A PROJECT ON STUDY ON ANALYSIS OF RISK &RETURN OF RELIANCE MUTUAL FUND, MUMBAI

Supervisor:
Name: - Mr. SUNIL KUMAR Designation: - SENIOR FACULTY Specialization: - FINANCE

Submitted By:
PRIYA BHATNAGAR

Enrollment No: 08061240038 MBA 1Vth Semester

Session 2008-10 DIRECTORATE OF DISTANCE EDUCATION GURU JAMBHESHWAR UNIVERSITY OF SCIENCE & TECNOLOGY

TABLE OF CONTENTS
1.) 1.1) 1.2) 1.3) 1.4) 1.5)
1.6)

Introduction and Rationale Of Topic Chosen Mutual Fund The Concept Mutual Fund Structure Classification of Mutual Funds Advantages of Mutual Fund Disadvantages of Mutual Fund History of Mutual Fund (Worldwide) Indian Mutual Industry-An Insight History Of Indian Mutual Fund Industry Indian Mutual Fund Industry Today Association of Mutual Funds in India (AMFI)
SEBI Regulations for Mutual Funds (1996)

1.7) 1.8) 1.9) 1.10)

1.11)

1.12) 1.13) 2.)

Future of Mutual Funds in India Risk Return Analysis of the Schemes Literature Review & Problem Statement 2.1) About Reliance Mutual Fund 2.2) Sponsor 2.3) The Asset Management Company 2.4) Reliance Mutual Fund Schemes

3.) Objectives & Research Methodology 4.) Analysis & Interpretation of Data
5.) 6.)

Findings & Conclusion Questionnaire

7.) Bibliography

1.) Introduction And Rationale Of Topic Chosen

1.1) Mutual Fund The Concept
A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. The flow Chart below describes broadly the work:-

1.2) Mutual Fund Structure

The above diagram gives an idea on the structure of an Indian mutual fund.

Sponsor: He is basically a promoter of the fund. For example Bank of

Baroda, Punjab National Bank, State Bank of India and Life Insurance Corporation of India (LIC) are the sponsors of UTI Mutual Funds. Housing Development Finance Corporation Limited (HDFC) and Standard Life Investments Limited are the sponsors of HDFC mutual funds. The fund sponsor raises money from public, who become fund shareholders. The pooled money is invested in the securities. Sponsor appoints trustees.

Trustees: Two third of the trustees are independent professionals who own
the fund and supervises the activities of the AMC. It has the authority to sack AMC employees for non-adherence to the rules of the regulator. It safeguards the interests of the investors. They are legally appointed i.e. approved by SEBI.

AMC: Asset Management Company (AMC) is a set of financial professionals

who manage the fund. It takes decisions on when and where to invest the

money. It doesnt own the money. AMC is only a fee-for-service provider. The above 3 tier structure of Indian mutual funds is very strong and virtually no chance for fraud.

Custodian: A Custodian keeps safe custody of the investments (related

documents of securities invested). A custodian should be a registered entity with SEBI. If the promoter holds 50% voting rights in the custodian company it cant be appointed as custodian for the fund. This is to avoid influence of the promoter on the custodian. It may also provide fund accounting services and transfer agent services. JP Morgan Case is one of the leading custodians.

Transfer Agents: Transfer Agent Company interfaces with the customers,

issue a funds units, help investors while redeeming units. Provides balance statements and fund performance fact sheets to the investors. CAMS are a leading Transfer Agent in India.

1.3) Classification of Mutual Funds

Mutual Funds

Return Based

Investment Based

Sector Based

Others

Income Funds

Equity

IT Industry

Commodity Funds

Growth Funds

Debt

Pharmaceutical Industry

Exchange Traded Funds

Conservative Funds

Balanced

Power Sector

Real Estate Funds

Tax Saving Schemes

Return based

I1.

Return based classification:

The investors of the mutual fund schemes are made to enjoy a good return in form of regular dividends or capital appreciation or a combination of these both. a) Income Funds Income funds are floated for the interest of investors who want to maximize current income. These funds distribute periodically the income earned by them, in the form of either a constant income at relatively low risk or in the form of maximum income possible with higher risk by the use of leverage. b) Growth Funds These Schemes have the objective to achieve an increase in the value of the underlying investments through capital appreciation, and they invest in growth oriented securities. c) Conservative Funds These funds offer a blend of good average returns and reasonable capital appreciation. These funds are very popular and are ideal for the investors who want both growth and income from their investment.

2. Investment Based Classification:

Mutual funds may also be classified on the basis of the kind of securities that they invest in:a) Equity Funds: Equities are a high risk-high return asset class; the same risk profile spills over to equity funds as well. However investors must take note of the fact that a large number of variations exist within the 'high risk' equity funds segment. For example a sector fund would be on the relatively higher scale in the risk-return paradigm when compared to an index fund, which simply tracks the movements in a chosen benchmark index. These funds invest most of their investible shares in equity shares of companies and undertake the risk associated with the investment in equity shares. In a developed market, Equity funds can be of different categories. For example, Blue Chip, FMCG, PSUs, etc. b) Short-Term Debt Funds:

There is a category of investors who have two critical needs that short-term debt funds help achieve. One they want to be invested for the short-term less than 6 months. Two- over this time frame, they are looking at preserving capital with a return that is superior to that of a fixed deposit of a comparable tenure. The reason why short-term debt funds can preserve capital better than long term debt funds is because they are invested in debt instruments of a shorter tenure. c) Balanced Fund: These funds have their portfolio consisting of a balanced mix of equity and bonds. The composition of these funds may vary depending upon the outlook of the market. Balanced funds invest their corpus in both equity and debt instruments in a predetermined ratio, say 60:40. An aggressive balanced fund would typically hold a higher portion of its assets in equities maybe as high as 70% of the total assets. On the other hand, a 'disciplined' balanced fund would maintain a conservative equity allocation during most times.

3. Sector Based Funds:

There are funds that invest in a specified sector of economy and they specialize in the said sector. However, they run the risk of not being able to diversify. Sector based funds are aggressive growth funds which make investments on the basis of assessed bright future for a particular sector. The specialty of sector funds rather oddly lies in the fact that they go against the very grain of mutual fund investing i.e. holding a diversified portfolio. That is why you will find some Asset Management Companies that swear against sector funds. Sector funds are launched with the intention of capitalizing on opportunities in a single sector.

4. Others:
a) Commodity Funds: It will invest directly in commodities or through shares of the commodity companies or through commodity futures contract .Most common example of such fund is precious-metal fund, Gold funds invest in Gold, Gold futures or shares of gold mines b) Exchange Traded Funds: It combines the best features of open end and closed structure. It tracks a market index and trades like a stock on the stock market. ETFs are not the index funds. c) Real Estate Funds: It can invest in real estate, Fund real estate developers, Buy shares of housing finance companies, Buy securitized assets.

Snapshot of Mutual Fund Schemes

Mutual Fund Type Money Market

Objective
Liquidity + Moderate Income + Reservation of Capital

Risk
Negligible

Investment Portfolio
Treasury Bills, Certificate of Deposits, Comm. Papers, Call, Money

Who should invest

Those who park their funds in current accounts or short-term bank deposits

Investme nt horizon
2 days - 3 weeks

Liquidity + ShortModerate term Income Funds (Floating short-term) Regular Bond Income Funds (Floating Long-term) Gilt Funds Security & Income

Little Interest Rate

Call Money, CPs, Treasury Bills, CDs, Shortterm Securities.

Those with surplus short-term funds

3 weeks 3 months

Credit Risk & Interest Rate Risk Interest Rate Risk High Risk

Predominantly Debentures, Govt. securities, Corporate Bonds Government securities Stocks

Salaried & conservative investors

More than 9- 12 months

Equity Funds

Long-term Capital Appreciation

Salaried & conservative investors Aggressive investors with long term Outlook.

12 months & more 3 years plus

T Index Fundso generate

returns that are commensurate with returns of respective indices

NAV Portfolio varies indices like with index BSE, NIFTY performanceetc

Aggressive Investors.

3 years plus

Balanced Funds

Growth & Regular Income

Capital Market and Interest Rate Risk

Balanced ratio of equity & debt funds to ensure higher returns

Moderate & Aggressive

2 years plus

1.4) Advantages of Mutual Fund

Diversification- Diversification involves the mixing of investments within a portfolio and is used to manage risk. By purchasing mutual funds,

you are provided with the immediate benefit of instant diversification and asset allocation without the large amounts of cash needed to create individual portfolios. Economies of scale- Mutual funds are able to take advantage of their buying and selling size and thereby reduce transaction costs for investors. When you buy a mutual fund, you are able to diversify without the numerous commission charges. Divisibility- Investors can purchase mutual funds in smaller denominations. Smaller denominations of mutual funds provide mutual fund investors the ability to make periodic investments through monthly purchase plans while taking advantage of dollar-cost averaging. So, rather than having to wait until you have enough money to buy higher-cost investments, you can get in right away with mutual funds. This provides an additional advantage liquidity. Liquidity- Another advantage of mutual funds is the ability to get in and out with relative ease. In general, you are able to sell your mutual funds in a short period of time without there being much difference between the sale price and the most current market value. Professional Management- When you buy a mutual fund, you are also choosing a professional money manager. This manager will use the money that you invest to buy and sell stocks that he or she has carefully researched. Therefore, rather than having to thoroughly research every investment before you decide to buy or sell, you have a mutual fund's money manager to handle it for you.

1.5) Disadvantages of Mutual Fund

Fluctuating returns- Mutual funds are like many other investments without a guaranteed return: there is always the possibility that the value of your mutual fund will depreciate. Unlike fixed-income products, mutual funds experience price fluctuations along with the stocks that make up the fund. When deciding on a particular fund to buy, you need to research the risks involved. Diversification- Although diversification is one of the keys to successful investing, many mutual fund investors tend to over diversify. The idea of diversification is to reduce the risks associated with holding a single security; over diversification occurs when investors acquire many funds that are highly related and, as a result, don't get the risk reducing benefits of diversification.

 Costs- Mutual funds provide investors with professional management, but it comes at a cost. Funds will typically have a range of different fees that reduce the overall payout. In mutual funds, the fees are classified into two categories: shareholder fees and annual operating fees. Evaluating Funds- Another disadvantage of mutual funds is the difficulty they pose for investors interested in researching and evaluating the different funds. Unlike stocks, mutual funds do not offer investors the opportunity to compare the P/E ratio, sales growth, earnings per share, etc.

