Comparative Performance Evaluation of Selected Mutual Funds in India

COMPARATIVE PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA
CONTENT
Chapter -1 Introduction Introduction to mutual fund Organization types valuation of securities Chapter-2 Company profile Chapter-3 Research Methodology Significance of the study Review of existing literature Focus of the study Research Design Methods of Data Collection Tool & Techniques Chapter-4 Data Analysis and Interpretation Chapter-5 Findings and Suggestions Chapter-6 Bibliography
PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA
EXECUTIVE SUMMARY Mutual Fund industry today, with about 34 players and more than five hundred schemes, is one of the most preferred investment avenues in India. However, with a plethora of schemes to choose from, the retail investor faces problems in selecting funds. Factors such as investment strategy and management style are qualitative, but the funds record is an important indicator too. Though past performance alone cannot be indicative of future performance, it is, frankly, the only quantitative way to judge how good a fund is at present. Therefore, there is a need to correctly assess the past performance of different mutual funds. Worldwide, good mutual fund companies over are known by their AMCs and this fame is directly linked to their superior stock selection skills. For mutual funds to grow, AMCs must be held accountable for their selection of stocks. In other words, there must be some performance indicator that will reveal the quality of stock selection of various AMCs. Return alone should not be considered as the basis of measurement of the performance of a mutual fund scheme, it should also include the risk taken by the fund manager because different funds will have different levels of risk attached to them. Risk associated with a fund, in a general, can be defined as variability or fluctuations in the returns generated by it. The higher the fluctuations in the returns of a fund during a given period, higher will be the risk associated with it. These fluctuations in the returns generated by a fund are resultant of two guiding forces. First, general market fluctuations, which affect all the securities present in the market, called market risk or systematic risk
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and second, fluctuations due to specific securities present in the portfolio of the fund, called unsystematic risk. The Total Risk of a given fund is sum of these two and is measured in terms of standard deviation of returns of the fund. Systematic risk, on the other hand, is measured in terms of Beta, which represents fluctuations in the NAV of the fund vis--vis market. The more responsive the NAV of a mutual fund is to the changes in the market; higher will be its beta. Beta is calculated by relating the returns on a mutual fund with the returns in the market. While unsystematic risk can be diversified through investments in a number of instruments, systematic risk cannot. By using the risk return relationship, we try to assess the competitive strength of the mutual funds vis--vis one another in a better way. In order to determine the risk-adjusted returns of investment portfolios, several eminent authors have worked since 1960s to develop composite performance indices to evaluate a portfolio by comparing alternative portfolios within a particular risk class
CONCEPT OF MUTUAL FUND 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 appreciation realized is 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 working of a mutual fund:
Showing working of Mutual Fund
ORGANIZATION OF MUTUAL FUND A mutual fund is set up in the form of a trust, which has sponsor, trustees, Asset Management Company (AMC) and custodian. The trust is established by a sponsor or more than one sponsor who is like promoter of a company. The trustees of the mutual fund hold its property for the benefit of the unit holders. Asset Management Company (AMC) approved by SEBI manages the funds by making investments in various types of securities. Custodian, who is registered with SEBI, holds the securities of various schemes of the fund in its custody. The trustees are vested with the general power of superintendence and direction over AMC. They monitor the performance and compliance of SEBI regulations by the mutual fund. SEBI Regulations require that at least two thirds of the directors of trustee company or board of trustees must be independent i.e. they should not be associated with the sponsors. Also, 50% of the directors of AMC must be independent. All mutual funds are required to be registered with SEBI before they launch any scheme. The entities involved in mutual fund are also explained following diagram
1. Net Asset Value (NAV) Net Asset Value (NAV) denotes the performance of a particular scheme of a mutual fund. Mutual funds invest the money collected from the investors in securities markets. In simple words, Net Asset Value is the market value of the securities held by the scheme. Since market value of securities changes every day, NAV of a scheme also varies on day-to-day basis. The NAV per unit is the market value of securities of a scheme divided by the total number of units of the scheme on any particular date. For example: If the market value of securities of a mutual fund scheme is Rs. 200 Lakhs and the mutual fund has issued 10 Lakhs units of Rs. 10 each to the investors, then the NAV per unit of the fund is Rs. 20. NAV is required to be disclosed by the mutual funds on a regular basis - daily or weekly- depending on the type of scheme.
2. Loads or No Load Fund A load fund is one that charges a percentage of NAV of entry or exit. That is, each time one buys or sells units in the fund, a charge will be payable. That is, each time one buys or sells units in the fund, a charge will be payable. This charge is used by the mutual fund for marketing and distribution expenses. Suppose the NAV per unit is Rs. 10. If the entry as well as exit load charged is 1%, then the investors who buy would be required to pay Rs.10.10 and those who offer their units for repurchase to the mutual fund will get only Rs.9.90 per unit. The investors should take the loads into consideration while making investment as these their yields/ returns. However, the investors should also consider the performance track record and service standard of the mutual fund which are more important. Efficient funds may give higher returns in spite of loads. A no- load fund is one that does not charge for entry or exit. It means the investors can enter the fund/scheme at NAV and no additional charges are payable on purchase on purchase or sale of units. 3. Sale or Repurchase/ Redemption Price The price or NAV a unit holder is charged while investing in an openended scheme is called sales price. It may include sales load, if applicable. Repurchase or redemption price is the price or NAV at which an openended scheme purchases or redeems its units from the unit holders. It may include exit load, if applicable
Types of Mutual Funds Schemes in India:Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position, risk tolerance and return expectations etc. thus mutual funds has Variety of flavors, Being a collection of many stocks, an investors can go for picking a mutual fund might be easy. There are over hundreds of mutual funds scheme to choose from. It is easier to think of mutual funds in categories, mentioned below. Overview of existing schemes existed in mutual fund category: -BY STRUTYRE 1. Open - Ended Schemes:An open-end fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value ("NAV") related prices. The key feature of open-end schemes is liquidity. 2. Close - Ended Schemes:These schemes have a pre-specified maturity period. One can invest directly in the scheme at the time of the initial issue. Depending on the structure of the scheme there are two exit options available to an investor after the initial offer period closes. Investors can transact (buy or sell) the units of the scheme on the stock exchanges where they are listed. The market price at the stock exchanges could vary from the net asset value (NAV) of the scheme on account of demand and supply situation, expectations of unitholder and other market factors. Alternatively some close-ended schemes provide an additional option of selling the units directly to the Mutual Fund through periodic repurchase
at the schemes NAV; however one cannot buy units and can only sell units during the liquidity window. SEBI Regulations ensure that at least one of the two exit routes is provided to the investor. 3. Interval Schemes:Interval Schemes are that scheme, which combines the features of open-ended and close-ended schemes. The units may be traded on the stock exchange or may be open for sale or redemption during predetermined intervals at NAV related prices. Overview of existing schemes existed in mutual fund category:BY NATURE 1. Equity fund:These funds invest a maximum part of their corpus into equities holdings. The structure of the fund may vary different for different schemes and the fund managers outlook on different stocks. The Equity Funds are sub-classified depending upon their investment objective, as follows: Diversified Equity Funds Mid-Cap Funds Sector Specific Funds Tax Savings Funds (ELSS)
Equity investments are meant for a longer time horizon, thus Equity funds rank high on the risk-return matrix.
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2. Debt funds:The objective of these Funds is to invest in debt papers. Government authorities, private companies, banks and financial institutions are some of the major issuers of debt papers. By investing in debt instruments, these funds ensure low risk and provide stable income to the investors. Debt funds are further classified as: Gilt Funds:Invest their corpus in securities issued by Government, popularly known as Government of India debt papers. These Funds carry zero Default risk but are associated with Interest Rate risk. These schemes are safer as they invest in papers backed by Government. Income Funds:Invest a major portion into various debt instruments such as bonds, corporate debentures and Government securities.
MIPs:Invests maximum of their total corpus in debt instruments while they take minimum exposure in equities. It gets benefit of both equity and debt market. These scheme ranks slightly high on the risk-return matrix when compared with other debt schemes. Short Term Plans (STPs):Meant for investment horizon for three to six months. These funds primarily invest in short term papers like Certificate of Deposits (CDs)
and Commercial Papers (CPs). Some portion of the corpus is also invested in corporate debentures. Liquid Funds:Also known as Money Market Schemes, These funds provides easy liquidity and preservation of capital. These schemes invest in short-term instruments like Treasury Bills, inter-bank call money market, CPs and CDs. These funds are meant for short-term cash management of corporate houses and are meant for an investment horizon of 1day to 3 months. These schemes rank low on risk-return matrix and are considered to be the safest amongst all categories of mutual funds. 3. Balanced funds:As the name suggest they, are a mix of both equity and debt funds. They invest in both equities and fixed income securities, which are in line with pre-defined investment objective of the scheme. These schemes aim to provide investors with the best of both the worlds. Equity part provides growth and the debt part provides stability in returns. Further the mutual funds can be broadly classified on the basis of investment parameter:Each category of funds is backed by an investment philosophy, which is pre-defined in the objectives of the fund. The investor can align his own investment needs with the funds objective and invest accordingly. By investment objective:Growth Schemes:PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA 15
Growth Schemes are also known as equity schemes. The aim of these schemes is to provide capital appreciation over medium to long term. These schemes normally invest a major part of their fund in equities and are willing to bear short-term decline in value for possible future appreciation. Income Schemes:Income Schemes are also known as debt schemes. The aim of these schemes is to provide regular and steady income to investors. These schemes generally invest in fixed income securities such as bonds and corporate debentures. Capital appreciation in such schemes may be limited. Balanced Schemes:Balanced Schemes aim to provide both growth and income by periodically distributing a part of the income and capital gains they earn. These schemes invest in both shares and fixed income securities, in the proportion indicated in their offer documents (normally 50:50). Money Market Schemes:Money Market Schemes aim to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer, short-term instruments, such as treasury bills, certificates of deposit, commercial paper and inter-bank call money. Other schemes :Tax Saving Schemes:PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA 16
Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from time to time. Under Sec.88 of the Income Tax Act, contributions made to any Equity Linked Savings Scheme (ELSS) are eligible for rebate. Index Schemes:Index schemes attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE 50. The portfolio of these schemes will consist of only those stocks that constitute the index. The percentage of each stock to the total holding will be identical to the stocks index weightage. And hence, the returns from such schemes would be more or less equivalent to those of the Index. 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.
Types of Returns:-
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There are three ways, where the total returns provided by mutual funds can be enjoyed by investors: Income is earned from dividends on stocks and interest on bonds.
A fund pays out nearly all income it receives over the year to fund owners in the form of a distribution. If the fund sells securities that have increased in price, the fund
has a capital gain. Most funds also pass on these gains to investors in a distribution. If fund holdings increase in price but are not sold by the fund
manager, the fund's shares increase in price. You can then sell your mutual fund shares for a profit. Funds will also usually give you a choice either to receive a check for distributions or to reinvest the earnings and get more shares. Pros & cons of investing in mutual funds:For investments in mutual fund, one must keep in mind about the Pros and cons of investments in mutual fund. Advantages of Investing Mutual Funds: 1. Professional Management:The basic advantage of funds is that, they are professional managed, by well qualified professional. Investors purchase funds because they do not have the time or the expertise to manage their own portfolio. A mutual fund is considered to be relatively less expensive way to make and monitor their investments.
2. Diversification: Purchasing units in a mutual fund instead of buying individual stocks or bonds, the investors risk is spread out and minimized up to certain extent. The idea behind diversification is to invest in a large number of assets so that a loss in any particular investment is minimized by gains in others. 3. Economies of Scale :Mutual fund buy and sell large amounts of securities at a time, thus help to reducing transaction costs, and help to bring down the average cost of the unit for their investors. 4. Liquidity:Just like an individual stock, mutual fund also allows investors to liquidate their holdings as and when they want. 5. Simplicity:Investments in mutual fund is considered to be easy, compare to other available instruments in the market, and the minimum investment is small. Most AMC also have automatic purchase plans whereby as little as Rs. 2000, where SIP start with just Rs.50 per month basis. Disadvantages of Investing Mutual Funds:1. Professional Management:PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA 19
Some funds doesnt perform in neither the market, as their management is not dynamic enough to explore the available opportunity in the market, thus many investors debate over whether or not the so-called professionals are any better than mutual fund or investor him self, for picking up stocks. 2. Costs: The biggest source of AMC income, is generally from the entry & exit load which they charge from an investors, at the time of purchase. The mutual fund industries are thus charging extra cost under layers of jargon. 3. Dilution:Because funds have small holdings across different companies, high returns from a few investments often don't make much difference on the overall return. Dilution is also the result of a successful fund getting too big. When money pours into funds that have had strong success, the manager often has trouble finding a good investment for all the new money. 4. Taxes:when making decisions about your money, fund managers don't consider your personal tax situation. For example, when a fund manager sells a security, a capital-gain tax is triggered, which affects how profitable the individual is from the sale. It might have been more advantageous for the individual to defer the capital gains liability.
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VALUATION OF SCHEME PORTFOLIOS The Need to Know Valuation Methods The value of investors holdings of units in a mutual fund is calculated on the basis of Net Asset Value of investments by the fund. Distributors and investors need to understand how mutual funds value the securities held by them in their portfolios, so they can understand how value of the investors holdings in fund schemes is arrived at. This knowledge will help them anticipate the fluctuations in the portfolio values under different market scenarios and recommend or take their decisions accordingly. This will also help them in comparing the performance of different fund schemes by reviewing the valuation methods followed by them. The Regulation of Valuation Practices As the industry regulator, SEBI aims at protecting the investors by ensuring that the valuation practices adopted by the AMCs (Asset Management Company) are a. Based on the principles of fair valuation of portfolios securities. b. Are uniform across the fund types and AMCs to the extent possible. The fair valuation ensures that realistic prices are used to compute the value of portfolio securities and that there is no manipulation of the values of portfolios. Uniform valuation practices ensure that everyone can compare the performance of different schemes and AMCs without
worrying about whether the fund valuation practices may be different from one scheme to another. AMCs therefore adopt uniform portfolio valuation practices to the extent possible. SEBI in turn regulates and a. Prescribes detailed valuation methodologies in its Fund regulations b. Mandates disclosure of valuation methods used for information of investor Basic Valuation Principles: Fair value It means value of security that is realistic and not based on any arbitrary methodology. Fair value may be determined based either on purchase cost, market price or on some accepted principles. Fair value of Traded Securities Mutual funds invest essentially in marketable securities traded either on the stock exchange or on to the money markets. The preference for traded securities is given to ensure liquidity of the investments- ease with which the securities can be sold. The second reason for the preference for traded securities is to ensure that these securities receive fair valuation at market prices that are publicly available. This valuation process is known as mark to market- bringing the value of the securities in the portfolio to reflect their market value. Fair value of Illiquid Securities
While fund managers always strive to include only traded or liquid securities in their portfolios market conditions often result in some securities not being traded in the market. Valuation of such non-traded securities poses a problem of how to determine their fair value. Regulators prescribe methods wherever possible or require the Trustees to determine the right methodology and disclose to the extent possible. Valuation date The date on which the fund calculates the value of its portfolio and the NAV is known as the valuation date. Where funds value their investments on a mark to market basis, the valuation date is the date on which the traded price of a security is available. For non-traded security it means the date that is selected and used for the valuation in accordance with some principles and regulations. Valuation of Equity Securities The valuation principle to be used depends also upon whether a security is traded in the market or not. Traded Securities For traded securities the basis of valuation is mark to market. For this purpose, on the valuation date, once the market price is obtained the fund will multiply its current holdings in number of shares by the applicable market price to get the mark to market value. The market price to be used for valuation is determined as follows: a. An equity security is valued at the last quoted closing price on the stock exchange where it is principally traded.
b. If no trade is reported on principal stock exchange, the last quoted price on any other recognized stock exchange may be used c. If an equity security is not traded on the stock exchange on a particular valuation day, the value at which it was traded on the selected/other stock exchange on the earliest previous day, may be used, provided such date is not more than 30 days prior to the valuation date.
Thinly Traded Security For some securities market prices is not available easily. It becomes difficult in such cases to apply the principle of mark to market. The reason for non-availability of market price is the infrequency or small volume of trading in a security. Such securities are then considered thinly traded and SEBI give some freedom to AMCs to use their own methods of valuation in such cases. SEBI defines thinly traded security as: An equity/convertible debenture/warrant is considered as a thinly traded security if trading value in a month is less than Rs.5 lakhs and the total volume is less than 50000 shares. Then market price or free valuation principle is used as follows: a. In case trading I the security is suspended up to 30 days, then the last traded price is used.
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b. If trading in the scrip is suspended for more than 30 days, then the AMC can decide the valuation norms to be followed and such norms would be documented and recorded. Non-Traded Securities When a security is not traded on any stock exchange for 30 days prior to the valuation date, it becomes a non-traded security. Valuation of Non-traded/Thinly traded securities Both non-traded and thinly traded securities are to be valued in good faith by the AMC on the basis of the valuation principles lay down below:a. Based on the latest available Balance sheet, Net worth per share is calculated. [Net worth per share= (Share capital+ ReservesMiscellaneous expenditure and Debit balance of P&L A/c)/ No. of paid up shares.] b. Then value per share is calculated using the Capitalized Earnings Method. The formula used is (Earnings per share *applicable P/E multiple). For this purpose, average P/E ratio for the industry is to be based upon BSE or NSE data. PER should be followed consistently. The identified PER has to be discounted by 75% and only 25% of the industry average P/E shall be taken as the applicable P/E multiple. Earnings per share of the latest audited annual accounts are considered for this purpose.
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c. The value per share based on the net worth method and capitalized earnings method, calculated as above, is averaged and further discounted by 10% for illiquidity, to arrive at the value per share. d. In case the EPS is negative, EPS value for that year is taken a zero for arriving at capitalized earnings. e. Where the latest balance sheet of the company is not available within nine months from the close of the year, unless the accounting year is changed, the shares of such companies shall be valued at zero. f. In case an individual security accounts for more than 5% of the total assets of the scheme, an independent valuer has to be appointed for the valuation. Example: 1. Assume that we hold an engineering companys share that is not quoted on the market, but we know that the company makes Rs.2 EPS and has a net worth of Rs.8 per paid up share.
2. We can use other traded engineering companies industry average for basing the applicable P/E multiple say Rs.12. 3. With a 75% discount, the P/E multiple applicable to our untraded share is 3 (12*25%). 4. We can use the multiple of 3 to obtain our untraded shares price by multiplying our companys Rs.2 EPS with the applicable PER and get the valuation price of Rs.6.
5. This is further averaged with the companys net worth of 8 to give a value of Rs. 7 per share [(6+8)/2]. 6. Since our share is not liquid we must discount 7 by 10% to give a valuation of Rs. 6.30 per share. Valuation of Debt Securities: Traded SecuritiesA debt security may be traded on a stock exchange (corporate securities) or in the interbank market (government security). If a security is traded on the stock exchange then again publicly available and quoted market prices are used for its valuation. If a debt security (other than govt. security) is not traded on any stock exchange on a particular valuation day, the value at which it was traded on the principal stock exchange on the earliest previous day, may be used, provided such date is not more than 15 days prior to the valuation date. If a debt security (other than govt. security) is purchased by way of private placement, the price at which it was bought may be used for a period of 15 days beginning from the date of purchase.
