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A

PROJECT REPORT
ON
MUTUAL FUNDS
AT
INDIABULLS SECURITIES LIMITED

TABLE OF CONTENTS
ABSTRACT
CHAPTER-1: INTRODUCTION
1.1 Introduction
1.2. Need Of The Study
1.3. Scope of the Study
1.4. Objectives of the Study
1.5. Research Methodology
1.5.1 Research Design
1.5.2 Data Collection
1.5.3 Secondary Data
1.5.4 Statistical Tools Used:
1.6. Limitations of the Study
1.7 Chapeterisation
CHAPTER-2: INDUSTRY AND COMPANY PROFILE
2.1 Introductions to the Industry
2.2 History and Growth Mutual Fund Industry
2.3 Evolution of Mutual Fund Industry
2.4 Recent News
2.5 Introduction to the Indiabulls Securities Ltd.
2.6 Company Mission, Vision And Objectives
2.7 Organization Structure And Board Of Directors
2.8 Types Products Of Products And Services Offered By Company

2.9 Achievements
2.10

Future Projects

CHAPTER-3 THEORETICAL FROM WORK


3.1 Subject Matter of Mutual Fund:
3.2 Books Referred For the Study
3.3 Case Referred During the Study
3.4 Journals Referred For the Study
3.5 Web Sites Visited For Reference and Collecting Data
CHAPTER-4 DATA ANALYSIS AND INTERPRETATION
CHAPTER-5
5.1 Findings
5.2 Suggestions
5.3 Conclusion
BIBLIOGRAPHY

ABSTRACT
The study is basically made to analyze the various mutual fund schemes of different
sectors to highlight the diversity of investment that Mutual Fund offer.
Through the study one would understand how an investor could fruitfully convert a
pittance into great penny by wisely investing into the right scheme according to his risk
taking abilities. The main aim of the project is to show Mutual Fund as a better avenue for
better return with risk free investment to the potential investors.
The study here has been limited to analyze the performance of mutual funds in selected
sectors with different fund houses. Each fund is analyzed according to its performance
against the other, based on factors like Sharpes Ratio, (Beta) Co-efficient, (NAV)
Returns.
Based on the performance of funds through their return and risk profile, the
observations and findings has been found. And suggest which fund is best for the investor
based on his risk and return profile and classified the performance of funds on the basis of
good performer and non performer for the selected period of time.

CHAPTER-1
INTRODUCTION

1.1 INTRODUCTION
A mutual fund is just the connecting bridge or a financial intermediary that allows a group
of investors to pool their money together with predetermined investment objectives. A mutual
fund is a portfolio, or collection, of individual securities (some combination of stocks, bonds,
or money market instruments) managed according to a specific objective spelled out in the
fund's prospectus. A mutual fund allows investors to pool their money, then the fund invests it
on their behalf.
Unlike individual stocks, whose value fluctuates minute by minute, mutual funds are
priced at the end of each day the market is open, based on what the securities in the portfolio
are worth. The price per share, or net asset value (NAV). A mutual fund operation flowchart
is mentioned below:

Mutual funds can be classified based on the structure and investment objective. By
Structure, mutual funds are closed-end fund and open-end fund.

Closed-End Fund
A closed-end fund looks much like a stock of a publically traded company: it's traded on
some stock exchange, you buy or sell shares in the fund through a broker just like a stock
(including paying a commission), the price fluctuates in response to the fund's performance
and (very important) what people are willing to pay for it. Also like a publically traded
company, only a fixed number of shares are available.
These funds have a stipulated maturity period generally ranging from 3 to 15 years. The
fund is open for subscription only during a specified period. Investors can invest in the
scheme at the time of the initial public issue and thereafter they can buy or sell the units of
the scheme on the stock exchanges where they are listed.
The market price of closed-end funds is determined by supply and demand and not by netasset value (NAV), as is the case in open-end funds. Usually closed mutual funds trade at
discounts to their underlying asset value.
Open-End Fund
An open-end fund is the most common variety of mutual fund. Both existing and new
investors may add any amount of money they want to the fund. In other words, there is no
limit to the number of shares in the fund. Investors buy and sell shares usually by dealing
directly with the fund company, not with any exchange. The price fluctuates in response to
the value of the investments made by the fund, but the fund company values the shares on its
own; investor sentiment about the fund is not considered.
Open-end funds keep some portion of their assets in short-term and money market securities
to provide available funds for redemptions. A large portion of most open mutual funds

is

invested in highly liquid securities, which enables the fund to raise money by selling
securities at prices very close to those used for valuations.

