified stocks that are generally termed as mid -caps. Fund overview: Fund TypesInvestment PlanAssets SizesLaunch dateBench markFund ManagerOpen Ended Growth 2,074.10 (Mar-31-2011) Jul 19, 2002 BSE Mid cap index Mr. Satish Ramanathan

8.8.2 Sundaram BNB Paribas select Smallcap Fund(G): The primary investment objective of the scheme is to generate consistent long-term returns by investing predominantly in equity/equity related instruments of companies that can be termed as small cap. Fund objective: Fund TypesInvestment PlanAssets SizesLaunch dateBench markFund Manager8.9. RELIGARE MUTUAL FUND: Religare Mutual Fund is managed by Religare Asset Management Company Limited, a subsidiary of Religare Securities Limited (RSL). The AMC was incorporated on May 20, 2005 and the mutual fund was set up on July 24, 2006. Open Ended Growth 315.97 (Mar-31-2011) Jan 24, 2006 BSE Small cap index Mr. Satish Ramanathan

45

It manages Assets around Rs104 billion dollars. Religare Asset Management aims to serve investment needs of individual investors, corporate and institutions through mutual funds and sub-advised portfolios. Its product portfolio is managed by individually focused management teams to create optimum balance and results. They are committed to providing financial care and top class service. They subscribe to sustainable business models and process that factor in the dynamism of the business in fast changing market scenarios.

The schemes taken for analysis from Religare Mutual Fund are: 8.9.1 Religare Small & Midcap Fund: The Scheme seeks to provide long term capital appreciation by investing in a portfolio that is predominantly constituted of equity and equity related instruments of mid and small cap companies. Fund overview: Fund TypesInvestment PlanAssets SizesLaunch dateBench markFund ManagerOpen Ended Growth 15.05 (Mar-31-2011) Jan 7, 2008 NA Mr. Vinay Paharia

8.9.2 Religare Equity Fund (G): The investment objective of the Scheme is to generate long-term capital growth from a focused portfolio of predominantly equity and equity-related securities. Fund overview: Fund TypesInvestment PlanAssets SizesLaunch dateOpen Ended Growth 21.01 (Mar-31-2011) Sep 07, 2007

46

Bench markFund Manager-

BSE 100 Vetri Subramaniam

8.10. TATA MUTUAL FUND: Tata Mutual Fund has earned the trust of lakhs of investors with its consistent performance and world-class service. It manages around Rs20,854.00 crores (average AUM for the quarter of OctoberDecember 2010) worth of assets across its varied offerings. Tata Mutual Fund offers an investment option for everyone, whether you are a businessman or salaried professional, a retired person or housewife, an aggressive investor or a conservative capital builder. The Tata Asset Management philosophy is centered on seeking consistent, long-term results. Tata Asset Management aims at overall excellence, within the framework of transparent and rigorous risk controls. Tata Mutual Fund offers investors a broad range of managed investment products in various asset classes and risk parameters, with operational flexibility to suit their varied investment needs. It offer a wide range of services to assist investors have a fulfilling and rewarding financial planning experience with us. It has designed our services keeping in mind the needs of our investors, giving them a smooth and hassle-free financial planning process. The schemes taken for analysis from TATA Mutual Fund are:

8.10.1 Tata Dividend yield Fund (G): To Provide income distribution and / or medium to long term capital gains by investing predominantly in high dividend yield stocks. Fund overview:

47

Fund TypesInvestment PlanAssets SizesLaunch dateBench markFund Manager-

Open Ended Growth 178.86 (Mar-31-2011) Oct 27, 2004 BSE Sensitive index Mr. Mahendra Jajoo / Sachin Relekar

8.10.2 TATA OPPORTUNITY FUND (G):

It aims to provide a vehicle to enable

investors to avail tax benefits u/s 88 and distributing a reasonable annual dividend if any, and at the same time making an attempt for capital appreciation.

Fund overview: Fund TypesInvestment PlanAssets SizesLaunch dateBench markFund ManagerOpen Ended Growth 346.58 (Mar-31-2011) Mar 30, 1993 BSE Sensitive index Mr. M Venugopal

8.11. DSP BlackRock Mutual Fund DSP BlackRock Investment Managers Pvt. Ltd. is the investment manager to DSP BlackRock Mutual Fund. The philosophy of DSP BlackRock Investment Managers Pvt. Ltd. has been grounded in the belief that experienced investment professionals, using a disciplined process and sophisticated analytical tools, can consistently add value to client portfolios.