1.6) History of Mutual Fund (Worldwide):

When three Boston securities executives pooled their money together in 1924 to create the first mutual fund, they had no idea how popular mutual funds would become. The idea of pooling money together for investing purposes started in Europe in the mid-1800s. The first pooled fund in the U.S. was created in 1893 for the faculty and staff of Harvard University. On March 21st, 1924 the first official mutual fund was born. It was called the Massachusetts Investors Trust. After one year, the Massachusetts Investors Trust grew from $50,000 in assets in 1924 to $392,000 in assets (with around 200 shareholders). In contrast, there are over 10,000 mutual funds in the U.S. today totaling around $7 trillion (with approximately 83 million individual investors) according to the Investment Company Institute. The stock market crash of 1929 slowed the growth of mutual funds. In response to the stock market crash, Congress passed the Securities Act of 1933 and the Securities Exchange Act of 1934. These laws require that a

fund be registered with the SEC and provide prospective investors with a prospectus. The SEC helped create the Investment Company Act of 1940, which provides the guidelines that all funds must comply with today. With renewed confidence in the stock market, mutual funds began to blossom. By the end of the 1960s there were around 270 funds with $48 billion in assets. In 1976, John C. Bogle opened the first retail index fund called the First Index Investment Trust. It is now called the Vanguard 500 Index fund. In November of 2000 it became the largest mutual fund ever with $100 billion in assets.

1.7) Indian Mutual Industry-An Insight

The concept of mutual funds in India dates back to the year 1963. The era between 1963 and 1987 marked the existence of only one mutual fund company in India with Rs. 67bn assets under management (AUM), by the end of its monopoly era, the Unit Trust of India (UTI). By the end of the 80s decade, few other mutual fund companies in India took their position in mutual fund market. The new entries of mutual fund companies in India were SBI Mutual Fund, Canbank Mutual Fund, Punjab National Bank Mutual Fund, Indian Bank Mutual Fund, Bank of India Mutual Fund. The succeeding decade showed a new horizon in Indian mutual fund industry. By the end of 1993, the total AUM of the industry was Rs. 470.04bn. The private sector funds started penetrating the fund families. In the same year the first Mutual Fund Regulations came into existence with re-registering all mutual funds except UTI. The regulations were further given a revised shape in 1996. Kothari Pioneer was the first private sector mutual fund company in India which has now merged with Franklin Templeton. Just after ten years with private sector players penetration, the total assets rose up to Rs. 1218.05 bn. Today there are 37 mutual fund companies in India.

1.8) History Of Indian Mutual Fund Industry

The history of Mutual Funds in India can be broadly divided into 5 Phases:

Phase I. 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 de-linked in 1978 and the entire control was transferred 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 between 1981 and 1984, Childrens Gift Growth Fund and India Fund (India's first offshore fund) in 1986, Master 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 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.
1992-93 UTI Public Sector Total Amount Mobilized (In Rs. crores) 11,057 1,964 13,021 Assets Under Management (In Rs. crores) 38,247 8,757 47,004 Mobilization as % of Gross Domestic Savings 5.2% 0.9% 6.1%

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 investorservicing 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 was a significant growth in mobilizations of funds from investors and assets under management which is supported by the following data: ASSETS UNDER MANAGEMENT (Rs. CRORES) AS ON UTI PUBLIC PRIVATE TOTAL SECTOR SECTOR 31-March- 99 53,320 8,292 6,860 68,472

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 38 funds as at the end of April 2010. This is a continuing phase of growth of the industry through consolidation and entry of new international and private sector players.

1.9) Indian Mutual Fund Industry Today

Thirteen out of 37 fund houses witnesses a growth in average AUM in January, 2010, with Reliance Mutual Fund continuing the largest fund house by asset at Rs. 1.17 trillion. HDFC was at the second spot at Rs. 948 billion, followed by ICICI Prudential Mutual Fund at Rs. 784 billion. UTI Mutual Fund and Birla Sun Life Mutual Fund followed with an average AUM of Rs. 745 billion and Rs. 626 billion, respectively. The share of top 5 MFs in the industrys asset was at 56% while that of top 10 funds asset was close to 80% in January 2010. As per AMFI data, UTI Mutual Fund had the highest number of investor folios at 10 million as of December 2009. The total number of investor folios for the mutual fund industry stood at 48 million as of December 2009. The average AUM data analyzed for equity oriented schemes showed that Reliance Growth Fund held the highest corpus of around Rs. 70 billion, followed by HDFC top 200 fund, Reliance diversified Power Sector fund, HDFC equity fund and SBI magnum Tax Gain Scheme1993 with an average AUM Rs. 61billion, Rs.58 billion, Rs. 55 billion, Rs. 54 billion, respectively.

Average Assets under Management as of September 2010

AAUM Movement
120000 100000 80000 60000 40000 20000 0 AAUM (Rs. Cr)

Reliance HDFC ICICI UTI

LIC IDFC Sundaram Religare

SBI Kotak DSP-BR Tata

Sep-10

Birla Franklin

AMC Aug-10

As per the data released by the Association of Mutual Funds in India (AMFI), the combined average AUM of the 41 fund houses in the country increased to Rs. 715466.98 crores in September, 2010, witnessing a growth of 4.06 per cent compared to Rs. 687559.54 crores in August, 2010. Reliance Mutual Fund AAUM increased for a consecutive month and currently stood at Rs 1, 07,748.54 crores. Out of the 41 mutual funds, 13 mutual funds registered fall in AAUM in September, 2010. All top 10 fund houses registered a gain in the current month. Among the top 5 AMC in terms of total AAUM, ICICI Mutual Fund had the lowest percentage growth of only 1.39 per cent to Rs 69,754.78 crores while UTI Mutual Fund managed to top by growing at 5.36 per cent. The fund houses which have experienced the maximum gain in their AAUM are Pramerica Mutual Fund, Peerless Mutual Fund, Axis Mutual Fund, DSP

Fidelity

Black Rock Mutual Fund and Fortis Mutual Fund, the growth experienced by them were above 10 per cent compared to last month.

1.10) Association of Mutual Funds in India (AMFI)

With the 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 Asset Management Companies (AMC) which has been registered with Securities Exchange Board of India (SEBI). Till date all the AMCs are that have launched 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 healthy market with 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: 1. This Mutual Fund Association of India maintains high professional and ethical standards in all areas of operation of the industry. 2. It also recommends and promotes the top class business practices and code of conduct which is followed by members and related people engaged in the activities of Mutual Fund and Asset Management. The agencies who are by any means connected or involved in the field of capital markets and financial services also involved in this code of conduct of the association 3. AMFI interacts with SEBI and works according to SEBIs guidelines in the Mutual Fund industry. 4. Associations 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. 5. 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. 6. AMFI undertakes all India awareness programme for investors in order to promote proper understanding of the concept and working of Mutual Funds.

7. At last but not the least 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.

The sponsors of Association of Mutual Funds in India

Bank Sponsored 1. SBI Fund Management Ltd. 2. BOB Asset Management Co. Ltd. 3. Canbank Investment Management Services Ltd. 4. UTI Asset Management Company Pvt. Ltd. Institutions 1. GIC Asset Management Co. Ltd. 2. Jeevan Bima Sahayog Asset Management Co. Ltd. Asset Management Company: 1. Benchmark Asset Management Co. Pvt. Ltd. 2. Cholamandalam Asset Management Co. Ltd. 3. Credit Capital Asset Management Co. Ltd. 4. Escorts Asset Management Ltd. 5. JM Financial Mutual Fund 6. Kotak Mahindra Asset Management Co. Ltd. 7. Reliance Capital Asset Management Ltd. 8. Sahara Asset Management Co. Pvt. Ltd 9. Sundaram Asset Management Company Ltd. 10. Tata Asset Management Private Ltd. Predominantly India Joint Ventures: 1. Birla Sun Life Asset Management Co. Ltd. 2. DSP Merrill Lynch Fund Managers Limited 3. HDFC Asset Management Company Ltd. Predominantly Foreign Joint Ventures: 1. ABN AMRO Asset Management (I) Ltd. 2. Alliance Capital Asset Management (India) Pvt. Ltd. 3. Deutsche Asset Management (India) Pvt. Ltd. 4. Fidelity Fund Management Private Limited 5. Franklin Templeton Asset Mgmt. (India) Pvt. Ltd. 6. HSBC Asset Management (India) Private Ltd. 7. ING Investment Management (India) Pvt. Ltd. 8. Morgan Stanley Investment Management Pvt. Ltd. 9. Principal Asset Management Co. Pvt. Ltd. 10. Prudential ICICI Asset Management Co. Ltd. 11. Standard Chartered Asset Mgmt Co. Pvt. Ltd.

1.11) SEBI Regulations for Mutual Funds (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 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 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). 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.

1.12) Future of Mutual Funds in India

At the end of 2006 March, Indian mutual fund industry reached Rs. 2, 57, 499 crores. It is estimated that by 2010 March-end, the total assets of all scheduled commercial banks should be Rs. 40, 90, 000 crores. The annual composite rate of growth is expected 13.4% during the rest of the decade. In the last 5 years we have seen annual growth rate of 9%.

According to the current growth rate, by year 2010, mutual fund assets will be double. Going by the above facts and generally, mutual funds have often been considered a good route to invest and earn returns with reasonable safety. Small and big investors have both invested in instruments that have suited their needs. And so equity and debt funds have attracted investments alike. The performance of the investments, equity in particular, for the last oneyear, has however been disappointing for the investors. The fall in NAVs of equity funds, and it is really steep in some, even to the extent of 60-70 percent, has left investors disgusted. Such backlash was only to be expected when funds, in a hurry to post good returns invested in volatile tech stocks. The move, though good under conducive market conditions, is the point of rebuttal now. Owing to volatility in market and profit warnings by some IT majors, tech stocks have been on the downhill journey and the result is fall in NAVs of most equity funds. This hurts the investor but then investments in equity are never safe. Mutual funds are not just guilty of mismanaging their risks as the recent survey by Price water house Coopers indicates but also not educating their investors enough on the risks facing them. It is for the mutual benefit of the investors as well as mutual funds that investor is educated enough or else an agitated investor might route his investments to other avenues that are considered safe. Debt funds are safe investments and generate returns far in excess of what other so-called safe avenues such as banks generate. Despite this, the inflow of funds in debt funds and banks is by no means comparable. The factor contributing to this the lack of understanding caused by improper guidance by the intermediaries. Till now, Investor education has been one of the issues, less cared for, by the industry. The industry focused upon the amounts and not why a person wanted to invest or whether a particular product suited him or not. While educating the customer might not have been on the cards earlier, the things are beginning to change now. With SEBI passing on the guidelines, the funds will engage in investor education. The guidelines state that funds will utilize the income earned on unclaimed money lying with them for a period exceeding three years to educate the investors. AMFI has started a certification program for intermediaries. This will be made mandatory for the intermediaries and is aimed at educating the investors about the risks attached to the schemes and to inculcate adequate skills into the intermediaries to help the investors choose the right kind of fund. Steps such as these are aimed at obliterating various flaws in the system by standardizing the knowledge base of intermediaries, as they are the interface between the investor and the funds. Although the investors themselves are also guilty of picking funds that were not suited for them, the blame cant lie square on their shoulders alone. The industry has also got to bear some of it. With such programs becoming

mandatory, it can be ensured to some extent that ignorance ceases to be an aspect associated with the industry. Till now, investors have been ignorant about the kind of fund to be picked or how to select a fund. Teaching an investor how to select a fund is thus an important aspect. Educated investors can, on their part, ask pertinent questions to find funds that qualify to be in their portfolio as per their risk bearing capacity. It would not be improper to say that investor education is still the key to managing the funds handed over by investors. The investors are important to the industry and likewise, mutual funds form an important avenue for an investor. It would thus be of critical importance to educate people for an informed investor is in the best position to pick up Schemes as per his need.