By Investment Objective
Growth Funds: The aim of growth funds is to provide capital appreciation over the medium
to long term. Such schemes normally invest a majority of their corpus in equities. Growth
schemes are ideal for investors who have a long-term outlook and are seeking growth over a
period of time.
Income Funds: The aim of Income Funds is to provide regular and steady income to
investors. Such schemes generally invest in fixed income securities such as bonds, corporate
debentures and Government securities.
Income Funds are ideal for capital stability and regular income. Capital appreciation in such
funds may be limited, though risks are typically lower than that in a growth fund.
Balanced Funds: The aim of Balanced Funds is to provide both growth and regular income.
Such schemes periodically distribute a part of their earning and invest both in equities and
fixed income securities in the proportion indicated in their offer documents. This proportion
affects the risks and the returns associated with the balanced fund - in case equities are
allocated a higher proportion, investors would be exposed to risks similar to that of the equity
market.
Balanced funds with equal allocation to equities and fixed income securities are ideal for
investors looking for a combination of income and moderate growth.
Money Market Funds: The aim of Money Market Funds is to provide easy liquidity,
preservation of capital and moderate income. These schemes generally invest in safer shortterm instruments such as Treasury Bills, Certificates of Deposit, Commercial Paper and InterBank Call Money. Returns on these schemes may fluctuate depending upon the interest rates
prevailing in the market. These are ideal for corporate and individual investors as a means to
park their surplus funds for short periods.
Tax Saving Schemes: These schemes offer tax rebates to the investors under specific
provisions of the Indian Income Tax laws, as the Government offers tax incentives for
investment in specified avenues. Investments made in Equity Linked Savings Schemes
(ELSS) and Pension Schemes are allowed as deduction under Section 88 of the Indian
Income Tax Act, 1961.

Index Schemes: Index Funds attempt to replicate the performance of a particular index such
as the BSE Sensex or the NSE S&P CNX 50.
Sectoral Funds: Sectoral Funds are those which invest exclusively in specified sector(s)
such as infrastructure, , Pharmaceuticals, Information Technology, banking, service and fmcg
etc. These schemes carry higher risk as compared to general equity schemes as the portfolio
is less diversified, i.e. restricted to specific sector(s) / industry.
1.2. NEED OF THE STUDY
Mutual fund is an investment that pools money from shareholders and invest in a
variety of securities, such as stocks, bonds and money market instrument. The need of the
study is to analyze the performance of mutual funds in different sectors like infrastructure,
Pharmaceuticals, Information Technology, banking, fmcg and service and to identify the new
market trends in the above mentioned sectors. And look after the potential impact on
stakeholders in to order to make an assessment of the possible impact of the entry load
removal on stakeholders, the main aim of the project is to project Mutual Fund as a better
avenue for investment on a long-term or short-term basis and other essential needs are:

Mutual Fund is a productive package for an investor with limited finances.

This project creates an awareness that the Mutual Fund is a worthy investment
practice.

Mutual Fund is a globally proven instrument.

Mutual Funds areUnit Trust as it is called in some parts of the world has a long
and successful history.

The driving force of Mutual Funds is the safety of the principal guaranteed.
We have attempted to draw up possible scenarios of what could happen in the short

term and long term and its overall impact on the industry.
Hence, the researcher felt the need to study the analyze of sect oral funds in mutual
fund with reference to SEBIs (Securities and Exchange Board of India) directives,

NSE(National Stock Exchange),AMCs(Asset Management Companies) and the potential


Investors.

1.3. SCOPE OF THE STUDY

By this underlying research, the researcher can identify the sectors which give highest
return with less risk to the investors and also provide the less volatility with superior risk
adjustment and return that are believed to have growth.

Investors, meanwhile, should continue to choose funds with a good track record and
should not be persuaded to buy products that they dont want. In each sector mutual fund
plays a crucial role and provides different schemes to the investors and also provides the
advisory services to the potential investors.

The pros of mutual fund are:

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.

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.

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.

Just like an individual stock, mutual fund also allows investors to liquidate their
holdings as and when they want.

Investments in mutual fund are considered to be easy, compare to other available


instruments in the market, and the minimum investment is small.

Thus investors choose mutual funds as their primary means of investing, as Mutual funds
provide professional management, diversification, convenience and liquidity.

The importantly, investors should not hesitate to pay a higher fee if they receive sound
investment advice and quality service from the distributors.

1.4. OBJECTIVES OF THE STUDY

PRIMARY OBJECTIVES:
A Study on Mutual Funds at Indiabulls Securities Limited
SECONDARY OBJECTIVES:

To analyze the return and its consistency in each sector.

To analyze the risk that is associated with each sector.

To analyze the consistency of growth in performance of these funds.

1.5. RESEARCH METHODOLOGY

The Methodology involves randomly selecting the different schemes of different fund
houses in different sectors of the country.

1.5.1 RESEARCH DESIGN: Analytical research


1.5.2 DATA COLLECTION: The data can be collected through Secondary sources.
1.5.3 SECONDARY DATA:
Secondary data means the data which is collected from existing resources (or)
relevant sources for ex: Fund card, Mail, Library books, Articles etc.