48

DSP BlackRock Investment Managers Pvt. Ltd. takes a three dimensional approach to the management of the organization, incorporating functional, product and regional elements in support of clients' goals. The functional dimension looks at the company's operations by specific task, such as portfolio management, account management or operations. The product dimension brings together the cross-disciplinary expertise critical to managing client assets in each class. Finally, the regional aspect of the company's model recognizes the unique, geography-specific needs of clients as well as the importance of local regulatory issues. With our three-dimensional approach to managing the organization, we seek to:

Ensure consistency on a global basis; Allow for the tailoring of products and services according to client or local needs;

Promote teamwork among our employees worldwide; and Facilitate operational integrity and efficiency

The schemes taken for analysis from DSP Black Rock Mutual Fund are: 8.11.1 DSP Black Rock Balance Fund(G): It Seeks to generate long term capital appreciation and current income from a portfolio constituting equity and equity related securities as well as fixed income securities Fund overview: Fund TypesInvestment PlanAssets SizesLaunch dateBench markFund ManagerOpen Ended Growth 748.25 (Mar-31-2011) May 15, 1999 NA Mr. Apoorva Shah

8.11.2 DSP Equity Fund Institutional Plan(G): The DSP Merrill Lynch Equity Fund is an open-ended growth scheme seeking to generate long-term capital appreciation,

49

from a portfolio which is substantially constituted of equity and equity related securities of issuers domiciled India. The scheme may also invest a certain portion of its corpus in debt and money market securities, in order to meet liquidity requirements from time to time. Fund overview: Fund TypesInvestment PlanAssets SizesLaunch dateBench markFund ManagerOpen Ended Growth 101.47 (Mar-31-2011) Apr 01, 2007 BSE 100 Mr. Apoorva Shah

8.12.ICICI Prudential Mutual Fund:

ICICI Prudential Asset Management Company Ltd. is a joint venture between ICICI Bank, Indias second largest commercial bank & a well-known and trusted name in the financial services in India, & Prudential Plc, one of the United Kingdoms largest players in the financial services sectors.

In a span of just over 12 years, the company has forged a position of preeminence as one of the largest Asset Management Companys in the country, contributing significantly towards the growth of the Indian mutual fund industry.

50

Our Average Assets under Management (AAUM) as on Mar 2011 Month-end in Mutual Fund Schemes stood at Rs. 73551.95 Crores. This is in addition to our Portfolio Management Services, inclusive of EPFO*, and International Advisory Mandates for clients across international markets in asset classes like Debt, Equity and Real Estate with primary focus on risk adjusted returns.

As an Asset Management Company, we have over 15 years of experience and are currently managing a comprehensive range of schemes of more than 46 Mutual funds and a wide range of PMS Products for our investors, spread across the country. We service this investor base with our own branch network of over 160 branches and a distribution reach of over 42,000 channel partners. The schemes taken for analysis from ICICI Prudential Mutual Fund are: 8.12.1 ICICI Prudential Balance (G): To seek to generate long term capital appreciation and current income from a portfolio that is invested in equity and equity related securities as well as in fixed income & money market securities.

Fund overview: Fund TypesInvestment PlanAssets SizesLaunch dateBench markFund ManagerOpen Ended Growth 263.95 (Mar-31-2011) Oct 07, 1999 NA Rahul Goswami/Munzal Shah/Mrinal Singh

8.12.2 ICICI Prudential Blended Plan (G): To generate efficient risk adjusted return for the investor by using arbitrage opportunity in equity and equity derivative market. Fund overview:

51

Fund TypesInvestment PlanAssets SizesLaunch dateBench markFund Manager-

Open Ended Growth 60.90 (March 31, 2011) May 31, 2005 NA Mr. Devang Shah

8.13. IDFC Mutual Fund IDFC is a leading private sector diversified financial institution established by a consortium of strong global and local institutions with the support and sponsorship of the Government of India. A majority of IDFCs shareholding (67% as of March 31, 2008) is held by reputed global stalwarts that include respectable names like Government of India, International Finance Corporation (IFC) - a member of the World Bank Group, Government of Singapore, AIG, Morgan Stanley, Goldman Sachs, Citigroup, JP Morgan among others. The best Indian financial institutions such as HDFC, LIC, SBI, and IDBI are owners in IDFC, making it an institution of high repute and standing. The schemes taken for analysis from IDFC Mutual Fund are: 8.13.1 IDFC Fixed Maturity Plan 3Plan A(G):

Fund overview: Fund TypesInvestment PlanAssets SizesLaunch dateBench markFund ManagerOpen Ended Growth 0.82 (Dec-31-2010) Sep 23, 2009 NA Anupam Joshi

52

8.13.2 IDFC Equity (G): To generate long-term capital growth from an actively managed portfolio of predominantly equity and equity related instruments. The Scheme portfolio would acquire, inter alia, small and medium size businesses with good long term potential, which are available at cheap valuations. Such securities would be identified through disciplined fundamental research keeping in view medium to long-term trends in the business environment.