1.13) Risk Return Analysis of the Schemes

A rational investor before investing his/her money in stock analysis the risk associated with the particular stock. The actual returns he receives from the stock may vary from the expected one and thus an investor is always caution about the rate of risk associated with particular stock. Hence it becomes very essential on the part of investors to know the risk as the hard earned money is being invested with the view to good return on investment. Risk mainly consists of two components. Systematic risk Unsystematic risk

Systematic risk
The systematic risk affects the entire market. The economic conditional, political situation, sociological change affects the entire market in turn affecting the company and even the stock market. These situations are uncontrollable by corporate and investors.

Unsystematic risk
The Unsystematic risk is unique to industries. It differs from industries to industries. Unsystematic risk stems from managerial inefficiency, technological change in production process, availability of raw materials, change in the customer preference and labour problem. The nature and magnitude of above mentioned factors differ from industry to industry and company to company.

In general view, the risk for any investor would be the probably loss from investing money in any mutual fund. but when look at the technical side of its, we cant just say these schemes/ fund carry risk without any proof. They are certain set formulas to say the percentage risk associated with it. There are certain tools or formulas used to calculate the risk associated with schemes. These tools helps us to understand the associated wit the schemes. These schemes are compared with the benchmark BSE 100.

The Tools used for calculation

Standard deviation Beta Alpha Sharpe ratio Treynor ratio

Arithmetic mean
AM=y/N Where y= returns of NAV values N= number of observation Average returns that can be expected from investment. The Arithmetic returns is appropriate as a measure of a central tendency of a number of returns calculated from particular time i.e. for 5 years.

Returns
Investor wants to maximize expected retunes subject to their tolerance for risk. Returns are the motivating force and principal reward in investment process and it is the key method available to investors in comparing alternative the investments. Measuring the historical returns allows investor to access the how well the stocks have performed. Investor get returns either in form of interest, dividend or capital appreciation. There are two terms, realized term and expected return. Realized return earned in past. RETURN= (Closing price-opening price) /opening price*100

Standard Deviation

The Standard deviation is measure of the variables around its mean or it is square root of the sum of the squared root deviations from the mean divided the number of observation. S.D is used to measure the variability of return i.e. the measure of dispersion. S.D is calculated as the square root of variation. In finance investments volatility, S.D is also known as historical volatility and it is used by investors as a gauge from the amounted of volatility. S.D. = (y-Y) /N Where, y= return of portfolio Y=average return of portfolio N= number of months

Beta
Beta describes the relationship between the securities return and the index returns. Beta = + 1.0 One percent change in market index returns causes exactly one percent change in the security return. It indicates that the security moves in tandem with the market. Beta = + 0.5 One percent change in the market index return causes 0.5 percent change in the security return. The security is less volatile compared to the market. Beta = + 2.0 One percent change in the market index return causes 2 percent change in the security return. The security return is more volatile. When there is a decline of 10% in the market return, the security with beta of 2 would give a negative return of 20%. The security with more than 1 beta value is considered to be risky. Negative Beta Negative beta value indicates that the security return moves in the opposite direction to the market return. A security with a negative beta of -1 would provide a return of 10%, if the market return declines by 10% and vice-versa. Beta= N*XY-(X) (Y) N* (X)-(X) Where N=No of observation X=Total of market index value Y=Total of return to Nav

Alpha
Alpha represents the forecast of residual return, which we consider the future return of any portfolio. Alpha measures the unsystematic risk of a portfolio property because the portfolio property also consists of both residual return and future expectation. It is important to remember that the risk-free portfolio will always show a zero residual return hence, any risk less security like cash will have always alpha equal to zero. A positive alpha of 1.0 means the fund has outperformed its benchmark index by 1% correspondingly; a similar negative alpha would indicate an underperformance of 1%. 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. The Formula is used to calculate:Alpha=Y-beta(x) Where Y= Average return to NAV return X=Average return to market index

Sharpe Ratio
The performance measure developed by William Sharpe is referred to as the Sharpe ratio or the reward to variability ration. It is the ratio of the reward or risk to the variability of return or risk measured by the standard deviation of return the formula for calculating Sharpe ratio may be stated as: Sharpe ratio= Rp-Rf S.D Where, Rp=Realised return on the portfolio. Rf=Risk free rate of return. S.D=standard deviation of portfolio return Sharpe performance index gives a single value to be used for the performance ranking of various fund or portfolio. 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 fund or portfolio. The fund that has performed well compared to other will be rank first than others.

Treynor Ratio
The performance measure by jack. Treynor is referred to as Treynor ratio or reward to volatility ratio. It is the ratio of the reward or risk premium to the volatility of return as measuring by the portfolio beta. The formula for calculating Treynor ratio may be stated as: Treynor ratio= Rp-Rf Beta Where: Rp= realized return on the portfolio Rf= risk free rate of return Beta=portfolio beta.

2.) Literature Review & Problem Statement

2.1) About Reliance Mutual Fund
Reliance Mutual Fund (RMF) has been established as a trust under the Indian Trusts Act, 1882 with Reliance Capital Limited (RCL), as the Settler/Sponsor and Reliance Capital Trustee Co. Limited (RCTCL), as the Trustee. RMF has been registered with the Securities & Exchange Board of India (SEBI) vide registration number MF/022/95/1 dated June 30, 1995. The name of Reliance Capital Mutual Fund has been changed to Reliance Mutual Fund effective 11th. March 2004 vide SEBI's letter no. IMD/PSP/4958/2004 date 11th. March 2004. Reliance Mutual Fund was formed to launch various schemes under which units are issued to the Public with a view to contribute to the capital market and to provide investors the opportunities to make investments in diversified securities. Reliance Mutual Fund (RMF) is one of Indias leading Mutual Funds, with Average Assets Under Management (AAUM) of Rs. 1,07,749 Crores and an investor count of over 72 Lakh folios. (AAUM and investor count as of September 2010) 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 well rounded 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 balance paid up capital being held by minority shareholders." The main objectives of The Trust are: To carry on the activity of a Mutual Fund as may be permitted at law and formulate and devise various collective Schemes of savings and investments for people in India and abroad and also ensure liquidity of investments for the Unit holders; To deploy Funds thus raised so as to help the Unit holders earn reasonable returns on their savings and to take such steps as may be necessary from time to time to realize the effects without any limitation.

2.2) Sponsor Reliance Capital Limited

Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management Limited., a subsidiary of Reliance Capital Limited, which holds 93.37% of the paid-up capital of RCAM, the balance paid up capital being held by minority shareholders. Reliance Mutual Fund (RMF) has been sponsored by Reliance Capital Ltd (RCL). The promoter of RCL is AAA Enterprises Private Limited. Reliance Capital Limited is a Non Banking Finance Company. Reliance Capital Limited is one of the Indias leading and fastest growing financial services companies, and ranks among the top three private sector financial services and banking companies, in terms of net worth Reliance Capital has interests in asset management and mutual funds, life and non-life insurance, private equity and proprietary investments, stock broking and other activities in the financial services sector. The net worth of RCL is Rs. 6086 crore as on March 31, 2008. Given below is a summary of RCLs financials:

Particulars (Rs. in crores) Total Income Profit Before Tax Profit After Tax Reserves & Surplus Net Worth Earnings per Share (Rs.)

200708

2006-07

2005-06

Dividend (%) Paid up Equity Capital

2079.79 1171.45 1025.45 5779.06 5927.50 41.75 (Basic + Diluted) 55% 246.16

883.86 733.18 646.18 4915.07 5161.23 28.39 (Basic + Diluted) 35% 246.16

652.02 550.61 537.61 3849.58 4122.46 29.74 (Basic + Diluted) 30% 223.40

Reliance Capital Ltd. has contributed Rupees One Lac as the initial contribution to the corpus for the setting up of the Mutual Fund. Reliance Capital Ltd. is responsible for discharging its functions and responsibilities towards the Fund in accordance with the Securities and Exchange Board of India (SEBI) Regulations.

The Sponsor is not responsible or liable for any loss resulting from the operation of the Scheme beyond the contribution of an amount of Rupees one Lac made by them towards the initial corpus for setting up the Fund and such other accretions and additions to the corpus.

2.3) The Asset Management Company

Reliance Capital Asset Management Ltd.
Reliance Capital Asset Management Ltd. (RCAM) is an unlisted Public Limited Company incorporated under the Companies Act, 1956 on February 24, 1995. RCAM has been appointed as the Asset Management Company of Reliance Mutual Fund by The Trustee vide Investment Management Agreement (IMA) dated May 12, 1995 and executed between Reliance Capital Trustee Co. Limited and Reliance Capital Asset Management Ltd. and amended on August 12, 1997 and January 20, 2004 in line with SEBI (Mutual Funds) Regulations, 1996). Pursuant to this IMA, RCAM is authorized to act as Investment Manager of the Mutual Fund. The net worth of the Asset Management Company based on audited accounts as on March 31, 2009 is Rs. 841.32 Crore.

Vision Statement:
To be a globally respected wealth creator, with an emphasis on customer care and a culture of good corporate governance.