Thinly Traded SecuritiesThese needs to be identified and then valued especially. A debt security (other than govt. security) is considered as a thinly traded security if on the valuation date there is no individual trade on that security in marketable lots on the principal stock exchange or any other stock exchange.
Valuation of Non-traded/Thinly traded security Valuation norms of such securities depend upon their maturity. Thus, 1. Money Market Securities and Debt Securities up to 182 days to maturityNon-traded debt securities with residual maturity of up to 182 days should be valued on the same basis as money market securities. These securities are valued on the basis of amortization of purchase cost plus accrued interest till the beginning of the purchase plus the difference between the redemption value and the purchase cost that is spread uniformly over the remaining maturity period of the investments. 2. Non- traded, Non-Government, debt instruments over 182 days to maturity- All non-traded debt securities including asset backed paper with maturity of over 182 days are valued in good faith by the AMC I accordance with the detailed valuation principles laid by SEBI. a. All Non-traded Debt Securities are classified into Investment grade and Non-Investment grade securities based on their credit rating. The non-investment grade securities are further classified as Performing and Non Performing assets. b. All Non-Government, investment grade debt securities, classified as non-traded, are valued on yield to maturity (YTM) basis as described later. c. All Non-Government, non-investment grade, performing debt securities are valued at a discount of 25% to the face value.
d. All Non-Government, non-investment grade, non- performing debt securities would be valued based on the provisioning norms. Computation Methodology for Yields used for valuations of Debt Securities: The approach to valuation of non-traded debt security is based on the concept of spreads over the benchmark rate to arrive at the yields for pricing of non-traded security. The process is as followsStep A: A Risk Free Benchmark Yield is calculated, using the government securities as the base as they are traded regularly, free from credit risk and traded across different maturity spectrums every week. All securities with minimum traded value of Rs. 1 crore are grouped by maturities called duration buckets 0.5 to 1 year, 1 to2 year, 2/3 years, 3/4,4/5,5/4,5/6 and over 6 years. Then, volume weighted yields are calculated for each bucket. This is done weekly or whenever the interest rates change. Step B: Expected yield on non-govt. securities is generally higher than the corresponding maturity govt. security to reflect the higher credit risk on non-govt. securities. The differences between the two yields are the spread over the benchmark yield. Spreads are determined using the market prices of non-govt. securities and comparing them with the yields on govt. securities. The spreads are built only for investment grade corporate
paper which is grouped credit rating within each of the 7 duration buckets. Step C: Yields to be used for valuation are further adjusted to reflect the illiquidity risk of a security. The yields have to be marked up/marked down to account for the illiquidity risk, promoter background, finance company risk and the issuer class risk. As illiquidity risk would be higher for non-rated securities, higher expected yield would be used to value non-rated securities as compared to rated securities. For securities rated by external agencies, SEBI permits a discretionary discount up to 2 years and 0.75% for those of higher duration. The AMC has to assign an internal credit rating to non rated securities but with mandatory lower discounts or premiums. Step D: The yields so arrived for all categories of securities are used to price the portfolio. If yields for any category of securities cannot be obtained using any or all of the above steps, then a fund may use the credit spreads from trades on appropriate stock exchange for the relevant rating category over the AAA securities trades. Valuation of securities with Call/Put Option: a. Securities with Call optionAn issuer may call a debt security and repay before maturity. Such securities with call option have to be valued at the lower of two
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values- value obtained by valuing the security to final maturity and that obtained valuing the security to call option date.
b. Securities with Put optionWhere investors have the option to redeem earlier than maturity. Such securities with put option shall be valued at the higher of the values obtained the security to final maturity and valuing the security to the put option date. Valuation and Disclosure of Illiquid Securities:SEBI stipulates thata. Aggregate value of illiquid securities of a scheme, defined as nontraded, thinly traded and unlisted equity shares shall not exceed 15% of the total assets of an open-end scheme and 20% of a closed-end fund. Illiquid assets held in excess of the limits have to be assigned zero value. b. All mutual funds have to disclose s on March 31 and September 30 the scheme-wise total illiquid securities in value and percentage of the net assets while making disclosures of half yearly portfolios to the unit holders. c. Mutual funds are no allowed to transfer illiquid securities internally among their schemes from October 1, 2000. Risk, Return and Performance: Rate of return is computed as: (Income earned/Amount invested)*100.
This number can be annualized by multiplying the result by the factor 12/n, where n is the number of months in the holding period. If the holding period is in days, the above factor will be 365/n, where n is the number of days in the holding period. Change in NAV method of calculating return is applicable to growth funds and funds with no income distribution. Change in NAV method computes return as follows: (NAV at the end of the holding period NAV at the beginning of the holding period)/NAV at the beginning of the period. Return is then multiplied by 100 and annualized) E.g.) Annualizing the Rate of Return If NAV on Jan 1, 2001 was Rs. 12.75 & June 30, 2001 was Rs. 14.35 % age change in NAV = (14.35 12.75)/12.75 x 100 = 12.55% Annualized return = 12.55 x 12/6 = 25.10% Percentage Change in NAV: Assume that change in NAV is the only source of return. Example: NAV of a fund was Rs. 23.45 at the beginning of a year Rs. 27.65 at the end of the year. %age change in NAV = (27.65 23.45)/23.45 *100 = 17.91%
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The total return with re-investment method or the ROI method is superior to all these methods. It considers dividend and assumes that dividend is re-invested at the ex-dividend NAV. Total Return or ROI Method computes return as follows: [(Value of holdings at the end of the period - value of holdings at the beginning of the period)/ value of holdings at the beginning of the period] x 100. Value of holdings at the beginning of the period = number of units at the beginning x begin NAV. Value of holdings end of the period = (number of units held at the beginning + number of units re-invested) x end NAV. Number of units re-invested = dividends/ex dividend NAV. Expense ratio is an indicator of efficiency and very crucial in a bond fund. Income ratio is the ratio of net investment income by net assets. This ratio is important for fund earning regular income, such as bond funds, and not for funds with growth objective, investing for capital appreciation. Portfolio turnover rate refers to the ratio of amount of sales or purchases (whichever is less) to the net assets of the fund. Higher the turnover ratio, greater is the amount of churning of assets done by the fund manager.
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High turnover ratio can also mean higher transaction cost. This ratio is relevant for actively managed equity portfolios. If the turnover of a fund is 200%, on average every investment is held for a period of 6 months. Risk arises when actual returns are different from expected returns. Standard deviation is an important measure of total risk. Beta co-efficient is a measure of market risk. The quality of beta depends on ex-marks. If ex-marks are high beta is more reliable. Ex-marks are an indication of extent of correlation with market index. Index funds have ex-marks of 100%. Comparable passive portfolio is used as benchmark. Usually a market index is used as a benchmark. Compare both risk and return, over the same period for the fund and the benchmark. Risk-adjusted return is the return per unit of risk. Comparisons are usually done With a market index With funds from the same peer group With other similar products in which investors invest their funds
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When comparing fund performance with peer group funds, size and composition of the portfolios should be comparable. Treynor and Sharpe ratios are used for evaluating performance of funds. The quality of beta depends on ex-marks. While fund managers are under pressure to increase their asset base, they are confident of giving reasonable returns in the long term. While that is a comforting thought for retail investors, fund managers agree that it may be difficult to achieve the same levels of outperformance as in the past. While fund managers are under pressure to increase their asset base, they are confident of giving reasonable returns in the long term. However, they warn against high expectations. "Investors should not expect equity funds to give 90-100 per cent returns every year. Broad markets should give a CAGR return in the range of 12-15 per cent over the next two-three years". With opportunities in the broad market tapering out, funds are dependent on the stock-picking abilities of fund managers. "I think it is becoming a stock pickers' market. If we identify good companies which have the opportunity and potential to grow, fund managers will continue to outperform the markets. But fund managers are guarding against taking sectoral bets. Nilesh Shah, chief investment officer of Prudential ICICI Mutual Fund, believes that the days of sector-specific rallies are over. While they are bullish on
sectors like banking, infrastructure-related and consumer-dependent sectors, caution is advised in taking big sectoral bets. So what will drive equity returns this year? "I expect a re-rating of Indian equities to happen soon. In many cases it has already started". Fund managers also expect the mid-cap segment to do well, though they agree that returns may not match that of last year. Jain is of the opinion that mid-caps will continue to see good growth going forward. "Though there are some stocks which have become overheated, the universe of mid-caps is still pretty large, and it is possible to find 30-35 good stocks in the segment for your portfolio," says he. "I would back them to do better than large-cap stocks in the longer term". Overall, fund managers continue to be bullish on equities, though they warn against big return expectations. But rest, assured, if fund managers are to be believed, they will continue to give better returns than other asset classes. "I think at least for the next five-10 years, diversified funds will continue to outperform the markets.
Current situation of mutual fund The mutual fund industry shrugged off the recession blues and added over Rs2.5 lakh crore to its assets under management in fiscal 2009-10 to take its AUM to Rs7.4 lakh crore. The average AUM of the fund houses rose Rs 2.5 lakh crore or 51% in the last fiscal year, from Rs 4.9 lakh crore at the end of 2009-10 fiscal, according ti the data available with the AMFI.
Reliance MF maintained its position as the top fund house with a hefty 36% increase in AMU to Rs 110413 crore at the end of march. The other leading fund houses HDFC MF, ICICI MF and UTI MF-also saw an increase in their average AUM .During the fiscal,HDFC MF rose by 54% to 88779 crore a and UTI MF AUMs stood at Rs 80217 crore at the end of march higher by 65% year on year. Analysts believe the growth in the corpus in 2009-10 fiscal was driven mainly by a huge increase in debt inflows as banks parked money with MFs in the time of slow credit off take. Till February 2010 , the total investment in income or debt schemes of MFs was at Rs 2.61 lakh crore, while equity schemes saw net inflow of Rs 2611 crore.
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Reliance mutual fund: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. Sponsor: Reliance Capital Limited Trustee: Reliance Capital Trustee Co. Limited Investment Manager: Reliance Capital Asset Management Limited Statutory Details:The Sponsor, the Trustee and the Investment Manager are incorporated under the The aim of growth funds is to provide capital appreciation over the medium to long- term. Such schemes normally invest a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their preferences. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the options at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time. Companies Act 1956.
Tata mutual fund