Fund overview: Fund TypesInvestment PlanAssets SizesLaunch dateBench markFund ManagerOpen Ended Growth 2103.57 (April 29, 2011) September 28, 2005 NA Mr. Kenneth Andrade

8.14. Canara Robeco Mutual Fund: Canara Robeco Asset Management Company Limited (CRAMC), the investment managers of Canara Robeco Mutual Fund, is a joint venture between Canara Bank and Robeco of the Netherlands, a global asset management company that manages about US$180 Billion worldwide. The joint venture brings together Canara Bank's experience in the Indian market and Robeco's global experience in asset management. Canara Robeco Mutual Fund is the oldest Mutual Fund in India, established in December 1987 as Canbank Mutual Fund. Subsequently, in 2007, Canara Bank partnered Robeco and the mutual fund was renamed as Canara Robeco Mutual Fund. Since then, it has consistently been one of the fastest growing mutual funds in India in terms of AuM, having grown 94% year-on-year from March 2009 to March 2010. Our solutions offer a range of investment options, including diversified and thematic equity schemes, hybrid and monthly income funds and a wide range of debt and treasury products.

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Canara Robeco AMC manages the assets of Canara Robeco Mutual Fund by virtue of an investment management agreement dated 16th June 1993 (as amended from time to time). As of 31 December 2010, the AMC has Rs. 7,392 crores of average assets under management and has a diverse profile of investors invested across 20 active schemes.

8.14.1 Canara Robeco Balance Growth Plan: The investment objective of the scheme is to generate long-term capital appreciation and/or income from a portfolio constituted of equity and equity related securities as well as fixed income securities. The schemes taken for analysis from Canara Robeco Mutual Fund are: Fund overview: Fund TypesInvestment PlanAssets SizesLaunch dateBench markFund ManagerOpen Ended Growth NA March 31, 2000 NA Mr. Soumendra Nath Lahiri

8. 14.2 Canara Robeco Infrastructure (G): To generate income/capital appreciation by investing in equities and equity related instruments of companies in the infrastructure sector.

Fund overview: Fund TypesInvestment PlanAssets SizesLaunch dateBench markFund ManagerOpen Ended Growth NA December 02, 2005 BSE 100 Mr. Soumendra Nath Lahiri

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8.15.Axis Mutual Fund Axis Bank was the first of the new private banks to have begun operations in 1994, after the Government of India allowed new private banks to be established. The Bank was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI - I), Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC) and other four PSU insurance companies, i.e. National Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance Company Ltd. The Bank as on 31st December, 2010 is capitalized to the extent of ` 409.90 crores with the public holding (other than promoters and GDRs) at 53.62%. The Bank's Registered Office is at Ahmedabad and its Central Office is located at Mumbai. The Bank has a very wide network of more than 1281 branches (including 169 Service Branches/CPCs as on 31st December, 2010). The Bank has a network of over 5303 ATMs (as on 31st December, 2010) providing 24 hrs a day banking convenience to its customers. This is one of the largest ATM networks in the country. The Bank has strengths in both retail and corporate banking and is committed to adopting the best industry practices internationally in order to achieve excellence. The schemes taken for analysis from Axis Mutual Fund are: 8.15.1 Axis Equity (G): To achieve long term capital appreciation by investing in a diversified portfolio predominantly consisting of equity and equity related securities including derivatives.

Fund overview: Fund TypesInvestment PlanAssets SizesOpen Ended Growth 760.41 (April 29, 2011)

55

Launch dateBench markFund Manager-

November 11, 2009 NA Mr. Chandresh Nigam

8.15.2 Axis Tax Saver (G): The investment objective of the Scheme is to generate income and long-term capital appreciation from a diversified portfolio of predominantly equity and equity-related Securities. Fund overview: Fund TypesInvestment PlanAssets SizesLaunch dateBench markFund ManagerOpen Ended Growth 73.28 (Mar-31-2011) December 17, 2009 BSE 200 Mr. Chandresh Nigam

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CHAPTER 9
PERFORMANCE SHEETS

9.1Performance Sheet (Risk adjusted Return) on the Basis of Sharpe Ratio:

Rank 1.

Schemes HDFC Balance Fund(G)

Sharpe Ratio 2.31

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2. 3. 4. 5. 6. 7. 8 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21.