Mission Statement:
To create and nurture a world-class, high performance environment aimed at delighting their customers.
No. of schemes No. of schemes including options Equity Schemes Debt Schemes Short term debt Schemes Equity & Debt Money Market Gilt Fund 57 185 60 100 15 2 0 6

Corpus under management Rs. 109485.69 crores as on May 31, 2010

2.4) Reliance Mutual Fund Schemes

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

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

c) Sector Specific Schemes

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

Equity/Growth Schemes
a) Reliance Natural Resources Fund:

(An Open Ended Equity Scheme): The primary investment objective of the scheme is to seek to generate capital appreciation & provide long-term growth opportunities by investing in companies principally engaged in the discovery, development, production, or distribution of natural resources and the secondary objective is to generate consistent returns by investing in debt and money market securities.

b) Reliance Equity Fund:

(An open-ended diversified Equity Scheme.): The primary investment objective of the scheme is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio constituted of equity & equity related securities of top 100 companies by market capitalization & of companies which are available in the derivatives segment from time to time and the secondary objective is to generate consistent returns by investing in debt and money market securities.

c) Reliance Tax Saver (ELSS) Fund:

(An Open-ended Equity Linked Savings Scheme): The primary objective of the scheme is to generate long-term capital appreciation from a portfolio that is invested predominantly in equity and equity related instruments.

d) Reliance Equity Opportunities Fund:

(An Open-Ended Diversified Equity Scheme.): The primary investment objective of the scheme is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio constituted of equity securities & equity related securities and the secondary objective is to generate consistent returns by investing in debt and money market securities.

e) Reliance Vision Fund:

(An Open-ended Equity Growth Scheme.): The primary investment objective of the Scheme is to achieve long term growth of capital by investment in equity and equity related securities through a research based investment approach.

d) Reliance Growth Fund:

(An Open-ended Equity Growth Scheme.): The primary investment objective of the Scheme is to achieve long term growth of capital by investment in equity and equity related securities through a research based investment approach.

e) Reliance Quant Plus Fund (Formerly known as Reliance Index Fund):

(An Open Ended Equity Scheme.): The investment objective of the Scheme is to generate capital appreciation through investment in equity and equity related instruments. The Scheme will seek to generate capital appreciation by investing in an active portfolio of stocks selected from S & P CNX Nifty on the basis of a mathematical model.

f) Reliance NRI Equity Fund:

(An open-ended Diversified Equity Scheme.): The Primary investment objective of the scheme is to generate optimal returns by investing in equity or equity related instruments primarily drawn from the Companies in the BSE 200 Index.

g) Reliance Regular Savings Fund:

(An Open-ended Scheme.): Equity Option: The primary investment objective of this option is to seek capital appreciation and/or to generate consistent returns by actively investing in Equity &Equity-related Securities. Balanced Option: The primary investment objective of this option is to generate consistent returns and appreciation of capital by investing in mix of securities comprising of equity, equity related instruments & fixed income instruments.

h) Reliance Long Term Equity Fund:

(A close-ended Diversified Equity Scheme.): The primary investment objective of the scheme is to seek to generate long term capital appreciation & provide long-term growth opportunities by investing in a portfolio constituted of equity & equity related securities and Derivatives and

the secondary objective is to generate consistent returns by investing in debt and money market securities.

i) Reliance Equity Advantage Fund:

(An open-ended Diversified Equity Scheme.): The primary investment objective of the scheme is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio predominantly of equity & equity related instruments with investments generally in S & P CNX Nifty stocks and the secondary objective is to generate consistent returns by investing in debt and money market securities.

Debt/Liquid Schemes
a) Reliance Monthly Income Plan:
(An Open-ended Fund-Monthly Income is not assured & is subject to the availability of distributable surplus): The primary investment objective of the scheme is to generate regular income in order to make regular dividend payments to unit holders and the secondary objective is growth of capital.

b) Reliance Gilt Securities Fund - Short Term Gilt Plan & Long Term Gilt Plan: (Open-ended Government Securities Scheme): The primary objective of the Scheme is to generate optimal credit risk-free returns by investing in a portfolio of securities issued and guaranteed by the central Government and State Government. c) Reliance Income Fund:
(An Open-ended Income Scheme): The primary objective of the scheme is to generate optimal returns consistent with moderate levels of risk. This income may be complemented by capital appreciation of the portfolio. Accordingly, investments shall predominantly be made in Debt & Money market Instruments.

d) Reliance Medium Term Fund:

(An Open End Income Scheme with no assured returns.): The primary investment objective of the Scheme is to generate regular income in

order to make regular dividend payments to unit holders and the secondary objective is growth of capital.

e) Reliance Short Term Fund:

(An Open End Income Scheme): The primary investment objective of the scheme is to generate stable returns for investors with a short investment horizon by investing in Fixed Income Securities of short term maturity.

f) Reliance Liquid Fund:

(Open-ended Liquid Scheme): The primary investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risk and high liquidity. Accordingly, investments shall predominantly be made in Debt and Money Market Instruments.

g) Reliance Floating Rate Fund:

(An Open End Liquid Scheme): The primary objective of the scheme is to generate regular income through investment in a portfolio comprising substantially of Floating Rate Debt Securities (including floating rate securitized debt and Money Market Instruments and Fixed Rate Debt Instruments swapped for floating rate returns). The scheme shall also invest in fixed rate debt Securities (including fixed rate securitized debt, Money Market Instruments and Floating Rate Debt Instruments swapped for fixed returns

h) Reliance NRI Income Fund:

(An Open-ended Income scheme): The primary investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risks. This income may be complimented by capital appreciation of the portfolio. Accordingly, investments shall predominantly be made in debt Instruments.

i) Reliance Liquidity Fund:

(An Open - ended Liquid Scheme): The investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risk and high liquidity. Accordingly, investments shall predominantly be made in Debt and Money Market Instruments.

j) Reliance Interval Fund:

(A Debt Oriented Interval Scheme): The primary investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio.

k) Reliance Liquid Plus Fund:

(An Open-ended Income Scheme.): The investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risk and liquidity by investing in debt securities and money market securities.

l) Reliance Fixed Horizon Fund I:

(A closed ended Scheme): The primary investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio.

m) Reliance Fixed Horizon Fund II:

(A closed ended Scheme.): The primary investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio.

o) Reliance Fixed Horizon Fund III:

(A Close-ended Income Scheme.): The primary investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio.

p) Reliance Fixed Tenor Fund:

(A Close-ended Scheme.): The primary investment objective of the Plan is to seek to generate regular returns and growth of capital by investing in a diversified portfolio.

q) Reliance Fixed Horizon Fund -Plan C:

(A closed ended Scheme.): The primary investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio.

r) Reliance Fixed Horizon Fund - IV:

(A Close-ended Income Scheme.): The primary investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio.

s) Reliance Fixed Horizon Fund - V:

(A Close-ended Income Scheme.): The primary investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio of Central and State Government securities and other fixed income/ debt securities normally maturing in line with the time profile of the scheme with the objective of limiting interest rate volatility.

t) Reliance Fixed Horizon Fund - VI:

(A Close-ended Income Scheme.): The primary investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio of Central and State Government securities and other fixed income/ debt securities normally maturing in line with the time profile of the series with the objective of limiting interest rate volatility.

u) Reliance Fixed Horizon Fund - VII:

(A Close-ended Income Scheme.): The primary investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio of: - Central and State Government securities and other fixed income/ debt securities normally maturing in line with the time profile of the series with the objective of limiting interest rate volatility.

Sector Specific Schemes:

Sector Funds are specialty funds that invest in stocks falling into a certain sector of the economy. Here the portfolio is dispersed or spread across the stocks in that particular sector. This type of scheme is ideal for investors who have already made up their mind to confine risk and return to a particular sector.

a) Reliance Banking Fund:

Reliance Mutual Fund has an Open-Ended Banking Sector Scheme which has the primary investment objective to generate continuous returns by actively investing in equity / equity related or fixed income securities of banks.

b) Reliance Diversified Power Sector Fund:

Reliance Diversified Power Sector Scheme is an Open-ended Power Sector Scheme. The primary investment objective of the Scheme is to seek to generate consistent returns by actively investing in equity / equity related or fixed income securities of Power and other associated companies.

c) Reliance Pharma Fund:

Reliance Pharma Fund is an Open-ended Pharma Sector Scheme. The primary investment objective of the Scheme is to generate consistent returns by investing in equity / equity related or fixed income securities of Pharma and other associated companies.

d) Reliance Media & Entertainment Fund:

Reliance Media & Entertainment Fund is an Open-ended Media & Entertainment sector scheme. The primary investment objective of the Scheme is to generate consistent returns by investing in equity / equity related or fixed income securities of media & entertainment and other associated companies

Exchange Traded Fund

Reliance Gold Exchange Traded Fund:
(An open-ended Gold Exchange Traded Fund): The investment objective is to seek to provide returns that closely correspond to returns

provided by price of gold through investment in physical Gold (and Gold related securities as permitted by Regulators from time to time). However, the performance of the scheme may differ from that of the domestic prices of Gold due to expenses and or other related factors.

Problem Statement:
The stocks have risk, which comprises of either unique risk also called as diversifiable risk or unsystematic risk and market risk also called as non-diversifiable risk Or systematic. There are few problems, which reveal the necessity to analyze the risk and return of the Mutual Funds. We can neither predict the risk involved nor the future performance of the stock. Many Mutual Fund schemes have not performed well due to which investor have incurred losses. The movement of BSE-100 index depends on the performance of the companys stock. If a particular industry is not in a booming stage, then the stock of companies related to that industry would be affected. Given the background of risk and uncertainty about investment in mutual fund, present study tries to find out risk return on Reliance mutual fund in comparison with BSE-100 index has been under taken.

3.) Objectives & Research Methodology Objectives

The Objectives of the Study Are: To study Mutual Fund Industry in India. To study the different Schemes provided by Reliance Mutual Fund. To study the performance of different schemes of the Company. To study the Risk involved in different Schemes. To study the Monthly Returns with respect to their Benchmark.

Research Methodology
Method of Research Design To Be Used Under Study Is:
Descriptive Research
In this research an attempt has been made to analyze the past performance of the Reliance Mutual schemes and to know the benefits to the investors. The study is to be done on different schemes provided by the company to know the companys performance for the past few months and to know the risk and returns of the funds.

Methodology of Data Collection: Data Collected

Five Years monthly Navs of different schemes Five Years monthly index of BSE-100 & S&P CNX NIFTY

Sources of Data: Secondary Source of Data

The source of data were only the secondary source as the comparison of the schemes were done keeping BSE SENSEX as the base and thus the project did not require any first hand information in the form of primary source. The data were collected through, the sources like the www.Reliancemutual.com for getting the NAVs of past five years, announcement of publishing of company and other sites used in the project were www.mutualfundsindia.com, www.bseindia.com and other internet sites, fact sheets of various mutual funds.

Tools & Techniques Used For The Study

Beta Standard deviation Alpha Sharpe Ratio Treynor Ratio

Conceptual Design:
Sample unit: Schemes of Reliance Mutual Fund. Sample size: Five years monthly Navs

4.) Analysis & Interpretation Of Data

1) Reliance Growth Fund
Benchmark-100
Return Date Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 TOTAL Of Portfolio NAV 34.95 35.5 27.99 29.83 25.59 25.88 28.31 31.23 32.93 30.48 33.52 35.41 Rp(y) 1.5737 21.155 6.5738 14.214 1.1333 9.3895 10.314 5.4435 -7.44 9.9738 5.6384 7.231 (y-Y) 0.36844 -22.36 5.36584 -15.419 -0.072 8.18426 9.10914 4.23825 -8.6453 8.76852 4.43319 (y-Y) 0.136 500 28.82 237.7 0.005 66.98 82.98 17.96 74.74 76.89 19.65 1106 Market Return Index 2946.14 2923.99 2966.31 3025.14 2658.23 2561.16 2755.22 2789.07 2997.07 3027.96 3339.75 3580.34 TOTAL Rm(x) -0.7518 1.44734 1.98327 -12.129 -3.6517 7.57704 1.22858 7.45768 1.03067 10.297 7.20383 21.693 (x*X) 05653 2.0948 3.9334 147.11 13.335 57.411 1.5094 55.617 1.0623 106.03 51.895 x*y 1.1831 30.318 13.038 172.4 4.1383 71.144 12.672 40.596 7.6682 102.7 40.618 440.5

Y=y/1 2

4 1.205 2

X=x/1 2

6 1.9721

4000 3500 3000 2500 2000 1500 1000 500 0 1 2 3 4 5 6 7 8 9 10 11 12

40 35 30 25 20 15 10 5 0 Index NAV

Analysis:
The above graph shows the movement of NAV of reliance growth fund and Benchmark index for the period from Jan 2006 to Dec 2006. From the above graph we can see there is some correlation between the movements of both.

Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 TOTAL Y=y/ 12

35.55 37.91 32.61 33.66 36.16 36.75 41.13 45.72 47.57 42.94 47.74 48.57

-0.1694 7.2419 -13.98 3.2199 7.4272 1.6316 11.918 11.16 4.0464 -9.733 11.178 1.7386 35.679 2.9733

-3.1427 4.26861 -16.954 0.24661 4.45396 -1.3416 8.94511 8.18648 1.07311 -12.706 8.20513 -1.2347

9.877 18.22 287.4 0.061 19.84 1.8 80.01 67.02 1.152 161.4 67.32 1.524 715. 7

3521.71 3611.9 3481.86 3313.45 3601.73 3800.24 4072.15 4184.83 4566.63 4159.59 4649.87 4953.28 TOTAL X=x/1 2

-1.6376 2.56097 -3.6003 -4.8368 8.7003 5.51152 7.15507 2.76709 9.12343 -8.9134 11.7867 6.52513 35.142 2 2.9285 2

2.6816 6.5586 12.962 23.394 75.695 30.377 51.195 7.6568 83.237 79.448 138.93 42.577 554.7 1

0.2775 18.546 50.334 15.574 64.619 8.9928 85.277 30.88 36.917 86.754 131.76 11.344 509.8 5

6000 5000 4000 3000 2000 1000 0 1 2 3 4 5 6 7 8 9 10 11 12

60 50 40 30 20 10 0 Index NAV

Analysis:
The above graph shows the movement of NAV of reliance growth fund and Benchmark index for the period from Jan 2007 to Dec 2007. From the above graph we can see there is some correlation between the movement of both.

Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 TOTAL Y=y/ 12

52.1 52.82 51.42 55.34 49.36 44.66 43.34 48.34 52.55 53.08 55.1 57.01

7.2679 1.382 -2.6505 7.6235 -10.806 -9.5219 -2.9557 11.537 8.7091 1.0086 3.8056 3.4664 18.866 1.5721

5.69572 -0.1902 -4.2227 6.05135 -12.378 -11.094 -4.5278 9.96454 7.137 -0.5636 2.23343 1.89428

32.44 5224.97 0.036 5422.67 17.83 5904.17 36.62 153.2 123.1 20.5 99.29 50.94 0.318 4.988 3.588 542. 8 6251.39 5385.21 5382.11 5422.39 5933.77 6328.33 6603.6 6931.05 6982.58 TOTAL X=x/1 2

5.48505 3.78375 8.87939 5.88093 -13.856 -0.0576 0.74841 9.4309 6.6494 4.3498 4.95866 0.74347 36.996 4 3.0830 3

30.086 14.317 78.844 34.585 191.98 0.0033 0.5601 88.942 44.214 18.921 24.588 0.5527 527.6

39.865 5.229 23.535 44.833 149.72 0.5481 -2.212 108.8 57.911 4.3871 18.871 2.5772 407

8000 7000 6000 5000 4000 3000 2000 1000 0 1 2 3 4 5 6 7 8 9 10 11 12

60 50 40 30 20 10 0 Index NAV

Analysis:
The above graph shows the movement of NAV of reliance growth fund and Benchmark index for the period from Jan 2008 to Dec 2008. From the above graph we can see there is some correlation between the movement of both Jan-09 59.12 3.7011 0.30373 0.092 7145.91 2.33911 5.4714 8.6573 Feb-09 55.73 -5.7341 -9.1315 83.38 6527.12 -8.6594 74.984 49.654 Mar-09 47.86 -14.122 -17.519 306.9 6587.21 0.92062 0.8475 13.001

Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 TOTAL Y=y/ 12
12000 10000 8000 6000 4000 2000 0

50.8 54.29 56.7 59.77 53.86 60.06 69.89 72.38 81.43

6.1429 6.8701 4.4391 5.4145 -9.8879 11.511 16.367 3.5627 12.503 40.769 3.3974

2.74554 3.4727 1.04175 2.01709 -13.285 8.11395 12.9696 0.16537 9.10608

7.538 12.06 1.085 4.069 176.5 65.84 168.2

7032.93 7468.7 7605.37 8004.05 7857.61 8967.41 10391.1 9 0.027 10384.4 82.92 11154.2 8 908. TOTAL 6 X=x/1 2

6.76645 6.19614 1.8299 5.24209 -1.8296 14.1239 15.8773 -0.0653 7.41381 50.155 4.1795 8

45.785 38.392 3.3485 27.479 3.3473 199.48 252.09 0.0043 54.965 706.2

41.566 42.568 8.1232 28.383 18.091 162.58 259.86 0.2328 92.698 698.9 5

90 80 70 60 50 40 30 20 10 0 1 2 3 4 5 6 7 8 9 10 11 12 Index NAV

Analysis:
The above graph shows the movement of NAV of reliance growth fund and Benchmark index for the period from Jan 2009 to Dec 2009. From the above graph we can see there is some correlation between the movement of both. Jan-10 Feb-10 Mar-10 Apr-10 May-10 67.48 65.61 65.61 56.16 53.7 -17.1313 -2.77119 0 -14.4033 -4.38034 -10.291 4.06905 6.84025 -7.563 2.4599 105.9 16.56 46.79 57.2 9440.94 9404.98 8232.82 9199.46 -15.36 -0.3809 -12.463 11.7413 -5.6111 235.94 0.1451 155.33 137.86 31.484 263.14 1.0555 0 169.11 24.578

6.051 8683.27

Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 TOTAL Y=y/ 12

10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0

45.81 48.203 6 48.417 8 42.675 5 33.142 9

-14.6927 5.22506 0.44437 -11.8599 -22.3374 82.0829 6.84025

-7.8525 12.0653 7.28461 -5.0196 -15.497

61.66 7029.27 145.6 7488.48 53.07 7621.4 25.2 6621.57

-19.048 6.53283 1.77499 -13.119 -25.184 -69.829 10.500 4

362.83 42.678 3.1506 172.1 634.24 1897. 7

279.87 34.134 0.7887 155.59 562.55 1276. 6

240.2 4953.98 976. 5 TOTAL X=x/1 2

80 70 60 50 40 30 20 10 0 1 2 3 4 5 6 7 8 9 10 Index NAV

Analysis:
The above graph shows the movement of NAV of reliance growth fund and Benchmark index for the period from Jan 2010 to Oct 2010. From the above graph we can see there is some correlation between the movement of both.

1) Standard Deviation
S.D. = (y-Y) N

STANDARD DEVIATION
YEAR 2006 (y-Y) 1102.589 (y-Y) /N 91.88242 Square (S.D) 9.5855 root

2007 2008 2009 2010

715.7085 542.8451 908.6373 76.5005

59.64238 45.23709 75.71978 81.37504

7.7228 6.7258 8.7017 9.0208

2) Beta
= N*XY-(X) (Y) N* (X)-(X) N* XY 5286.72 6118.165 4883.992 8387.444 15318.71 (X) 21.69324 35.14223 36.99639 50.15499 -69.8287 ( Y) 7.231404 35.67909 18.86572 40.76851 -82.0829

BETA

YEAR 2006 2007 2008 2009 2010

Nx 5286.692 6656.522 6331.154 8474.359 22772.07

(X) 470.5966 1234.977 1368.733 2515.523 4876.05

0.9878 0.8972 0.8435 1.0644 0.5357

3) Alpha
=Y-(X)

ALPHA
YEAR 2006 2007 2008 2009 2010 Y 1.205234 2.973257 1.572144 3.397376 -6.84025 X 1.972113 2.928519 3.083033 4.179583 -5.81906 0.9878 0.8972 0.8435 1.0644 0.5357

=Y-(X) -0.742819 0.34579 -1.02839 -`1.0513 -3.7229

4) Sharpe Ratio
SR=Rp-Rf/SD Where; Rp= (Closing Nav-opening Nav)/ opening Nav *100

SHARPE RATIO

YEAR 2006 2007 2008 2009 2010

Rp 1.316166 37.39745 9.424184 37.73681 -51.2836

Rf 5 5.1 5.7 7 7.5

SD 9.5855 7.7228 6.7258 8.7017 9.0208

SR -0.38431 4.182091 0.553716 3.532276 -6.51645

5) Treynor Ratio
TR=Rp-Rf/

TREYNOR RATIO
YEAR 2006 2007 2008 2009 2010 Rp 1.316166 37.39745 9.424184 37.73691 -51.2836 Rf 5 5.1 5.7 7 7.5

0.9878 0.8972 0.8435 1.0644 0.5357

TR -3.72933 35.9905 4.415156 28.87712 -109.732

INTERPRETATION
In the year 2006 standard deviation was high at the rate of 9.5855 and in the year 2008 standard deviation was low at the rate of 6.7258. In the year 2009 is 1.0644 which is high risk because greater than 1. In the year 2010 value is 0.5357; it is less risky because it is less than 1. In the year 2007 Sharpe index was higher at the rate of 4.182091 and in the year 2010 Sharpe index was less at the rate of -6.51645. In the year 2007 Treynor index was higher at the rate of 35.9905 and in the year 2010 treynor index was less at the rate of -109.732 .