Backed by one of the most trusted and valued brands in India, Tata Mutual Fund has earned the trust of lakhs of investors with its consistent performance and world-class service. Tata Mutual Fund manages around Rs. 21,935.00 crores (average AUM for the month) as on March 31, 2010 worth of assets across its varied offerings. Tata Mutual Fund offers an investment option for everyone, whether you are a businessman or salaried professional, a retired person or housewife, an aggressive investor or a conservative capital builder. The Tata Asset Management philosophy is centered on seeking consistent, long-term results. Tata Asset Management aims at overall excellence, within the framework of transparent and rigorous risk controls. We constantly benchmark our efforts against these performance: Consistency :We strive to deliver consistent results through our value-based investing methodology, keeping alive the credo of the late doyen of the Tata Group, Mr. J.R.D. Tata, that money received from the people should go back to them several times over. Flexibility :Tata Mutual Fund offers investors a broad range of managed investment products in various asset classes and risk parameters, with operational flexibility to suit their varied investment needs. tenets of
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Stability:Our commitment to the highest quality of service and integrity is the foundation upon which we build trust with our clients. Service:We offer a wide range of services to assist investors have a fulfilling and rewarding financial planning experience with us. We have designed our services keeping in mind the needs of our investors, giving them a smooth and hassle-free financial planning process. A Proud Pedigree:Tata Asset Management Ltd is a part of the Tata group, one of India's largest and most respected industrial groups, renowned for its adherence to business ethics. The Group has always believed in returning wealth to the society that it serves. Thus, nearly two-thirds of the equity of Tata Sons, the Group's promoter company, is held by philanthropic trusts, which have created a host of national institutions in the natural sciences, medical care, energy and the arts. The trusts also give substantial annual grants and endowments to deserving individuals and institutions in the areas of education, healthcare and social uplift. By combining ethical values with business acumen, globalization with national interests and core businesses with emerging ones, the Tata Group aims to be the largest and most respected global brand from India. This way, it fulfils its long-standing commitment to improving the quality of life of its stakeholders.
Leadership With Trust:Our purpose at the Tata Group is to improve the quality of life of the communities we serve. We do this by attaining leadership positions in sectors of national economic significance, to which the Group brings a unique set of capabilities. This requires us to grow aggressively in focused areas of business. Our heritage of returning to society what we earn evokes trust among consumers, employees, shareholders and the community. It is an ongoing process, continuously enriched by the formalisation of the high standards of behaviour that we expect from employees and companies. The Tata name is a unique asset, representing leadership with trust. Leveraging this asset to enhance Group synergy and becoming globally competitive is the route to sustained growth and long-term success.
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UTI TRUSTE OF UNIT:Vision To be the most Preferred Mutual Fund. Our mission is to make UTI Mutual Fund: The most trusted brand, admired by all stakeholders The largest and most efficient money manager with global presence The best in class customer service provider The most preferred employer The most innovative and best wealth creator A socially responsible organization known for best corporate governance Genesis January 14, 2003 is when UTI Mutual Fund started to pave its path following the vision of UTI Asset Management Co. Ltd. (UTIAMC), which was appointed by UTI Trustee Co, Pvt. Ltd. for managing the schemes of UTI Mutual Fund and the schemes transferred/migrated from the erstwhile Unit Trust of India. UTI AMC provides professionally managed back office support for all business services of UTI Mutual Fund in accordance with the provisions of the Investment Management Agreement, the Trust Deed, the SEBI (Mutual Funds) Regulations and the objectives of the schemes. State-of-
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the-art systems and communications are in place to ensure a seamless flow across the various activities undertaken by UTI MF. Since February 3, 2004, UTI AMC is also a registered portfolio manager under the SEBI (Portfolio Managers) Regulations, 1993 for undertaking portfolio management services. UTI AMC also acts as the manager and marketer to offshore funds through its 100 % subsidiary, UTI International Limited, registered in Guernsey, Channel Islands. Assets Under Management UTIAMC presently manages a corpus of over Rs. 80,218 Crores* as on 31st March 2010 (source: www.amfiindia.com). UTI Mutual Fund has a track record of managing a variety of schemes catering to the needs of every class of citizens. It has a nationwide network consisting 141 UTI Financial Centres (UFCs) and UTI International offices in London, Dubai and Bahrain. UTIAMC has a well-qualified, professional fund management team, which has been fully empowered to manage funds with greater efficiency and accountability in the sole interest of the unit holders. The fund managers are ably supported by a strong in-house securities research department. To ensure investors interests, a risk management department is also in operation. Reliability UTIMF has consistently reset and upgraded transparency standards. All the branches, UFCs and registrar offices are connected on a robust IT network to ensure cost-effective quick and efficient service. All these
have evolved UTIMF to position as a dynamic, responsive, restructured, efficient and transparent entity, fully compliant with SEBI regulations
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47
Significance of the study:The significance of the study for performance evaluation is logically interpretation of the evaluation of the different fund in the market. Both the private and public sector fund are available with their scheme like equity based scheme, debt fund, tax, saving, gilt and other scheme as per sector wise. But the study mainly concentrate on the fair evaluation of fund so that investor can know the changes in the net assets value and the avenue where are consider to invest for return. It increases the confidence of the investor in the fund as well as the knowledge of the investment activities in the market. Review of existing literature:Mainly number of survey conduct by number of fund holder, number of magazine also comes with the new data and the previous journals of different people are considered to review the data. Number of internet site also provide the old study and about the performance of the value of the fund. To know the present performance of the scheme of the company their facts sheet was gone through. Various newspapers also read to get the secondary data and information. Focus of the study The main focus of the study is on the performance measurement and evaluation of the fund so that a investor can calculate is future oriented return from the market and can know the relation between risk and return of the fund. The main attention on the weekly, monthly, and yearly performance of the fund and their evaluation
48
Limitation of the study 1 The main limitation in the study that the data is taken as secondary 2 The data are uses on the weekly, monthly and annually not daily 3 There is time constraint so that the study was no go deeply as expected 4 Only limited source of information is available like newspaper, internet, magazine, and research paper on the net and only little information about AMC through internet and books 5 Expected return not always based on past performance, so study is not the end of conclusion 6 Limited knowledge to evaluate the value of different company may be reliable for other study and benefits. 7 Some scheme are not comparable because are different then other companies scheme 8 Some scheme are new and not past record for study. Method of Data Collection:1. Data collection is secondary in nature 2. For the evaluation of fund performance and use of different newspaper, magazine, 3. Use of internet mostly, and help of friend to collect the data is the essence of the collection.
TOOL AND TECHNIQUE USED FOR STUDY The most important and widely used measures of performance are: 1. The Treynor Measure 2. The Sharpe Measure 3. Jenson Model 4. Fama Model
The Treynor Measure Developed by Jack Treynor, this performance measure evaluates funds on the basis of Treynor's Index. This Index is a ratio of return generated by the fund over and above risk free rate of return (generally taken to be the return on securities backed by the government, as there is no credit risk associated), during a given period and systematic risk associated with it (beta). Symbolically, it can be represented as Treynor's Index (Ti) = (Ri - Rf)/Bi. Where, Ri represents return on fund, Rf is risk free rate of return and Bi is beta of the fund. All risk-averse investors would like to maximize this value. While a high and positive Treynor's Index shows a superior risk-adjusted performance of a fund, a low and negative Treynor's Index is an indication of unfavorable performance.
The Sharpe Measure In this model, performance of a fund is evaluated on the basis of Sharpe Ratio, which is a ratio of returns generated by the fund over and above risk free rate of return and the total risk associated with it. According to Sharpe, it is the total risk of the fund that the investors are concerned about. So, the model evaluates funds on the basis of reward per unit of total risk. Symbolically, it can be written as: Sharpe Index (Si) = (Ri - Rf)/Si Where, Si is standard deviation of the fund. While a high and positive Sharpe Ratio shows a superior risk-adjusted performance of a fund, a low and negative Sharpe Ratio is an indication of unfavorable performance. Comparison of Sharpe and Treynor Sharpe and Treynor measures are similar in a way, since they both divide the risk premium by a numerical risk measure. The total risk is appropriate when we are evaluating the risk return relationship for welldiversified portfolios. On the other hand, the systematic risk is the relevant measure of risk when we are evaluating less than fully diversified portfolios or individual stocks. For a well-diversified portfolio the total risk is equal to systematic risk. Rankings based on total risk (Sharpe measure) and systematic risk (Treynor measure) should be identical for a well-diversified portfolio, as the total risk is reduced to systematic risk. Therefore, a poorly diversified fund that ranks higher on Treynor measure, compared with another fund that is highly diversified, will rank lower on Sharpe Measure.
Jenson Model Jenson's model proposes another risk adjusted performance measure. This measure was developed by Michael Jenson and is sometimes referred to as the Differential Return Method. This measure involves evaluation of the returns that the fund has generated vs. the returns actually expected out of the fund given the level of its systematic risk. The surplus between the two returns is called Alpha, which measures the performance of a fund compared with the actual returns over the period. Required return of a fund at a given level of risk (Bi) can be calculated as: Ri = Rf + Bi (Rm - Rf) Where, Rm is average market return during the given period. After calculating it, alpha can be obtained by subtracting required return from the actual return of the fund. Higher alpha represents superior performance of the fund and vice versa. Limitation of this model is that it considers only systematic risk not the entire risk associated with the fund and an ordinary investor can not mitigate unsystematic risk, as his knowledge of market is primitive. Fama Model The Eugene Fama model is an extension of Jenson model. This model compares the performance, measured in terms of returns, of a fund with the required return commensurate with the total risk associated with it. The difference between these two is taken as a measure of the performance of the fund and is called net selectivity.
The net selectivity represents the stock selection skill of the fund manager, as it is the excess return over and above the return required to compensate for the total risk taken by the fund manager. Higher value of which indicates that fund manager has earned returns well above the return commensurate with the level of risk taken by him. Required return can be calculated as: Ri = Rf + Si/Sm*(Rm - Rf) Where, Sm is standard deviation of market returns. The net selectivity is then calculated by subtracting this required return from the actual return of the fund. Among the above performance measures, two models namely, Treynor measure and Jenson model use systematic risk based on the premise that the unsystematic risk is diversifiable. These models are suitable for large investors like institutional investors with high risk taking capacities as they do not face paucity of funds and can invest in a number of options to dilute some risks. For them, a portfolio can be spread across a number of stocks and sectors. However, Sharpe measure and Fama model that consider the entire risk associated with fund are suitable for small investors, as the ordinary investor lacks the necessary skill and resources to diversified. Moreover, the selection of the fund on the basis of superior stock selection ability of the fund manager will also help in safeguarding the money invested to a great extent. The investment in funds that have generated big returns at higher levels of risks leaves the money all the more prone to risks of all kinds that may exceed the individual investors' risk appetite.
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Evaluation of the mutual fund scheme on the bases of fund return and standard deviation and variance & co-variance of the fund.
NAME OF THE SCHME
FUND RETURN 0.000484 0.001069 0.000056 0.000328 0.003343
STANDARD DEVIATIOON 0.003922
VARIANCE
COVARIANCE 8.098889
CANBANK INDEX-GROWTH
0.000015
GIC BALANCE FUND LIC G SEC FUND-DIVIDENT UTI BALANCE FUND-GROWTH SBI MAGNUM BALANCE FUNDDIVIDENT ESCORTS BALANCED FUNDDIVIDENT PRUDENTIAL ICICI BALANCEGROWTH BIRLA BOND INDEX FUNDGROWTH CHOLA GROWTH FUND-GROWTH ING VYSYA LIQUID FUNDGROWTH RELIANCE GROWTH-GROWTH SAHARA TAXGAIN-GROWTH SUNDARAM MONEY FUNDGROWTH JM MIP FUND-MONTHLY DIVIDENT
0.002376 0.001152 0.002871 0.003343
0.000006 0.000001 0.000008 0.000011
2.22204 20.64 8.753963 3.051424
0.001927
0.075353
0.005678
39.11232
0.001004
0.0029
0.000008
2.88808
0.000125
0.000376
3.006045
0.000908 0.000263
0.005401 0.000338
0.000029 0
5.951515 1.284391
0.01095 0.00588 0.000642
0.042239 0.015326 0.002047
0.001784 0.000235 0.000004
3.857559 2.60629 3.19022
0.000035
0.000009
0.257009
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FRANKLIN FMCG FUNDDIVIDENT GRINDLAYS CASH FUNDGROWTH ABN AMRO CASH FUND-GROWTH
0.001107
0.002448
0.000006
2.212039
0.000203
0.000115
0.568048
0.000152
0.000013
0.082891
The square of standard deviation of returns gives the Variance. Coefficient of variation (COV) is found by dividing standard deviation by mean returns. return (NAVt- NAVt-1)/ NAVt-1 Where NAVt is Net asset value of a mutual fund or Index for a day t ,NAVt-1, is Net asset value of annual fund or Index for day (t-1). Returns on each of these seventeen mutual funds and also for each of the two indices is given in the following table.
For the S & P Index, the returns are
Return= Indext- Indext-1/ Indext-1All return are calculated on