Franklin FMCG(G) Reliance Banking(G) Tata Dividend yield Fund(G) Axis Tax Saver(G) Religare Small & Midcap fund Kotak Midcap Fund(G) SBI Magnum Sector Umbrella Pharma(G) UTI Devidend yield(G) ICICI Prudential Balance (G) DSP Equity Fund Institutional Plan(G) HDFC Top200 Franklin bluechip(G) ICICI Prudential Blended Plan (G) Canara Robeco Balance Growth Plan Sundaram Select Midcap Fund (G) UTI Equity (G)

2.15 1.98 1.79 1.77 1.65 1.30 1.30 1.35 1.28 1.25 1.24 1.23 1.07 1.04 1.02 0.97

SBI Magnum Equity Fund(G) Religare Equity fund(G) Birlasunlife small&midcap Fund

0.94 0.89 0.79

Sundaram BNB Paribas select Smallcap 0.76 Fund(G)

22. 23. 24. 25. 26. 27. 28. 29.

IDFC Equity (G) DSP Black Rock Balance Fund(G) Reliance Media & Entertainment Canara Robeco Infrastructure (G) Birlasunlife Advantage Fund(G) Tata Opportunity Fun (G) Axis Equity(G) Kotak Equity FOF

0.74 0.64 0.53 0.44 0.43 0.33 -0.21 -0.89

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30.

IDFC Fixed Maturity Plan 3Plan A(G)

-0.98

9.2Performance Sheet (Risk adjusted Return) on the Basis of Treynor Ratio: Rank 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Schemes Franklin FMCG(G) HDFC Balance Fund(G) Reliance Banking(G) Religare Small & Midcap fund SBI Magnum Sector Umbrella Pharma(G) Tata Dividend yield Fund(G) Axis Tax Saver(G) Kotak Midcap Fund(G) DSP Equity Fund Institutional Plan(G) UTI Devidend yield(G) Sundaram Select Midcap Fund (G) Treynor Ratio 0.56 0.51 0.48 0.46 0.36 0.34 0.33 0.29 0.25 0.24 0.22

Sundaram BNB Paribas select Small cap 0.22 Fund(G)

13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24.

ICICI Prudential Balance (G) Canara Robeco Balance Growth Plan Birlasunlife small&midcap Fund Franklin Bluehip(G) HDFC Top200 UTI Equity (G) SBI Magnum Equity Fund(G) Reliance Media & Entertainment Religare Equity fund(G) DSP Black Rock Balance Fund(G) IDFC Equity (G) Canara Robeco Infrastructure (G)

0.22 0.22 0.21 0.21 0.21 0.17 0.16 0.15 0.15 0.13 0.12 0.08

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25. 26. 27. 28. 29. 30.

Birlasunlife Advantage Fund(G) Tata Opportunity Fun (G) Axis Equity(G) ICICI Prudential Blended Plan (G) Kotak Equity FOF IDFC Fixed Maturity Plan 3Plan A(G)

0.07 0.06 -0.039 -0.32 -0.98 -1.10

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CHAPTER 10
FINDINGS AND RECOMMENDATIONS

10.1 FINDINGS:

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1) Sharpe Ratio of HDFC Balance Fund is(2.31) highest among the ranking of 30 Schemes, followed by Franklin FMCG(2.15),Reliance

Banking(1.98) ect.Which shows there Risk-adjusted return is Excellent. 2) Sharpe Ratio of Axis Equity(-0.21),Kotak Equity fof(-0.89) and IDFC Fixed Maturity Plan(-0.98) are in negative which shows there Risk adjusted return worse. 3) Treynor Ratio of Franklin FMCG(0.56) is highest, followed by HDFC Balance fund(0.51),Reliance Banking(0.48),Religare small& midcap(0.46), ect.which shows there Risk-adjusted return on overall market is Excellent. 4) Treynor Ratio of Axis Equtiy(-0.03), ICICI Blended Plan(-0.32), Kotak Equity fof(-0.98) and IDFC Fixed Maturity Plan(-1.10) are in negative ,which shows there Risk- adjusted return worse.

10.2 RECOMMENDATIONS: 1) According to me one should give priority to HDFC Balance Fund because its Shape ratio is highest and its Treynor ratio is second highest. 2) One should give second priority to Franklin FMCG because its Rank third on the basis of Sharpe ratio and first on the basis of Treynor ratio. 3) Moreover, investors should keep themselves away from Axis Equity ,Kotak Equity and IDFC Fixed Maturity Plan because there Sharpe ratios and Treynor ratios are negative which shows there worse performance 4) If any investor want to invest in any UTI Schemes ,he/she should give priority to UTI Devidend yield fund which in the 9th rank on the basis of the Sharpe ratio and 10th rank on the basis of the Treynor ratio.

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CHAPTER 11
REFERENCES

11.1) Web sites:

63 1) http://www.bluechipindia.co.in/ 2) http://www.franklintempletonindia.com 3) http://www.utimf.com 4) http://www.hdfcfund.com/ 5) http://mutualfund.birlasunlife.com 6) http://reliancemutual.com/ 7) http://investopedia.com 8) http://money.rediff.com 9) http://moneycontrol.com