2) Reliance Vision Fund

Return Date Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 TOTAL Y=y/1 2 Of Portfoli o NAV Rp(Y) 63.69 65.39 63.11 65.34 54.44 56.26 60.9 63.94 68.7 68.89 74.76 82.08 2.6692 3.4868 3.5335 16.682 3.3431 8.2474 4.9918 7.4445 0.2766 8.5208 9.7913 28.64 9 2.604 5 Market Return (y-Y) 0.0647 6.0913 0.929 19.286 0.7386 5.6429 2.3873 4.84 2.3279 5.9163 7.1868 (y-Y) 0.00418 37.1036 0.86307 371.968 0.54557 31.8426 5.69915 23.4254 5.41928 35.003 51.650 6 563.52 4 Index 2946.14 2923.99 2966.31 3025.14 2658.23 2561.16 2755.22 2789.07 2997.07 3027.96 3339.75 3580.34 TOTAL X=x/1 2 Rm(x) -0.7518 1.44734 1.98327 -12.129 -3.6517 7.57704 1.22858 7.45768 1.03067 10.297 7.20383 21.693 2 1.9721 1 (x*X) 0.5653 2.0948 3.9334 147.11 13.335 57.411 1.5094 55.617 1.0623 106.03 51.895 440.56 x*y -2.0068 -5.0465 7.00792 202.331 -12.208 62.491 6.1328 55.5186 0.28505 87.7393 70.5351 472.779

4000 3500 3000 2500 2000 1500 1000 500 0 1 2 3 4 5 6 7 8 9 10 11 12

90 80 70 60 50 40 30 20 10 0 Index NAV

Analysis:
The above graph shows the movement of NAV of reliance vision fund and Benchmark index for the period from Jan 2006 to Dec 2006. From the above graph we can see there is some correlation between the movement of both.

Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07

83.14 88.96 86.7 86.1 91.64 91.49

1.2914 7.0002 2.5405 -0.692 6.4344 -

2.4937 3.2151 6.3256 4.4772 2.6493 -

6.21847 10.3371 40.0129 20.0449 7.01863 15.593

3521.71 3611.9 3481.86 3313.45 3601.73 3800.24

-1.6376 2.56097 -3.6003 -4.8368 8.7003 5.51152

2.6816 6.5586 12.962 23.394 75.695 30.377

-2.1148 17.9274 9.1465 3.34725 55.981 -0.9021

Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 TOTAL Y=y/1 2

99.74 104.82 114.32 105.35 118.05 125.97

0.1637 9.0174 5.0932 9.0632 7.8464 12.055 6.709 45.42 1 3.785 1

3.9488 5.2323 1.3081 5.278 11.632 8.2699 2.9239

27.3767 1.71121 27.8578 135.292 68.392 8.54927 368.40 4

4072.15 4184.83 4566.63 4159.59 4649.87 4953.28 TOTAL X=x/1 2

7.15507 2.76709 9.12343 -8.9134 11.7867 6.52513 35.142 2 2.9285 2

51.195 7.6568 83.237 79.448 138.93 42.577 1235

64.52 14.0935 82.6871 69.9377 142.09 43.7772 500.49 1

6000 5000 4000 3000 2000 1000 0 1 2 3 4 5 6 7 8 9 10 11 12

140 120 100 80 60 40 20 0 Index NAV

Analysis:
The above graph shows the movement of NAV of reliance vision fund and Benchmark index for the period from Jan 2007 to Dec 2007. From the above graph we can see there is some correlation between the movement of both. Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 134.38 6.6762 139.26 3.6315 155.75 11.841 165.65 6.3563 141.84 -14.374 137.65 -2.954 3.2654 0.2207 8.4304 2.9455 -17.784 -6.3648 10.662 7 0.0487 71.070 8 8.6761 5 316.28 8 40.511 5224.9 7 5422.6 7 5904.1 7 6251.3 9 5385.2 1 5382.1 5.4850 5 3.7837 5 8.8793 9 5.8809 3 13.856 30.08 6 14.31 7 78.84 4 34.58 5 191.9 8 0.003 36.619 3 13.740 7 105.14 2 37.381 2 199.15 9 0.1700

Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 TOTAL Y=y/ 12

138.85 0.8718 150.99 8.7432 160.53 6.3183 171.09 6.5782 174.93 2.2444 183.67 4.9963 40.93 3.4108

-2.539 5.3324 2.9075 3.1674 -1.1664 1.5855

2 6.4466 9 28.434 9 8.4534 9 10.032 4 1.3604 4 2.5137 3 504.4 99

1 5422.3 9 5933.7 7 6328.3 3 6603.6 6931.0 5 6982.5 8 TOTAL X=x/ 12

0.0576 0.7484 1 9.4309 6.6494 4.3498 4.9586 6 0.7434 7 36.99 64 3.083 03

3 0.560 1 88.94 2 44.21 4 18.92 1 24.58 8 0.552 7 1368. 7

5 0.6524 4 82.456 7 42.012 9 28.613 9 11.129 4 3.7145 7 560.7 92

8000 7000 6000 5000 4000 3000 2000 1000 0 1 2 3 4 5 6 7 8 9 10 11 12

200 150 100 50 0 Index NAV

Analysis:
The above graph shows the movement of NAV of reliance vision fund and Benchmark index for the period from Jan 2008 to Dec 2008. From the above graph we can see there is some correlation between the movement of both. Jan-09 Feb-09 Mar-09 Apr-09 184.14 0.2559 171.42 6.9078 169.69 1.0092 183.8 8.3152 3.7235 10.887 4.9886 4.3358 13.864 1 118.53 24.885 8 18.799 7145.9 1 6527.1 2 6587.2 1 7032.9 2.3391 1 8.6594 0.9206 2 6.7664 5.471 4 74.98 4 0.847 5 45.78 0.5985 6 59.817 0.9291 56.264

May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 TOTAL Y=y/ 12
12000 10000 8000 6000 4000 2000 0

200

8.8139

207.32 3.66 219.24 5.7496 214.28 2.2624 235.29 9.8049 267.61 13.736 264.45 1.1808 287.66 8.7767 47.75 2 3.979 4

2 4.8346 23.373 1 0.1019 0.3194 9 1.7702 3.1336 5 38.959 6.2417 5.8256 33.937 3 9.7569 95.196 8 26.627 5.1602 4 4.7974 23.014 6 420.4 23

3 7468.7 7605.3 7 8004.0 5 7857.6 1 8967.4 1 10391. 2 10384. 4 11154. 3 TOTAL X=x/ 12

5 6.1961 4 1.8299 5.2420 9 1.8296 14.123 9 15.877 3 0.0653 7.4138 1 50.15 5 4.179 58

5 38.39 2 3.348 5 27.47 9 3.347 3 199.4 8 252.0 9 0.004 3 54.96 5 706.2

1 54.612 3 6.6974 5 30.139 7 4.1391 6 138.48 4 218.09 4 0.0771 6 65.068 9 633.0 63

350 300 250 200 150 100 50 0 1 2 3 4 5 6 7 8 9 10 11 12 Index NAV

Analysis:
The above graph shows the movement of NAV of reliance vision fund and Benchmark index for the period from Jan 2009 to Dec 2009. From the above graph we can see there is some correlation between the movement of both. Jan-10 246.44 -8.9084 79.360 9440.9 -15.36 235.9 220.10 14.329 3 4 4 5 Feb-10 240.47 2.9985 8.9908 9404.9 0.145 0.9227

Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 TOTAL Y=y/ 12

206.12 221.46 211.84 172.07 184.29 1 186.23 2 167.53 8 133.54 7

2.4225 -8.8635 14.285 7.4423 12.863 1.0771 4.3439 -13.353 18.774 7.1023 12.523 1.0534 6.4744 -4.6171 10.038 -14.868 20.289 65.05 2 5.421

9 78.562 5 165.46 3 1.1601 178.29 3 156.83 2 41.917 4 21.317 5 221.05 3 1120. 02

8 8232.8 2 9199.4 6 8683.2 7 7029.2 7 7488.4 8 7621.4 6621.5 7 4953.9 8 TOTAL X=x/ 12

0.3809 12.463 11.741 3 5.6111 19.048 6.5328 3 1.7749 9 13.119 25.184 69.82 9 5.819 1

1 155.3 3 137.8 6 31.48 4 362.8 3 42.67 8 3.150 6 172.1 634.2 4 1897. 7

1 178.03 1 87.381 9 24.374 357.60 2 46.398 1.8697 6 131.68 6 510.95 8 1646. 62

10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 1 2 3 4 5 6 7 8 9 10

300 250 200 150 100 50 0 Index NAV

Analysis:
The above graph shows the movement of NAV of reliance vision fund and Benchmark index for the period from Jan 2010 to Oct 2010. From the above graph we can see there is some correlation between the movement of both.

1) Standard Deviation
S.D. = (y-Y) N

STANDARD DEVIATION
YEAR 2006 2007 2008 2009 2010 (y-Y) 563.5243 368.4037 504.4993 420.423 1120.02 (y-Y) /N 46.9603 30.7003 42.0416 35.0352 93.335 Square (S.D) 6.8527 5.5407 6.4839 5.9190 9.6610 root

2) Beta
= N*XY-(X) (Y) N* (X)-(X) N* XY 6005.88 6729.50 7596.75 19759.41 (X) 35.14223 36.99639 50.15499 -69.8287 ( Y) 45.42131 40.92972 47.75224 -65.0517

BETA

YEAR 2007 2008 2009 2010

Nx 6656.52 6331.15 8474.35 22772.06

(X) 1234.97 1257.74 2515.52 4876.04

0.8133 1.0279 0.872 0.850

3) Alpha
=Y-(X)

ALPHA
YEAR 2007 Y 3.785109 X 2.928519 0.8133

=Y-(X) 1.4033

2008 2009 2010

3.41081 3.979353 -5.42098

1.0279 0.872 0.850

3.083033 4.179583 -5.81906

0.2417 0.3337 0.4747

4) Sharpe Ratio
SR=Rp-Rf/SD Where; Rp= (Closing Nav/opening Nav-1)

SHARPE RATIO
YEAR 2006 2007 2008 2009 2010 Rp 28.87423 51.51552 36.67957 56.21809 -43.8747 Rf 5 5.1 5.7 7 7.5 SD 6.8527 5.5407 6.4839 5.9190 9.6610 SR 3.483916 8.377194 4.777922 8.315271 -5.31774

5) Treynor Ratio
TR=Rp-Rf/

TREYNOR RATIO
YEAR 2006 2007 2008 2009 2010 Rp 28.87423 51.51552 36.67957 56.21809 -43.8747 Rf 5 5.1 5.7 7 7.5

1.048 0.8133 1.0279 0.872 0.850

TR 22.78075 57.0706 30.1387 56.44276 -60.4408

Interpretation
In the year 2006 standard deviation was high at the rate of 9.6610 and in the year 2008 standard deviation was low at the rate of 5.5407. in the year 2008 is 1.0279 which is high risk because greater than 1.In the year 2005 value is 0.8133 it is less risky because it is less than 1 . In the year 2007 Sharpe index was higher at the rate of 8.377194 and in the year 2010 Sharpe index was lesser at the rate of 5.31774 and in the year 2007 Treynor index was higher at the rate of 57.0706 and Treynor index was lesser at the rate of -60.4408.