the bases of S &p index bases, it consist both private & public sector scheme. there is 5000 scheme but only 17 scheme to consider for study because of time constraints. Detailed study of this fund comes under data interpretation and analysis of the fund further in this project
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RETURNS OF ONE YEAR FROM 15 MARCH TO 15 APRIL OF THE SELECT MUTUAL FUND
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TOP 15 OPEN ENDED -EQUITY FUNDS - PERIOD (LAST 3 YEARS)
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Rank
Scheme Name
Date
NAV (Rs.)
Last 3 Years 34.5
Since Inception
Reliance Pharma Fund - Growth
Apr 12 , 2010 Apr 12 , 2010
49.23
31.33
Reliance Diversified Power Sector Fund Growth
80.86
32.36
42.43
Reliance Banking Fund - Growth
Apr 12 , 2010 Apr 12 , 2010
81.35
31.88
35.75
IDFC Premier Equity Fund - Plan A - Growth
28.92
28.96
26.39
Reliance Regular Savings Fund Equity - Growth
Apr 12 , 2010
29.44
26.82
24.97
Taurus Taxshield Growth
Apr 12 , 2010 Apr 12 , 2010
32.44
26.28
14.18
Sundaram BNP Paribas SMILE Fund - Growth
32.02
24.04
25.41
59
ICICI Prudential Discovery Fund IP- Growth
Apr 12 , 2010
19.68
23.53
18.04
Franklin Pharma Fund - Growth
Apr 12 , 2010 Apr 12 , 2010
54.76
23.48
16.67
10
Birla Sun Life Dividend Yield Plus - Growth
74.44
23.08
32.67
11
UTI Thematic Banking Sector Fund - Growth
Apr 12 , 2010
36.2
22.84
23.72
12
ING Dividend Yield Fund - Growth
Apr 12 , 2010 Apr 12 , 2010 Apr 12 , 2010 Apr 12 , 2010
20.57
22.74
17.6
13
UTI Dividend Yield Fund - Growth
28.69
22.73
24.32
14
UTI Opportunities Fund - Growth
24.42
22.63
20.93
15
Templeton India Growth Fund Growth
115.71 22.61
19.88
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ICRA 7-STAR GOLD AWARD WINNERS 2009 - ONE YEAR PERFORMANCE
Scheme Name DSP Black Rock Balanced Fund Fortis Flexi Debt Fund
Ranking Category Open Ended Balanced
Award
Open Ended Debt - Long Term
Birla Sun Life Dynamic Bond Fund UTI MNC Fund
Open Ended Debt - Short Term Open Ended Diversified Equity - Aggressive
UTI Contra Fund
Open Ended Diversified Equity Defensive
UTI Nifty Fund Fidelity Tax Advantage Fund UTI Floating Rate Fund - Short Term
Open Ended Equity Index Open Ended Equity Linked Savings Scheme (ELSS) Open Ended Floating Rate Fund
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ICICI Prudential Gilt Fund Investment Plan Kotak Liquid - Regular Plan LIC MF Liquid Plus Fund Reliance Liquid Plus Institutional Plan DWS Money Plus Advantage Fund
Open Ended Gilt
Open Ended Liquid
Open Ended Liquid Plus Open Ended Liquid Plus Institutional Plan Open Ended Marginal Equity
The ranks assigned by ICRA/ICRA Online are based on an objective analysis of information obtained from the entities concerned as also other sources considered reliable by ICRA/ICRA Online. However, the ranks must be construed solely as statements of opinion and ICRA/ICRA Online shall not be liable for any losses incurred by any user from any use of the ranks. Also, the ranks are neither a certificate of any statutory compliance nor any guarantee on the future performance of the ranked entities/schemes. An entity wishing to use the ICRA Online Mutual Funds Rankings for any publicity or in its prospectus / offer document / promotional literature / advertisement or wishing to re-disseminate these rankings may do so only after obtaining the written permission of ICRA / ICRA Online.
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PERFORMANCE OF TATA MUTUAL FUND Scheme Name Tata Equity Opportunitie s Fund Growth Tata Growth Fund Growth Tata Liquid Fund Super High Investment Plan Growth Tata Gilt High Investment Fund Growth 0.48 0.42 0.66 0.37 2.29 -2.01 5.22 0.09 0.18 0.41 1.05 2.08 4.35 7.04 1.02 1.11 5.05 4.66 10.28 91.82 8.10 0.02 0.15 2.51 2.42 12.88 93.31 11.23 7 days 14 days 1 3 6 1 year 3 year
month month month
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Tata Monthly Income Fund Growth Tata Balanced Fund Growth Tata Pure Equity Fund - Growth Tata Income Fund Growth 1.02 0.81 1.01 0.61 2.17 -1.26 4.83 0.11 0.09 2.35 3.21 11.41 76.32 14.12 0.52 0.91 2.31 4.13 11.67 69.02 14.62 0.19 0.36 0.76 0.41 2.69 5.44 7.19
TATA
mutual fund growth plan which is considered for capital
appreciation in the value of the unit of the fund showing a good growth in opportunities fund-growth scheme like 3 yearly growth is 11.23 and one yearly growth is 93.31 and other scheme like tata growth fund showing 91.82 growth in the fund and scheme tata pure equity fundgrowth is giving 76.32% yearly return and 14.12% 3 yearly growth in the return. So tata growth fund paying a good return to investors.
Tata Select Equity Fund Appreciation Tata Tax Saving Fund Tata Life Sciences and Technology Fund - Appreciation Tata Liquid Fund - Regular Investment Plan - Growth Tata Gilt Securities Fund Growth Tata Short Term Bond Fund Growth Tata Income Plus Fund - Plan A - Growth Tata Income Plus Fund - Plan B - Growth Tata Index Fund nn- Nifty Plan - Option A Tata Index Fund - Sensex Plan
-0.38 -0.29 2.02 3.85 16.24 93.64 8.53
-0.03 -0.14 2.04 2.48 9.47 72.33 8.14
-0.66
0.66 2.51 5.86 11.07 107.18 10.35
0.08
0.17 0.38 0.95 1.88
3.96
6.69
0.48
0.42 0.66 0.37 2.27 -2.04 5.21
0.17
0.25 0.47 1.14 2.24
3.91
8.73
0.06
0.11 0.28 0.74 1.48
2.13
4.78
0.06
0.11 0.28 0.74 1.48
2.11
4.79
-0.01 -0.59 1.23 4.36 5.23 56.78 7.54
-0.40 -0.80 0.86 4.03 4.03 60.98 6.62