1.5.4 STATISTICAL TOOLS USED:


These are tools, which helps to analyze the collected data. This analysis contains
various approaches like comparisons, estimation etc . Usually the returns derived are only
considered for choosing the best scheme. But it is only half of the consideration for choosing
the best scheme. The risk should also be considered in choosing the suitable and best scheme.
Therefore, what matters a lot, is the risk adjusted returns. There are several measures to
measure the performance of the scheme and rate it. Each of these measures uses past
performance data.
Standard Deviation
The most basic of all measures- Standard Deviation allows you to evaluate the volatility of
the fund. It allows you to measure the consistency of the returns. Volatility is often a direct
indicator of the risks taken by the fund. The standard deviation of a fund measures this risk
by measuring the degree to which the fund fluctuates in relation to its mean return, the
average return of a fund over a period of time. A security that is volatile is also considered
higher risk because its performance may change quickly in either direction at any
moment.
Beta
Beta indicates the level of volatility associated with the fund as compared to the benchmark.
So quite naturally the success of Beta is heavily dependent on the correlation between a fund
and its benchmark. Thus if the fund's portfolio doesn't have a relevant benchmark index then
a beta would be grossly inadequate. A beta that is greater than 1 means that the fund is more
volatile than the benchmark, while a beta of less than 1 means that the fund is less volatile

than the index. A fund with a beta very close to 1 means the fund's performance closely
matches the index or benchmark.
Investors expecting the market to be bullish may choose funds exhibiting high betas,
which increase investors' chances of beating the market. If an investor expects the market to
be bearish in the near future, the funds that have betas less than 1 are a good choice because
they would be expected to decline less in value than the index.
Sharpes performance index
Sharpes performance index gives a single value to be used for the performance ranking of
various funds or portfolios. Sharpe index measures the risk premium of the portfolio relative
to the total amount of risk in the portfolio. This risk premium is the difference between the
portfolios average rate of return and the riskless rate of return.
2
Coefficient of Determination ( R ) --- a measure of reliability of Beta

Beta depends on the index used to calculate it. It can happen that the index bears no
correlation with the movements in the fund. Due to this reason, it is essential to take a look at
statistical value called Coefficient of Determination along with Beta. It shows how reliable
the beta number is. It varies between zero and one. Value of 1 indicates perfect correlation
2
with the index. Thus, an If ( R ) =0.64 it implies that 64% of the variation in the portfolio

returns is due to variations in the market returns. Mathematically it is the square of


correlation coefficient(R).

NOTE:
Where X and Y are returns on the portfolio and returns on the market respectively.
2
Beta and ( R ) should thus be used together when examining a funds risk profile.
1.5.5 Period of Study

Study is restricted for lost 3 years (2012-2015).


1.6. LIMITATIONS OF THE STUDY
1. The period of the study under which the research done is very short so that there will
not be consistency in the performance of various schemes.
2. The inception period of the funds under study varies. Hence the stability of
consistency of the funds varies.
3. The size of the funds under the study varies from each and every sector.
4. The market fluctuation of the portfolio would also differ from each other.
5. Some external factors that affect the performances were not taken into consideration.

1.7 CHAPETERISATION

The project title is A Study on Mutual Funds at Indiabulls Securities Limited


Chapter 1
It consists of Introduction, Statement of the Problem, Need for the Study, Scope of
the Study, Objective of the Study, Research Methodology and Limitations of the Study.
Chapter 2
It consists of industry Profile and Company Profile of the Organization.
Chapter 3
It consists of theoretical framework
Chapter 4
It represents the Data Analysis and Interpretation.
Chapter 5
It consists of findings, Suggestions, and Conclusion.

CHAPTER-2
INDUSTRY AND COMPANY PROFILE

2.1 INTRODUCTIONS TO THE INDUSTRY


The Indian financial system based on four basic components like Financial Market,
Financial Institutions, Financial Service, Financial Instruments. All are play important role
for smooth activities for the transfer of the funds and allocation of the funds.
The main aim of the Indian financial system is that providing the efficiently services to
the capital market. The Indian capital market has been increasing tremendously during the
second generation reforms. The first generation reforms started in 1991 the concept of LPG.
(Liberalization, privatization, Globalization)
Then after 1997 second generation reforms was started, still the its going on, its include
reforms of industrial investment, reforms of fiscal policy, reforms of ex- imp policy, reforms
of public sector, reforms of financial sector, reforms of foreign investment through the
institutional investors, reforms banking sectors.
The economic development model adopted by India in the post independence era has
been characterized by mixed economy with the public sector playing a dominating role and
the activities in private industrial sector control measures emaciated form time to time. The
last two decades have been a phenomenal expansion in the geographical coverage and the
financial spread of our financial system.
The spared of the banking system has been a major factor in promoting financial
intermediation in the economy and in the growth of financial savings with progressive
liberalization of economic policies, there has been a rapid growth of capital market, money
market and financial services industry including merchant banking, leasing and venture
capital, leasing, hire purchasing.
Consistent with the growth of financial sector and second generation reforms its need to
fruition of the financial sector. It also need to providing the efficient service to the investor
mostly if the investors are supply small amount, in that point of view the mutual fund play
vital for better service to the small investors. The main vision for the analysis for this study is
to scrutinize the performance of five star rated mutual funds, given the weight of risk, return,
and assets under management, net assets value, book value and price earnings ratio.