3) Reliance Equity Fund

Benchmark- S&P CNX NIFTY
Return Date Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Of Portfoli o NAV 11.77 10.94 11.04 11.67 12.35 12.75 13.33 13.12 14.47 Market Return Rp(y) 7.05183 0.91408 5.70652 5.82691 3.23887 4.54902 1.57539 10.2896 (y-Y) -11.005 -3.0388 1.75367 1.87405 -0.714 0.59617 -5.5282 6.33678 (y-Y) 121.102 9 9.23415 4 3.07535 8 3.51208 1 0.50977 5 0.35541 6 30.5615 40.1548 Index 4899.39 4504.73 4605.89 4934.46 5185.95 5223.82 5483.25 5411.29 6094.11 Rm(x) -8.0553 2.24564 7.13369 5.09661 0.73024 4.96629 -1.3124 12.6184 (x*X) 64.8877 5.0429 50.8896 25.9754 0.53325 24.664 1.72229 159.225 x*y 56.8045 2.05269 40.7086 29.6974 2.36516 22.5917 2.06748 129.839

Oct-09 Nov-09 Dec-09 TOTAL Y=y/1 2

16.35 16.56 17.77

12.9924 1.2844 7.30676 43.481 4 3.9528 5

9.03955 2.6684 3.35391

1 81.7134 7.12061 5 11.2487 2 308.58 88

7163.3 6997.6 7461.48 TOTAL X=x/1 2

17.5446 -2.3132 6.62913 45.283 8 4.1167 1

307.815 5.3508 43.9454 690.05 1

227.947 2.97106 48.4375 559.54

8000 7000 6000 5000 4000 3000 2000 1000 0 1 2 3 4 5 6 7 8 9 10 11 12

20 18 16 14 12 10 8 6 4 2 0

Index NAV

Analysis:
The above graph shows the movement of NAV of reliance equity fund and Benchmark index for the period from Jan 2009 to Dec 2009. From

the above graph we can see there is some correlation between the movement of both.

Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 TOTAL Y=y/ 12

15.4 7 14.6 3 13.2 8 14.1 6 13.4 7 11.7 12.3 2 12.6 3 11.7 4 9.56 7

12.9432 5.42986 9.22761 6.62651 4.87288 13.1403 5.33932 2.45118 7.05167 18.4852 54.0705 4.50588

8.4373 -0.924 4.7217 11.132 4 -0.367 8.6344 9.8451 9 6.9570 5 2.5458 13.979

71.187 8 0.8537 6 22.294 8 123.93 0.1346 9 74.553 5 96.927 8 48.400 6 6.4810 6 195.42 2 755.3 43

6245.4 5 6356.9 2 5762.8 8 6289.0 7 5937.8 1 4929.9 8 5297.4 7 5337.2 8 4807.2 3539.5 7 TOTAL X=x/ 12

16.297 1.7848 2 9.3448 9.1306 8 5.5852 16.973 7.4541 9 0.7514 9 9.9317 26.369 62.31 7 5.193 1

265.60 6 3.1855 8 87.324 9 83.369 3 31.195 288.08 6 55.564 9 0.5647 4 98.637 7 695.34 5 1686.8 6 140.57 1

210.94 -9.69133 86.23 60.5045 27.2162 223.032 39.8003 1.84204 70.0347 487.444 1260.12

7000 6000 5000 4000 3000 2000 1000 0 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10

18 16 14 12 10 8 6 4 2 0 Index NAV

Analysis:
The above graph shows the movement of NAV of reliance equity fund and Benchmark index for the period from Jan 2010 to Oct 2010. From the above graph we can see there is some correlation between the movement of both.

1) Standard Deviation
S.D. = (y-Y) N

STANDARD DEVIATION
YEAR 2009 2010 (y-Y) 308.5888 755.3429 (y-Y) /N 25.7157 62.9445 Square (S.D) 5.0710 7.93380 root

2) Beta
= N*XY-(X) (Y) N* (X)-(X) N* XY (X) ( Y) Nx (X) 6714.48 45.28385 43.48137 8280.6 2050.62 15121.48 -62.3168 -54.0705 20242.28 3883.38

BETA

YEAR 2009 2010

0.7617 0.7183

3) Alpha
=Y-(X)

ALPHA
X 4.116714 -5.19307

YEAR 2009 2010

Y 3.952852 -4.50588

=Y-(X) 0.81715 -0.77569

0.7617 0.7183

4) Sharpe Ratio
SR=Rp-Rf/SD Where; Rp= (Closing Nav/opening Nav-1)

SHARPE RATIO
YEAR 2009 2010 Rp 50.97706 -36.6458 Rf 7 7.5 SD 5.0710 7.93380 SR 8.672265 -5.56427

5) Treynor Ratio
TR=Rp-Rf/

TREYNOR RATIO
YEAR 2009 2010 Rp 50.97706 -36.6458 Rf 7 7.5

0.7617 0.7183

TR 57.7354
-61.4587

Interpretation
In the year 2010 standard deviation was high at the rate of 7.93380 and in the year 2009 standard deviation was low at the rate of 5.0710. in the year 2009 is 0.7617 which is high risk because greater than 1.In the year 2010 value is 0.7183 it is less risky compared to year 2009 . In the year 2009 Sharpe index was higher at the rate of 8.672265 and in the year 2010 Sharpe index was lesser at the rate of 5.56427. In the year 2009 Treynor

index was higher at the rate of 57.7354 and Treynor index was lesser at the rate of -61.4587.

4) Reliance Income Fund

Return Portfolio Date Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 TOTAL Y=y/12 Of NAV 20.2532 20.247 20.5642 20.7212 20.5788 20.3027 20.2417 20.3598 20.4848 20.4253 20.5051 20.7444 Rp(y) -0.03061 1.566652 0.763463 -0.68722 -1.34167 -0.30045 0.583449 0.613955 0.29046 0.390692 1.167027 2.434822 0.221347 (y-Y) -0.25196 1.345304 0.542115 -0.90857 -1.56302 -0.5218 0.362102 0.392608 0.51181 0.169344 0.945679 (y-Y) 0.063484 1.809844 0.293889 0.825493 2.44303 0.272275 0.131118 0.154141 0.261946 0.028678 0.894309 7.178206

Jan-07 Feb-07

12.2833 12.3696

-40.7874 0.70258

-43.6211 -2.13112

1902.8 4.541686

Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 TOTAL Y=y/12

12.4257 21.1542 21.327 21.4811 21.576 21.6339 21.7031 21.7566 21.838 21.8817

0.453531 70.24554 0.816859 0.722558 0.441784 0.268354 0.319868 0.246509 0.374139 0.20011 34.00444 2.833703

-2.38017 67.41184 -2.01684 -2.11114 -2.39192 -2.56535 -2.51383 -2.58719 -2.45956 -2.63359

5.665219 4544.356 4.06766 4.456933 5.721279 6.581018 6.319366 6.693576 6.049454 6.935814 6504.188

Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 TOTAL Y=y/12 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09

21.9243 21.9714 22.0254 22.1279 22.2222 22.2053 22.321 22.5169 22.7517 22.9167 23.1332 23.1843

0.194683 0.21483 0.245774 0.465372 0.426159 -0.07605 0.521047 0.877649 1.042772 0.725221 0.944726 0.220895 5.803077 0.48359 0.156571 -0.44659 0.202449 0.377315 0.609864 0.507419 2.631042 -0.51927 0.863157 2.024608

-0.28891 -0.26876 -0.23782 -0.01822 -0.05743 -0.55964 0.037457 0.394059 0.559183 0.241631 0.461136 -0.2627

0.083467 0.072232 0.056556 0.000332 0.003298 0.313197 0.001403 0.155283 0.312685 0.058385 0.212647 0.069009 1.338493

23.2206 23.1169 23.1637 23.2511 23.3929 23.5116 24.1302 24.0049 24.2121 24.7023

-0.58936 -1.19252 -0.54349 -0.36862 -0.13607 -0.23852 1.885106 -1.2652 0.117221 1.278672

0.34735 1.422109 0.135882 0.018516 0.018516 0.05689 3.553624 1.600736 0.013741 1.635002

Nov-09 Dec-09 TOTAL Y=y/12

24.8961 25.3343

0.784542 1.760115 8.951229 0.745936

0.0386 1.014179

0.00149 1.02856 10.10928

Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 TOTAL Y=y/12

25.9301 25.8515 25.5116 25.5555 25.596 23.5116 25.3348 25.6685 25.7618 26.1378

2.351752 -0.30312 -1.31482 0.172079 0.158479 -8.14346 7.75447 1.317161 3.258499 14.03953 21.11358 1.759465

0.592287 -2.06259 -3.07428 -1.58739 -1.60099 -9.90292 5.995005 -0.4423 1.499034 12.28007

0.350804 4.254267 9.451211 2.519795 2.563157 98.06792 35.94009 0.195633 2.247104 150.8001 308.4288

Standard Deviation
S.D. = (y-Y) N

STANDARD DEVIATION
YEAR 2006 2007 2008 2009 2010 (y-Y) 7.178206 6504.188 1.338493 10.10928 308.4288 (y-Y) /N 0.59818 542.015 0.1115 0.8419 25.7024 Square (S.D) 0.77342 23.2812 0.3339 0.9175 5.0697 root

Interpretation
In the year 2006 standard deviation was high at the rate of 23.2812 and in the year 2008 standard deviation was low at the rate of 0.3339.

5) Reliance Liquid Fund

Return Portfolio Date Jan-06 Feb-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 TOTAL Y=y/12 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Of NAV 11.1677 11.202 11.3348 11.3711 11.4086 11.4462 11.4878 11.537 11.584 Rp(y) 0.307136 0.303526 0.320253 0.329783 0.329576 0.363439 0.42828 0.407385 3.666125 0.333284 0.359979 0.332023 0.379791 0.348462 0.40002 0.367061 0.372476 0.338276 0.328749 0.379497 0.460503 (y-Y) -0.02615 -0.02976 -0.01303 -0.0035 -0.00371 0.030155 0.094996 0.074101 (y-Y) 0.000684 0.000886 0.00017 1.23E-07 1.38E-07 0.000909 0.009024 0.005491 0.022968 0.000332 0.002133 2.51E-08 0.000885 0.000476 0.000124 3.29E-07 0.001595 0.002446 1.66E-08 0.006773

11.6257 11.6643 11.7086 11.7494 11.7964 11.8397 11.8838 11.924 11.9632 12.0086 12.0639

-0.01823 -0.04618 0.001584 -0.02975 0.021813 -0.01115 -0.00573 -0.03993 -0.04946 0.001289 0.082296

Dec-07 TOTAL Y=y/12 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 TOTAL Y=y/12 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 TOTAL Y=y/12 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10

12.1208

0.471655 4.538493 0.378208 0.539568 0.466101 0.509679 0.412014 0.409514 0.421546 0.438237 0.497858 0.486645 -100 #DIV/0! #VALUE! -95.8188 -9.58188 #DIV/0! 0.508678 0.722235 0.833893 0.478628 0.125117 0.063233 0.426553 0.458451 0.415346 0.525018 0.537789 5.094942 0.463177 0.419554 0.472678 0.524346 0.412942 0.474734 0.54717 0.587042 0.648936 0.773843 0.838601