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- Option A Tata also provide tax saving fund which are provide a return 72.33%annualy and 8.14% for 3 year.tata income plus fund- plan Agrowth is not provide good return that is 4.78% and 2.11%annaly. And tata index fund-sebsex plan-option a provide 60.98% annually and 6.62 reliable growth in the fund. Tata Fixed Maturity Plan - Series 25 - Plan A RIP - Growth Tata Fixed Maturity Plan - Series 25 - Plan A HIP - Growth Tata Fixed Maturity Plan - Series 25 - Plan A SHIP - Growth Tata Fixed Maturity Plan - Series 25 - Plan B RIP - Growth Tata Fixed Maturity Plan - Series 25 - Plan B HIP - Growth Tata Fixed Maturity Plan - Series 25 - Plan B SHIP - Growth
0.30 0.37 0.93 1.86 4.10
0.32 0.40 1.00 1.99 4.24
0.32 0.40 1.01 2.08 4.38
0.32 0.39 0.86 2.05
0.32 0.39 0.86 1.93
0.30 0.36 0.79 1.84
Tata Fixed Maturity Plan - Series 26 - Plan A - 0.13 0.25
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Growth Tata Fixed Maturity Plan - Series 26 - Plan B Growth Tata fixed maturity plan-series 25plan A-rip-growth fund provide a consistant return to the fund. Under this plan investment is done for a particular time period. Tata fund provide a 8 fund to invest for maturity plan. Tata Gilt Retirement Plan (2802-25) - Appreciation Tata Gilt Retirement Plan (2802-16) - App Tata MIP Plus - Growth Tata Equity P/E Fund - Growth Tata Floating Rate Fund - Short Term - Institutional Plan Growth Tata Dividend Yield Fund Growth 0.07 0.15 0.34 0.92 1.75 4.19 7.23
0.48
0.42 0.66 0.37 2.27 -2.04 5.21
0.48
0.42 0.66 0.37 2.27 -2.04 5.21
0.51 0.54
0.57 1.39 1.89 5.92 13.77 8.11 0.99 3.02 2.61 13.06 91.41 19.33
0.55
1.56 5.19 7.14 16.53 90.13 18.51
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Tata Infrastructure Fund Growth Tata Service Industries Fund Growth
-0.09
-0.77 2.86 3.59 6.52 69.49 12.85
0.19
1.30 4.19 1.94 7.52 100.71 6.24
Tata mutual fund also provide retirement benefit plan under their mutual fund unit. But the performance of these types of unit is not good as it can be expected from this fund. But other fund like tata infrastructure fund and tata service industries fund-growth fund paying a good return to the investor. The growth rate of these fund is 100.71 for annually and 6.24 for 3 yearly and other fund like infrastructure fund provide 69.49% annaly and 12.85 for 3 year. Tata Fixed Income Portfolio Fund Series A1 - Retail - Growth Tata Fixed Income Portfolio Fund Series B2 - Retail - Growth Tata Fixed Income Portfolio Fund Series A2 - Retail - Growth Tata Fixed Income Portfolio Fund Series A3 - Retail - Growth Tata Fixed Income Portfolio Fund -
0.00 0.00 0.00
0.03 0.07
0.35
0.05 0.10 0.24 0.61 1.22 2.56
0.06 0.10 0.25 0.67 1.32 2.52
0.06 0.10 0.26 0.70 1.41 2.70
0.11 0.22 0.47 1.59 2.07 3.13