2.2 HISTORY AND GROWTH MUTUAL FUND INDUSTRY


The mutual fund industry in India began in 1963 with the formation of the Unit Trust
of India (UTI) as an initiative of the Government of India and the Reserve Bank of India.
Much later, in 1987, SBI Mutual Fund became the first non-UTI mutual fund in India.
Subsequently, the year 1993 heralded a new era in the mutual fund industry. This was
marked by the entry of private companies in the sector. After the Securities and Exchange
Board of India (SEBI) Act was passed in 1992, the SEBI Mutual Fund Regulations came
into being in 1996. Since then, the Mutual fund companies have continued to grow
exponentially with foreign institutions setting shop in India, through joint ventures and
acquisitions.
As the industry expanded, a non-profit organization, the Association of Mutual Funds in
India (AMFI), was established on 1995. Its objective is to promote healthy and ethical
marketing practices in the Indian mutual fund Industry. SEBI has made AMFI certification
mandatory for all those engaged in selling or marketing mutual fund products.
By the year 1970, the industry had 361 Funds with combined total assets of 47.6 billion
dollars in 10.7 million shareholders account. However, from 1970 and on wards rising
interest rates, stock market stagnation, inflation and investors some other reservations about
the profitability of Mutual Funds, Adversely affected the growth of mutual funds. Hence
Mutual Funds realized the need to introduce new types of Mutual Funds, which were in
tune with changing requirements and interests of the investors. The 1970s saw a new kind
of fund innovation; Funds with no sales commissions called no load funds. The largest
and most successful no load family of funds is the Vanguard Funds, created by John Bogle
in 1977.
2.3 EVOLUTION OF MUTUAL FUND INDUSTRY
The Indian capital market having a long history spanning over a century had passed
through the most radical phase. The Indian Capital Market witnessed unprecedented
developments and innovations during the eighties and nineties. One such development was
the increased role the mutual fund industry played in financial intermediation. Mutual fund,
as an institutional device, pools investors funds for investment in the capital market under

the direction of an investment manager. Mutual funds bridged the gap between the supply and
demand for funds in the financial market.
In India, the need for the establishment of mutual funds was felt in 1931 and the concept of
mutual fund was coined in 1964, by the intuitive vision of Sri T.T.Krishnamachari,the then
finance minister. Taking into consideration the recommendations of the Central Banking
Enquiry Committee and Shroff Committee, the Central Government established Unit Trust of
India in 1964 through an Act of Parliament, to operate as a financial institution as well as an
investment trust by way of launching UTI Unit Scheme 64.
The overwhelming response and the vast popularity of UTI Unit Scheme 64 and the
Mastershare Scheme in 1986 attracted the attention of banks and other financial institutions
to this industry and paved the way for the entry of public sector banks.
The financial sector reforms were introduced in India as an integral part of the economic
reforms in the early 1990s with the principal objective of removing structural deficiencies
and improving the growth rate of financial markets. Mutual fund reforms attempted for the
creation of a competitive environment by allowing private sector participation. Since 1991,
several mutual funds were set up by private and joint sectors. Many private mutual funds
opted for foreign collaboration due to the technical expertise of their counterparts and past
track record of success.
The SEBI formulated the Mutual Fund Regulations in 1993, establishing a comprehensive
regulatory framework for the first time, while the Indian Mutual Fund Industry (IMFI) had
already passed through two phases of developments. The first phase was between 1964 and
1987 when the UTI was the only player, managing total assets of Rs.4,564 crores by the end
of March 1987.
In 1986, the first growth scheme, Mastershare was launched by UTI and was the first to
be listed on stock exchange. The second phase was between 1987 and 1993 during which
period eight funds were established (six by banks and one each by LIC and GIC). SBI Mutual
Fund was thefirst non UTI mutual fund established in June 1987, followed by Canbank
Mutual fund in December 1987. SBI Mutual Fund launched its first scheme namely, Regular
Income Scheme (RIS) 1987 with 5 years of duration assuring 12 percent return. Canbank
Mutual Fund launched its first scheme, Canshare in December 1987 mopping up Rs.4 crores.
The total assets managed by the industry shot upto Rs.47,004 crores by the end of March
1993.

Since October 1999, Money Market Mutual Funds was brought under the supervisory
control of SEBI on par with liquid funds. The acquisition of Pioneer ITI by Templeton in
August 2000 was one of the biggest mergers in the IMFI. At the end of January 2003, there
were 33 mutual funds managing total assets of Rs.1,21,805 crores after witnessing several
mergers and acquisitions.
The total Assets Under Management (AUM) of the mutual fund houses in the country
crossed Rs.One trillion in June 2003, a decade after the entry of private sector in mutual fund
business.82 The fourth phase had its beginning from February 2003, following the repeal of
the Unit Trust of India Act 1964, bifurcating UTI into two separate entities, namely UTI
Specified Undertaking regulated by Government of India and UTI Mutual Fund Ltd regulated
by SEBI. With mergers taking place among mutual funds, the mutual fund industry entered
its fourth phase of consolidation and growth.
2.4 RECENT NEWS
India is at the first stage of a revolution that has already peaked in the U.S. The U.S. boasts of an
Asset base that is much higher than its bank deposits. In India, mutual fund assets are not even
10% of the bank deposits, but this trend is beginning to change. Recent figures indicate that in the
first quarter of the current fiscal year mutual fund assets went up by 115% whereas bank deposits
rose by only 17%. (Source: Thinktank, the Financial Express September, 99) This is forcing a
large number of banks to adopt the concept of narrow banking wherein the deposits are kept in
Gilts and some other assets which improves liquidity and reduces risk. The basic fact lies that
banks cannot be ignored and they will not close down completely. Their role as intermediaries
cannot be ignored. It is just that Mutual Funds are going to change the way banks do business in
the future.