0.093447

0.008732 0.023533 102.4438 100.962 101.8396 99.87799 99.82803 100.0686 100.4028 101.6012 101.3753

12.1862 12.243 12.3054 12.3561 12.4067 12.459 12.5136 12.5759 12.6371 0 0 -

10.12145 10.04798 10.09156 9.993898 9.991398 10.00343 10.02012 10.07974 10.06853

908.3993

12.9355 13.0013 13.0952 13.2044 13.2676 13.2842 13.2926 13.3493 13.4105 13.4662 13.5369 13.6097 13.6668 13.7314 13.8034 13.8604 13.9262 14.0024 14.0846 14.176 14.2857 14.4055

0.045501 0.259059 0.370717 0.015452 -0.33806 -0.39994 -0.03662 -0.00473 -0.04783 0.061842 0.074613 -0.13968 0.08656 --0.03489 -0.14629 -0.0845 -0.01206 0.027809 0.089702 0.21461 0.279367

0.00207 0.067112 0.137431 0.000239 0.114284 0.159955 0.001341 2.23E-07 0.002288 0.003824 0.005567 0.494134 0.01951 0.007492 0.001217 0.021401 0.00714 0.000146 0.000773 0.008047 0.046057 0.078046

TOTAL Y=y/12

6.710801 0.559233

0.197461

Standard Deviation
S.D. = (y-Y) N

STANDARD DEVIATION
YEAR 2006 2007 2008 2009 2010 (y-Y) 0.022968 0.023533 908.3993 0.494134 0.541306 (y-Y) /N 1.914 1.961 75.69 0.0411 0.0451 Square (S.D) 1.1761 1.4003 8.7005 0.2029 0.212 root

Interpretation
In the year 2008 standard deviation was high at the rate of 8.7005 and in the year 2010 standard deviation was low at the rate of 0.212.

6) Reliance Gilt Securities Fund

Return Portfolio Date Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 TOTAL Y=y/12 Of NAV 10.9298 10.6578 10.81 10.9379 10.9925 11.0035 11.2346 Rp(y) #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! 1.428062 1.183164 0.499182 0.100068 2.100241 5.310717 1.062143 (y-Y) #VALUE! (y-Y)

0.365919 0.12102 -0.56296 -0.96208 1.038098

0.133897 0.014646 0.316926 0.925588 1.077646 2.468703

Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 TOTAL Y=y/12

11.2682 11.3737 11.4206 11.4524 11.5772 11.6694 11.7971 11.8247 11.8582 11.8923 11.9611 12.0133

0.299076 0.936263 0.412355 0.278444 1.089728 0.796393 1.094315 0.233956 0.283305 0.287565 0.578526 0.436415 6.72634 0.560528

-0.26145 0.375735 -0.14817 -0.28208 0.5292 0.235865 0.533787 -0.32657 -0.27722 -0.27296 0.017997 -0.12411

0.068357 0.141177 0.021955 0.079571 0.280052 0.055632 0.284928 0.10665 0.076853 0.074509 0.000324 0.015404 1.205413

Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08

11.9936 11.9964 12.0146 12.0851 12.096 11.9516 12.0094 12.2235 12.4444

-0.16398 0.023346 0.151712 0.586786 0.090194 -1.19378 0.483617 1.78277 1.807175

-0.66541 -0.47808 -0.34972 0.085356 -0.41124 -1.69521 -0.01781 1.28134 1.305745

0.442777 0.228564 0.122302 0.007286 0.169115 2.873747 0.000317 1.641833 1.70497

Oct-08 Nov-08 Dec-08 TOTAL Y=y/12 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 TOTAL Y=y/12

12.5512 12.7511 12.7509

0.858217 1.592676 -0.00157 6.017157 0.50143

0.356788 1.091247 -0.503

0.127297 1.190819 0.253007 8.762035

12.7163 12.7042 12.7487 12.7655 12.8997 12.9131 13.1887 13.2008 13.2516 13.4267 13.4644 13.7513

-0.27135 -0.09515 0.350278 0.131778 1.051271 0.103878 2.134267 0.091745 0.384825 1.32135 0.280784 2.130804 7.614474 0.634539

-0.90589 -0.72969 -0.28426 -0.50276 0.416732 -0.53066 1.499727 -0.54279 -0.24971 0.68681 -0.35376 1.496265

0.820642 0.532452 0.080805 0.252769 0.173665 0.281601 2.249182 0.294626 0.062357 0.471709 0.125143 2.238808 7.583758

Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 TOTAL Y=y/12

14.2153 14.1822 13.8361 13.9587 13.9688 13.8601 13.7919

3.374226 -0.23285 -2.44038 0.072356 -0.77816 -0.49206

3.341792 -0.26528 -2.47282 0.039922 -0.8106 -0.52449

11.16758 0.070374 6.114824 0.001594 0.657067 0.275094

0.389217 0.032434

19.01525

Standard Deviation
S.D. = (y-Y) N

STANDARD DEVIATION

YEAR 2006 2007 2008 2009 2010

(y-Y) 2.468703 1.205413 8.762035 7.583758 19.01525

(y-Y) /N 0.2057 0.1004 0.7301 0.6319 1.5846

Square (S.D) 0.4535 0.3169 0.8544 0.7949 1.2588

root

Interpretation
In the year 2010 standard deviation was high at the rate of 1.2588 and in the year 2007 standard deviation was low at the rate of 0.3169.

5.) Findings & Conclusion

1) Standard Deviation:
When we see Reliance growth fund it has high standard deviation in the year 2006 as compared to other 4 years i.e. 2007, 2008, 2009 & 2010. When we see Reliance vision it has high standard deviation in the year 2010 as compared to other four years. In case of Reliance Income Fund has high standard deviation in 2008. When we see Reliance equity fund it has high standard deviation in the year 2010 as compared to another one year i.e. 2009. When we see Reliance liquid fund has high standard deviation in 2008 compared other years.

 When we see Reliance gilt securities fund has high standard deviation in 2010 compared to last year. Here standard deviation is referred to volatility of NAV of the scheme hence the one with high standard deviation means it has high volatility hence the standard deviation is directly related to the returns hence higher the standard deviation higher the returns.

2) Beta:
Beta is referred to how much the portfolio is dependent on the market return so higher the higher the dependent hence high risk i.e. systematic risk. When we see Reliance growth fund in 2009 it has high i.e. if 10% decrease in Rm result in 10% Rp which very dangerous to investors but when we observe in 2010 i.e. 0.5357 which mean 10% decrease in Rm results in 5.3 Rp which is healthy sign i.e. in 2007 the scheme has lowest systematic risk . In 2006 1.048 which has higher value which means the schemes has involved highest risk. In all the 5 years value is less or decrease in Rm is greater than decrease in Rp. So it has less systematic risk as compared to reliance growth fund. When we observe Reliance equity fund the value 0.7677 which is highest in the year 2009 whereas in the other one year 2010 is 0.7183.

3) Alpha:
By observing all the 3 schemes we can see that all schemes over all the 3 years have negative alpha. The reason behind this is due to change in investment plan as in the year 2008.

4) Sharpe Ratio:
Since Sharpe ratio is one of the most popular method of knowing the risk associated with the particular scheme, the higher the ratio better is the performance. In case of Reliance growth fund the Sharpe ratio is high in the year 2007 i.e. 4.182091 compared to other four year 2006 i.e. -0.38431, 2008 i.e. 0.553716,2009 i.e. 3.532276 & 2010 i.e. -6.51645.So we can say that scheme has performed very well in the year 2007 compared to other four years.

 In case of Reliance vision fund the Sharpe ratio is high in the year 2007 8.377194 compared to other 4 years, 2006 i.e. 3.483916, 2008 i.e. 4.777922, 2009 i.e. 8.315271 & 2010 i.e. -5.31774. So we can say the scheme as performed very well in the year 2007 as compared to other four years. In case of Reliance equity fund the Sharpe ratio is high in the year 2009 i.e. 8.672265 compared to other one year 2010 i.e. -61.4587 this is very good sign as compared to all other scheme ,this scheme has recorded higher Sharpe ratio with the value of 8.672265 in 2009.

6) Treynor Ratio:
Now coming to another ratio which is derived as treynors ratio which is different from Sharpe ratio since this ratio observe & consider only systematic risk, which is uncontrollable but whereas Sharpe ratio considers both controllable & uncontrollable risk i.e. systematic as well as unsystematic. In case of Reliance vision fund the treynors ratio is high in the year 2007 i.e. 4.5912 compared to other four years 2006 i.e. -0.2458, 2008 i.e. 3.7252, 2009 i.e. 4.4819 and 2010 i.e. -6.4567.So we can say the scheme performed very well in year 2007 compared to other four years but in 2006 it has lower performance. In case of Reliance growth fund the ratio is high in the year 2007 i.e. 3.25708 compared to other four years 2006 i.e. 1.16950, 2008 i.e. 1.79626, 2009 i.e. 3.12612 and 2010 i.e. 12.9086.So we say the scheme performed very well in year 2007 compared to other four years but in 2010 it has lower performance. In case of Reliance equity fund the ratio is high in the year 2009 i.e. 5.09761 compared to last year 2010 i.e. -6.37737.So we can say the scheme performed very well in year 2009 compared to last year.

Suggestions

 The Mutual Fund companies should utilize this opportunity of soft interest regime followed by the banks and attract the fixed deposit and the savings Bank Account Investors. The Mutual Fund Asset Management companies should educate and give Awareness about the concept of Mutual Funds to the investors. As majority of the investors do not know what a Mutual Fund is. And it should highlight the benefits of mutual fund over other investment and attract more number of customers. The Mutual Fund Asset Management companies come up with more advertisements and promotional measures and it should also target the F I Is and individual investors who invest in the capital markets. Always the fund should state the objective of each fund floated by the Asset Management Company to the investors so that the right investors choose the right fund.

6.) Questionnaire
NAME: - _______________________________________________ ADDRESS: - ____________________________________________ ____________________________________________ CONTACT NO:- (O)__________ (R)__________ (M)____________ 1) Which investment avenues are you aware of? Equity /Mutual fund

Post Office (NSC, KVP, PPF) Fixed Deposits Others If others please specify 2) Do you invest in mutual funds? Yes

No

Debt

Liquid

3) If yes, in which assets class do you want to invest in Mutual Funds? Equity

No

4) Do you invest in Reliance mutual fund? Yes

5) If yes, in which scheme would you invest in RELIANCE MUTUAL FUND? Equity Tax Saver Others

7.) Bibliography
Books: Security Analysis & Portfolio Management by R.P.RUSTAGI Security Analysis & Portfolio Management by D.E. FISHER & R.J. JORDAN

Journals: The Economic Times

 Reliance Money Fact sheet and journals

The Telegraph

Websites: www.reliancemutual.com www.amfiindia.com www.valueresearchonline.com www.moneycontrol.com www.economictimes.com