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Series B3 - Retail - Growth Tata Fixed Income Portfolio Fund Series B3 - Inst - Growth Tata Fixed Income Portfolio Fund Series C2 - Ret - Growth Tata Fixed Income Portfolio Fund Series C3 - Ret - Growth Tata Fixed Income Portfolio Fund Series C3 - IP - Growth
0.11 0.23 0.48
0.00 0.00 0.00 0.02 0.22 1.21
0.10 0.21 0.47 1.13 1.73 2.94
0.11 0.21 0.45
Tata fund provide fixed inome portfolio fund and retail fund. These fund are emerging fund but are showing a good growth in there value and return. Some are the fund is new for invesetor and can be risk to invest in them.so when investor are going to invest in these fund be careful to select the fund.
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PERFORMANCE EVALUATION OF LIC MUTUAL FUND
Scheme Name LIC MF Unit Linked Insurance scheme LIC Balanced Plan C (Growth) LIC MF Growth Fund - Growth LIC MF Index Fund - Sensex Plan - Growth LIC MF Inedex Fund - Nifty Plan - Growth
7 days 14 days 1 month 3 month 6 month 1 year
1.06
0.29
1.77
1.92
4.04
27.20
0.98
-0.12
1.41
0.30
4.69
31.22
0.15
-0.75
1.95
3.24
3.76
65.43
-0.41
-0.79
0.94
4.31
4.31
56.79
-0.12
-0.69
1.33
4.63
5.34
52.28
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LIC Provide a good growth in the value of fund. Under lic we discuss lic 1yearly growth in the fund that is 27.20 for lic mf unit linked insurance scheme that Is famous under lic plan.other plan like growth fund that provide 65.43% growth in the value of the fund and lic index fund of nifty plan also giving 52.28% growth in the value.
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LIC MF Floating Rate Fund - Short Term - Growth LIC MF Floater - Monthly Income Plan Growth
0.10 0.18 0.48 1.27 2.60 5.56
0.46 0.43 1.24 2.31 4.46 13.80
LIC MF Opportunities Fund - Growth
0.04 0.82
1.64 2.75 3.18 48.24
LIC MF India Vision Fund - Growth LIC MF Interval Fund - Annual Plan Series 1 - Growth LIC MF Interval Fund - Quarterly Plan Series 2 - Growth
0.99 0.27 2.04 1.52 6.60 43.08
0.11 0.23 0.49 1.46 2.96 5.80
0.12 0.24 0.53 1.28 2.88 5.14
LIC Equity Fund - Growth
0.00
0.88 0.76
1.83 2.58 2.28 57.17
LIC Tax Plan - Growth
0.10
1.72 2.14 1.62 50.43
Under LIC mutual floating rate fund-short term-growth provide a very less return that is 5.56% for the year that is very less while other plan LIC tax plan-growth is provide 50.43% growth can be reliable but not too much good for the investor because of other plan is less
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effective out of 8 plan like vision fund, opportunities fund and monthly income plan is not paying well
LIC MF Interval Fund Monthly Plan - Series 1 Growth 5.50 0.10 0.19 0.40 0.81 2.91 5.24
LIC G Sec Fund - Growth
0.09 0.90 0.38 0.18
1.93
4.79
LIC MF Liquid Fund - Growth 0.08 0.16 0.34 0.97 2.14 4.76 7.30 LIC MF Savings Plus Fund Growth LIC G Sec Fund - Provident Fund Plan - Growth LIC MF Income Plus Fund Growth . LIC interval fund monthly plan and lic g sec fund growth plan and liquid plan and provident fund plan and income plus fund growth plan are not so good and return of them is very low monthly and year wisely.
0.09 0.20 0.47 1.25 2.50 5.44 6.83
0.09 0.90 0.38 0.18
1.93
5.50
4.79
0.09 0.16 0.46 1.23 2.47 5.30
PERFORMANCE OF RELIANCE MUTUAL FUND Scheme Name Reliance Vision Growth Reliance Liquid Fund - Treasury Plan - Retail Growth Reliance Income Fund - Retail Growth Plan Growth Reliance Growth Growth Reliance Medium Term Fund 0.40 0.38 0.88 1.04 2.99 1.32 10.10 0.08 0.17 0.38 0.99 2.01 4.46 6.82 7 days 14 days 1 month 3 month 6 month 1 year 3 year
0.53
0.20
2.52
4.35
9.49
74.68 12.44
1.03
1.33
4.79
6.08
14.97
94.30 18.33
0.10
0.20
0.45
1.19
2.36
4.97
6.77
75
Growth Reliance Liquid Fund - Cash Plan - 0.06 Growth 0.10 0.28 0.70 1.34 2.40 4.48
Reliance mutual fund is the prominent fund in all fund the fund. In all fund reliance vision-growth is provide 74.68 annually growth but last 3 year performance is also good that is 12.44%.and reliance growth fund provide 94.30% annually and 18.33% 3 yearly growth is well for the fund. But other fund is not provide good return for the fund.
Reliance Liquidity Fund - Growth 0.09 0.17 0.40 1.04 2.09 4.56 7.12 Reliance Regular Savings Fund Equity - Growth Reliance Regular Savings Fund Debt - Growth Reliance Regular Savings Fund Balanced - Growth Reliance Tax Saver Fund -
0.19 0.17 2.79 4.02 12.84 93.75 24.48
0.30 0.37 0.77 1.68 3.88 5.43 6.17
0.63 0.38 2.25 9.32 14.98 71.45
21.79
0.84 1.08 4.06 6.01 15.73 80.80 11.43
76
Growth 0.07
Reliance Equity Fund - Growth
0.31
1.43 0.32 0.59 50.45 9.01
Reliance Long Term Equity Fund - Growth Reliance Interval Fund - Monthly Series I - Growth Reliance Interval Fund - Monthly Series I - Institutional - Growth
2.08 2.34 8.70 7.01 15.73 82.71 12.89
0.07 0.16 0.43 0.99 1.96 4.29 7.28
0.07 0.16 0.44 1.00 1.97 4.03 7.28
Reliance liquidity fund-growth fund provide very less return while reliance regular saving fund- balance prove 71.45% annaly and 21.79% return for 3 yearly. while reliance equity fund also provide recently good performance than the last one time. and other fund in this group is provide normal return.
Reliance Short Term Fund Growth
0.30 0.39 0.84 1.43 3.18
5.44 10.04
77
Reliance Banking Fund Growth Reliance Monthly Income Plan Growth Reliance Liquid Fund - Treasury Plan - Institutional Option Growth Reliance Diversified Power Sector Fund - Growth
2.67 0.83 7.45 10.12 7.24 97.17 29.72
0.39 0.44 1.31 1.94 5.65 17.77 14.47
0.09 0.18 0.40 1.05 2.10
4.60 7.08
0.77 0.49 3.33 5.09 5.33 77.98 30.23
Reliance Pharma Fund - Growth 0.25 0.42 4.58 15.56 35.08 142.90 31.70 Reliance Floating Rate Fund Growth Reliance Media & Entertainment Fund - Growth Reliance NRI Equity Fund Growth
0.09 0.18 0.41 1.08 2.21
4.85 7.31
0.84 6.59 12.31 6.82 20.41 80.65 3.26
1.15 1.06 4.83 4.49 8.88 79.58 13.43
Reliance pharma growth fund growth is maximum under this group of fund that is 142.90 for annually and 31.70% for 3 year other than this reliance nri equity fund-growth fund also having 79.58%growth annually and 13.43% growth for 3 yearly, while reliance monthly income plan
growth a gain 17.77% snf 30.23% gain for 1 and 3 year respectively. reliance banking fund having great opportunity to grow the fund that is 97.17% for annulay and 14.47 for 3 yearly growth having a good growth for the fund. other than this remaining fund provide normal rate of growth for the fund.
Reliance Interval Fund - Monthly Series II - Institutional - Growth Reliance Interval Fund Quarterly Series I - Growth Reliance Interval Fund Quarterly Series I - Inst - Growth Reliance Interval Fund - Annual Series I - Retail - Growth Reliance Interval Fund - Annual Series I - Inst - Growth Reliance Interval Fund Quarterly Series III - Retail Growth Reliance Interval Fund -
0.11 0.23
0.48 0.99
2.01 24.18 7.34
0.10 0.20
0.42 1.05
2.25 4.78 8.02
0.10 0.21
20.51 20.01 19.07
-0.07
0.05
0.05 0.11
0.37 1.27
2.93 5.54
0.05 0.13
0.41 1.39
3.16 5.98
0.11 0.22
0.50 1.20
2.30 4.92
0.11 0.23
0.52 1.23
2.33 4.68
79
Quarterly Series III - Institutional - Growth Reliance Equity Advantage Fund Retail - Growth Reliance Equity Advantage Fund Institutional - Growth 0.38 0.37
0.12
1.41 3.73
4.32 55.39
0.13
1.48 3.83
4.48 55.75
Reliance interval fund monthly series-11 grow by 24.18 for annually and 7.34 for 3yearly.while quarterly series 1 having 8.02 growth for last 3 year and 4.78% for annually. This is a reliable growth from the fund but not incentive for the investor as well. While other new scheme like annual series and retail growth secheme and equity advantage fund provide a consent growth and these fund can get good future in coming months. Reliance Regular Savings Fund - Debt Institutional - Growth Reliance Fixed Horizon Fund 13 - Series 4 - Growth Reliance Fixed Horizon Fund 13 - Series 1 - Growth Reliance Fixed Horizon Fund 13 - Series
0.31 0.40 0.83 1.86 4.27
0.41 0.51 1.12 2.49 5.13
0.13 0.25 0.58 1.46 3.58
0.17 0.28 0.64 1.47
80
2 - Growth Reliance Fixed Horizon Fund 13 - Series 5 - Growth Reliance Fixed Horizon Fund 13 - Series 3 - Growth Reliance Fixed Horizon Fund 13 - Series 6 - Growth Reliance Fixed Horizon Fund 14 - Series 1 - Growth
0.45 0.59 1.09 2.20
0.18 0.31 0.64 1.50
0.43 0.41 0.79 2.20
0.42 0.53 1.12
These are the new fund under reliance mutual fund for the monthly base. They comes with in 1 year base or less it.but the growth of all the fund under positive returen these all fund are invested for a particual horizon of time period. Reliance mutual fund provide a constent return on them. These fund can be for 1,2,,5,7 year base. It depend on the series or policy of the fund.
81
82
FINDING FROM THE STUDY OF THE MUTUAL FUND IN INDIA The basic finding 1. From all the study of mutual fund RELAIANCE MUATULA FUND on the top position. 2. The leading funds are HDFC, ICICI, UTI mutual fund are the main fund in the market. 3. UTI having a large number of scheme under which tax saving plan, retirement plan for each types of the employee or person 4. Reliance is expected to grow in the future time horizon.
FUND WISE FUNDING Finding for the UTI mutual fund 1. Investor are advise to invest in UTI MNC FUND-GROWTH fund which having 75.54 annually growth in fund 2. UTI equity saving plan growth plan are good scheme for less risk taker investor 3. UTI master plus unit scheme 91 growths is best for the future prospective. 4. UTI leadership equity fund growth performing well from last 3 year. 5. UTI India life style fund growth is continues form last 1 year. Finding for TATA Mutual Fund 1. TATA mutual fund is the leading mutual fund in the current time
83
2. Tata equity opportunity fund growth fund has a growth of 93.31 for one year and 11.23 for the 3 year base. this the best growth fund of the Tata mutual fund in the current time up to 22/4/2010 3. Tata growth fund having a 91.82% and 8.10 for annual growth in the fund is the second best fund for fund house. 4. Tata life science &technology fund having a current maximum growth fund as 107.18%increase from the last year and potent growth from last 3 year is 10.35. 5. Tata index fund having 60.98 growth and 6.62 growth for 1 and 3 year respectively is the major point for Tata mutual fund. 6. Tata saving fund makes a 72.33% and 8.14% growth in fund house makes fund as potent as other fund and make competitive for other fund houses. Finding for LIC mutual fund 1. LIC dont having much contribution in mutual fund industries 2. LIC unit links insurance plan scheme is growing well 3. LIC mf index fund- nifty plan-growth good as compare to other 4. No. of fund are new in the market to offer more option to the investor 5. LIC tax plan-growth is also including in good scheme of LIC. 6. Other than upper scheme no other scheme provides good growth. Finding For Reliance Mutual Fund 1. Reliance vision-growth of reliance having 74.68 for one year 12.44 for last 3 year having the best fund for fund house.
84
2. Reliance growth-growth having 94.3 for 1 year and 18.33 for 3 year having a good fund scheme 3. Reliance regular saving fun-equity having growth of 93.75 and 24.48 for respectively 1year and 3 year having a great earning scheme. 4. Other fund tax severs fund growth having 80.8 for annually and 11.43 for 3 yearly. 5. Reliance banking fund having 97.17 and 29.72% growth having the good opportunity for investment 6. Reliance Parma fund having maximum growth rate is 142.9 for annually 7. Reliance NRI equity fund-growth having 79.58% growth in the fund. 8. Other than these fund having a normal increase in the growth of the fund. Sector Wise Finding:1. Mutual fund investment is the emerging investment option for the investor. 2. Reliance is the most preferable avenue for the investment. 3. Higher transparency makes mutual fund investment most secure 4. SIP (systematic investment plan) makes investment easy without any high risk. 5. Pharma and banking fund is the most growth fund in the industry 6. Reliance pharma fund is most valuable fund for investment in mutual fund unit. 7. People now invest in mutual fund because stock market is too risky and having a high knowledge for investment
85
8. Exit load has abolished by SEBI makes investment most suitable for purchase and sale of the fund.
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www.mutualfundindia.com www.bluechipindia.com www.google.co.in www.valuesearch.com www.wikipedia.com www.reliancemutualfund.com www.tatamutualfund.com www.uti.com Management of Financial Institution (Shashi K. Gupta) Financial Management ( I.M. Pandy)
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Comparative Performance Evaluation of Selected Mutual Funds in India