2.5 INTRODUCTION TO THE INDIABULLS SECURITES LTD.

Introduction

Indiabulls Securities Ltd is engag. in the busine. of Internet based trading and is registered
with SEBI as a stockbroker, trading and clearing member of NSE, member of B. and as a
depositary participant with National Securities Depository Limited CNSDL") and Central
Depository Services (India) Limited CCDSL"). ISL is also a member of the National
Securities Clearing Corporation Limited.
History
Indiabulls Securities Limited (ISL) was incorporated as GPF Securities Private Limited on
June 9, 1995.
The name of the company was changed to Orbis Securities Private Limit. on December 15,
1995 to change the profile of the company and subsequently due to the conversion of the
company into a public limit. company; the name was further changed to Orbis Securities
Limited on January 5, 2004.The name of the company was again changed to Indiabulls
Securities Limit. on February 16, 2004 so as to capitalize on the brand image of the term
"Indiabulls" in the company name. ISL is a corporate member of capital market & derivative
segment of The National Stock Exchange of India Ltd.
Trading With Indiabulls
This section will introduce us about the process and instruments used to help a customer or a
client to trade with Indiabulls securities. This process is almost similar to any other trading
firm but there will be some difference in the cost of brokerage commission.

Trading:
It is a process by which a customer is given facility to buy and sell share this buying and
selling can only be done through some broker and this is where Indiabulls help its customer.

A customer willing to trade with any brokerage house need to have a demat account, trading
account and saving account with a brokerage firm. Anyone having following document can
open all the above mentioned account and can start trading.
Document Required

3 photographs ( signed across)


Photo Identification Proof - any of the following - Voter ID/Driving
License/Passport.
Address Proof any of the following - Voter 1D/Driving License/ Passport/_Bank
statement or pass book sealed and attestation by bank official/ BSNL landline

bill.
A crossed Cheque favoring "India bulls Securities Ltd". of the required
amount. The amount for Demat as well as trading will be Rs. 900/ -(free

Demat
+900 Trading Account) the minimum amount being Rs. 900 a cheque can be
given for a larger amount.
Copy of PAN Card is mandatory.
Registration Kit
CDSL Demat Kit
Bank and address proof declaration. (Master undertaking)
PAN name discrepancy form

These documents may not be consumer friendly but it is to avoid illegal transaction and to
prevent block money this ensures that money invested is account.

Business Model & Operations of Indiabulls Securities Ltd


The three distinct internal business segments are:

Online business.

Offline business

Other Sales

Online business: serving clients primarily through an Internet based relationship targeted
towards clients who vale anytime, anywhere access and can be serviced at low incremental
costs. The Online sales force .1Is all products and services and follows the relationship
manager model.
Offline business: serving clients primarily through an office based relationship targeted
towards clients who else physical interaction and are typically larger accounts. The Offline
Sal. Force .1Is all products and services and follows the relationship manager model.
The Institutional business serving clients such as mutual funds and pension funds is
considered. Part of the offline business due to largely similar client servicing and channel
needs as required for high net worth clients. Indiabulls Securities Limit. has established
relationships with some large institutional players in India and is qualified broker for
Equities, F8,0 and Debt markets for 145 such institutional clients.
Other Sal: includes insurance, research services and other offerings

Basic Requirement for doing Trading


Trading requires Opening a Demat account. Demat refers to a dematerialized account.
You need to open a Demat account if you want to buy or sell stocks. So it is just like a bank
account where actual money is replaced by shares. We need to approach the Depository
Participants (DP, they are like bank branches), to open Demat account.

A depository is a place where the stocks of investors are held in electronic form.
The depository has agents who are called depository participants (DPs).
Think of it like a bank. The head office where all the technology rests and details of all
accounts held is like the depository. And the DPs are the branches that cater to individuals.
There are only two depositories in India

The National Securities Depository Ltd (NSDL) and the


Central Depository Services Ltd (CDSL).

2.6 COMPANY MISSION, VISION AND OBJECTIVES


Mission:

Rapidly increase the number of client relationships by providing a broad array of products
offering to emerge as a clear market leader.
Vision:
To be the largest and most profitable financial services organization in Indian market and
become one stop shop for all non banking financial products and services for the retail
customers.
Objectives:
Consolidation
Aim to be among the top 3 players in existing products within next 3 years.
No New Products
Focus on gaining size and scale in existing core products.
No Capital Market Fund Raising
All businesses are well funded to achieve growth and size. Avoiding excessive debt
from the capital market.
Goal
FY 2017/2018, target of US $ 1.4 bn in cash generation from 3 companies (real estate,
finance and power).

2.7 ORGANIZATION STRUCTURE AND BOARD OF DIRECTORS


The organizational structure of Indiabulls is Functional, which consist of several departments.

Functioning Online: serving clients primarily through an Internet based relationship targeted
towards clients who vale anytime, anywhere access and can be serviced at low incremental
costs.
Functioning Offline: serving clients primarily through an office based relationship targeted
towards clients who value physical interaction.
Online & offline business consist of following departments

Administration
Operations & Service quality
Technology
Finance
Corporate affairs
Human resources
Marketing
Corporate communi.ons
Legal

Organization Structure

Board of Directors:

Mr. Sameer Gehlaut

Chairman & CEO

Gagan Banga

Executive Director

Rajiv Rattan

CEO

Shamsher Singh

Director

Aishwarya Katoch

Director

Karan Singh

Director

Prem Prakash Mird

Director

Saurabh K Mittal

Executive Director

Amit Jain

Company Secretary

2.8 TYPES PRODUCTS OF PRODUCTS AND SERVICES OFFERED BY COMPANY


Indiabulls Ventures Limited (Formerly Indiabulls Securities Limited) is the pioneer in Retail
Broking Industry having a pan India presence and providing services to a customer base
exceeding half a million. Indiabulls Ventures is in the business of providing securities broking
and advisory services and is a corporate member of capital market, wholesale debt market
and derivative segment of NSE and of the capital market and derivative segment of BSE.
Indiabulls Ventures is a brokerage house to be assigned the highest rating BQ-1 by CRISIL.
The company through various types of brokerage accounts provides product and services
related to purchase and sale of securities listed in NSE and BSE. It also provides depository
services, equity research services, mutual fund, IPO distribution to its clients. The company
provides these services through on-line and off-line distribution channel.

Power Indiabulls (PIB)

is the advanced online trading platform from Indiabulls Ventures Limited (Formerly
Indiabulls Securities Limited). PIB provides the best in the class internet trading features and
delivers a seamless and rich online trading experience for its users. PIB comes with a whole
host of online features for the internet trading users ranging from real-time stock prices, to
live trading reports, charting, News Room. PIB provides an integrated online trading platform
for the internet trading community to invest in equity, F&O, Online IPOs and base their
decision on sound fundamental research and technical analysis. It also provides various kinds
of trading reports, each developed to cater to internet trading users distinct needs.

With whole host of advanced online trading features, PIB aims to fulfill the needs of every
genre of investors & help them gain profits in every possible way

Indiabulls Signature Account


With Indiabulls Signature account you will always remain on top of your investments. It
provides you the platform to trade in Equity and Derivatives. With an unmatched service and
nationwide presence, the India bulls Signature account comes bundled with a variety of
exclusive features.

Ease of trading With Indiabulls Signature account you have the flexibility to place
your orders either by logging on the website, calling at the branch or walking in the
branch.

Dedicated Service Branch and Relationship Manager: You can get in touch with
your Relationship Manager and Service Branch for all your trading related requirements.

Power Indiabulls (PIB): You can trade smarter and faster using the Power Indiabulls
application. Access the broad spectrum of sophisticated trading tools and get an edge in
the stock markets.

Online Payment Gateways: Use our online payment gateways facility and get
instant credit in your Trading Account. We currently provide online gateway payment
facility with five major banks HDFC, ICICI, AXIS, Yes Bank and IDBI.

IPOs Indiabulls provides you the flexibility to apply in ongoing IPOs through either
online or offline channels. For applying online, you do not need to fill tedious forms and
write cheques. You can apply conveniently in IPOs from the comfort of your home /
office through our Website/PIB. For applying offline, you can contact your Relationship
Manager/ Service Branch.

Portfolio Tracker: You can track your investments online through our portfolio
tracker functionality. You can conveniently track the daily movement, notional / booked
profits and losses in your portfolio.

Equity Analysis Report A qualified and dedicated team of equity analysts at


Indiabulls publishes various research reports. You can view these reports to gain insight
into the companies of your interest.

News Room: The News Room provides real-time news from stock-markets,
corporate sector, economy and other segments that have a bearing on the market
sentiment.

Market Statistics: This functionality facilitates tracking the market trend by


providing you real time data on top gainers, top losers, volume toppers and most volatile
stocks.

Mobile Power Indiabulls (MPIB): MPIB is a mobile-phone based application,


developed exclusively for Indiabulls customers. Using MPIB, you can view the live
market rates of your favorite stocks and futures contracts on your mobile device. Thus
with MPIB, you can always remain connected with the market, even on the move.

Electronic Contract Notes on Email: This facility enables you to get digitally signed
Electronic Contract Notes on email within 24 hours of executing trades in your Trading
Account.

Introducing Intraday Futures: Intraday Futures Product enables you to take


intraday positions in various future contracts at lower margins. These positions have to be
necessarily squared-off at the day end.