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COMPARATIVE PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

Showing working of Mutual Fund

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

Tata mutual fund

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

NAME OF THE SCHME

FUND RETURN 0.000484 0.001069 0.000056 0.000328 0.003343

STANDARD DEVIATIOON 0.003922

0.002376 0.001152 0.002871 0.003343

0.000006 0.000001 0.000008 0.000011

2.22204 20.64 8.753963 3.051424

0.01095 0.00588 0.000642

0.042239 0.015326 0.002047

0.001784 0.000235 0.000004

3.857559 2.60629 3.19022

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

For the S & P Index, the returns are

Return= Indext- Indext-1/ Indext-1All return are calculated on

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

TOP 15 OPEN ENDED -EQUITY FUNDS - PERIOD (LAST 3 YEARS)

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

Last 3 Years 34.5

Reliance Pharma Fund - Growth

Apr 12 , 2010 Apr 12 , 2010

Reliance Diversified Power Sector Fund Growth

Reliance Banking Fund - Growth

Apr 12 , 2010 Apr 12 , 2010

IDFC Premier Equity Fund - Plan A - Growth

Reliance Regular Savings Fund Equity - Growth

Taurus Taxshield Growth

Apr 12 , 2010 Apr 12 , 2010

Sundaram BNP Paribas SMILE Fund - Growth

PERFORMANCE EVALUATION OF SELECTED MUTUAL FUNDS IN INDIA

ICICI Prudential Discovery Fund IP- Growth

Franklin Pharma Fund - Growth

Apr 12 , 2010 Apr 12 , 2010

Birla Sun Life Dividend Yield Plus - Growth