Comprehensive Reports: Track your financials and portfolio efficiently through


various reports like Ledger Statements, Account Summary, Net Portfolio Report, Daily
Transaction Report, Daily Transaction report etc.

Currency Derivatives: Trade in Currency Derivatives which are similar in nature to

Stock or Index Futures contracts. Currency Future Contracts, with INR: USD exchange
rate as the underlying, are available with a monthly expiry.
Depository Services
Indiabulls is a depository participant with the National Securities Depository Limited and
Central Depository Services (India) Limited for trading and settlement of dematerialised
shares. Indiabulls performs clearing services for all securities transactions through its
accounts. We offer depository services to create a seamless transaction platform execute
trades through Indiabulls Ventures Limited (Formerly Indiabulls Securities Limited) and
settle these transactions through the Indiabulls Depository Services. Indiabulls Depository
Services is part of our value added services for our clients that create multiple interfaces with
the client and provide for a solution that takes care of all your needs.
Currency Derivatives
Indiabulls offers trading in the Currency Derivatives Segment in National Stock Exchange
(NSE)
Currency Derivatives are similar in nature to Stock Futures & Option contracts. Currency
Derivatives Contracts (USD-INR, EUR-INR, GBP-INR and JPY-INR) at exchange rate as the
underlying are available for trading with a monthly expiry. At any given time, Currency
Derivatives Contracts are available for trading for the next 12 months expiry for futures
whereas 3 months expiry and 1 quarterly expiry for Options. The Mark-to-Market for
Currency Derivatives is settled on a daily basis in a manner similar to Equity Futures &
Options.
The market for Currency Derivatives is open from 9 A.M to 5 P.M (Monday to Friday).
Registration for Currency Derivatives Segment (CDS) and Online Trading Facility You can
initiate trading in Currency derivatives Segment by following a simple registration procedure.
Indiabulls also offers you the convenience of Online Trading in Currency Derivatives. For
registration in CDS and availing Online Trading facility, please contact your Service Branch /
Relationship Manager.

IPO Online
For various reasons, we often miss the opportunity of subscribing to anIPO. It can either be
because we could not procure the application form or we did not have the time to fill up the
form and submit it. The most important benefit of the 'ONLINE IPO facility offered by
Indiabulls Ventures Limited (Formerly Indiabulls Securities Limited). is the convenience in
submission of applications from anywhere breaking the limitations of time and geography.
You dont need to submit the application in paper form, or write a cheque or go to submit it
anywhere.
Now you have the convenience at your fingertip. You can quickly and seamlessly apply to the
latest public offerings with just a few clicks. Indiabulls Ventures Ltd. offers ONLINE IPO
facility to its registered trading customers at absolutely no cost.
To use theONLINE IPO feature, you need to fulfill the following criteria :

You
You
You
You

must be registered for internet Trading with Indiabulls Ventures Ltd.


must have a demat account with Indiabulls Ventures Ltd.
must have signed the POA agreement for OnlineIPOs.
must have access to Net Banking facility with those banks with which

Indiabulls is providing Payment Gateways. Currently, we are providing


payment gateways for ICICI, IDBI and HDFC Banks.

To sign the agreement for online IPO facility, please get in touch with your relationship
manager or branch

Indiabulls Equity Analysis


ndiabulls Equity Analysis complements its equity broking and advisory services with high
quality comprehensive report which can be accessed online. Research report assess the

potential strength and investment risk by doing in-depth and exhaustive analysis of
operational and financial performance of company, Peer group analysis, present Industry
scenario using advanced and sophisticated forecasting tools and models. These research
reports identify, examine and distill attractive investment opportunities to help you in
building and maintaining your ideal portfolio.
Salient features of Indiabulls Equity Analysis:

Covers report of more than 540 company


Updated on a daily basis
Scorecard on Fundamentals, Valuations and risk
Peer Analysis
Valuation of potential growth
Industry Scenario
Expansion plan
Details of Mergers and Acquisitions

These reports are available to clients without any additional cost. If you are not a client and
wish to view a sample report, please share your details with us.

2.9 Achievements
1) Indiabulls was conferred the status of a Business Superbrand by The Brand
Council, Superbrands India in 2008.[30]
2) Indiabulls Housing Finance was awarded the Presidential Award for The
Fastest Growing Company' by NAREDCO in 2014.[31]
3) IBHFL was awarded "Best Employer Brand", June 2012 for its human
resource practice by The Institute of Public Enterprises.[32]
4) Indiabulls Housing was awarded the Best HFC of the year, 2013 at
ASSOCHAM Real Estate Excellence Awards.[33]
5) Indiabulls Real Estate project, Indiabulls Greens, Chennai won the
Construction Industry Award 2014 for excellence in Gated Community
Projects.[34]

6) Indiabulls Real Estate project, Indiabulls Golf City, Mumbai was awarded by
International Property Awards as the Best Golf Development in India for
Asia Pacific 2015.[35]
7) Indiabulls Real Estate commercial project, One Indiabulls Center, was
awarded as the Best Commercial Property at the Awaaz CRISIL CREDAI
Real Estate Awards in 2009.
2.10 Future projects

Blu, Worli Mumbai


Indiabulls Green, Panvel - Mumbai
Indiabulls Golf City, Savroli - Mumbai
Centrum Park, Gurgaon NCR
Enigma, Gurgaon - NCR
Indiabulls Green, Chennai
Indiabulls City, Sonepat - NCR
One Indiabulls, Gurgaon - NCR
Mega Mall, Vadodara
Indiabulls Gulmohar Avenue, Gurgaon
Indiabulls One O9, Gurgaon NCR

CHAPTER-3
THEORETICAL FROM WORK

3.1 SUBJECT MATTER OF MUTUAL FUND:


What Is A Mutual Fund?
Mutual fund is the pool of the money, based on the trust who invests the savings of a number
of investors who shares a common financial goal, like the capital appreciation and dividend
earning. The money thus collect is then invested in capital market instruments such as shares,
debenture, and foreign market.
Investors invest money and get the units as per the unit value which we called as NAV (net
assets value). Mutual fund is the most suitable investment for the common man as it offers an
opportunity to invest in diversified portfolio management, good research team, professionally
managed Indian stock as well as the foreign market, the main aim of the fund manager is to
taking the scrip that have under value and future will rising, then fund manager sell out the
stock.

Fund manager concentration on risk return trade off, where minimize the risk and maximize
the return through diversification of the portfolio. The most common features of the mutual
fund unit are low cost. The below I mention the how the transactions will done or working
with mutual fund
Definition
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.

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. Being a collection of many stocks,
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.
By Structure

Open - Ended Schemes

Close - Ended Schemes

By Investment Objective

Growth Schemes

Income Schemes

Balanced Schemes

Money Market

Schemes

Other Schemes

Tax Saving Schemes

Special Schemes

Index Schemes

Sector Specific Schemes

Mutual Fund Investing Strategies:


1.

Systematic Investment Plans (SIPs)


These are best suited for young people who have started their careers and need to build

their wealth. SIPs entail an investor to invest a fixed sum of money at regular intervals in
the Mutual fund scheme the investor has chosen, an investor opting for SIP in xyz Mutual
Fund scheme will need to invest a certain sum on money every month/quarter/half-year in
the scheme.
2.

Systematic Withdrawal Plans (SWPs)

These plans are best suited for people nearing retirement. In these plans, an investor
invests in a mutual fund scheme and is allowed to withdraw a fixed sum of money at
regular intervals to take care of his expenses
3.

Systematic Transfer Plans (STPs)


They allow the investor to transfer on a periodic basis a specified amount from one

scheme to another within the same fund family meaning two schemes belonging to the
same mutual fund. A transfer will be treated as redemption of units from the scheme from
which the transfer is made. Such redemption or investment will be at the applicable NAV.
This service allows the investor to manage his investments actively to achieve his
objectives. Many funds do not even charge any transaction fees for his service an added
advantage for the active investor.

Structure of Mutual Fund in India

Mutual Funds in India follow a 3-tier structure. There is a Sponsor (the First tier), who
thinks of starting a mutual fund. The Sponsor approaches the Securities & Exchange Board of
India (SEBI), which is the market regulator and also the regulator for mutual funds.
SEBI checks whether the person is of integrity, whether he has enough experience in the
financial sector, his net-worth etc. Once SEBI is convinced, the sponsor is allowed to create a
Public Trust (the Second tier) as per the Indian Trusts Act, 1882. Trusts have no legal identity
in India and cannot enter into contracts, hence the Trustees are the people authorized to act
on behalf of the Trust. Contracts are entered into in the name of the Trustees.
Once the Trust is created, it is registered with SEBI after which this trust is known as the
mutual fund. It is important to understand the difference between the Sponsor and the Trust.
They are two separate entities. Sponsor is not the Trust; i.e. Sponsor is not the Mutual Fund.
It is the Trust which is the Mutual Fund. The Trustees role is not to manage the money.
Their job is only to see, whether the money is being managed as per stated objectives.
Trustees may be seen as the internal regulators of a mutual fund.

Asset Management Companies (AMC)

AMC forms the third tier of the mutual fund structure. Trustees appoint the Asset
Management Company (AMC), to manage investors money. The AMC in return charges a
fee for the services provided and this fee is borne by the investors as it is deducted from the
money collected from them. The AMCs Board of Directors must have at least 50% of
Directors who are independent directors. The AMC has to be approved by SEBI. The AMC
functions under the supervision of its Board of Directors, and also under the direction of the
Trustees and SEBI.
It is the AMC, which in the name of the Trust, floats new schemes and manages these
schemes by buying and selling securities. In order to do this the AMC needs to follow all
rules and regulations prescribed by SEBI and as per the Investment Management Agreement
it signs with the Trustees.
If any fund manager, analyst intends to buy/ sell some securities, the permission of the
Compliance Officer is a must. A compliance Officer is one of the most important persons in
the AMC. Whenever the fund intends to launch a new scheme, the AMC has to submit a Draft
Offer Document to SEBI. This draft offer document, after getting SEBI approval becomes the
offer document of the scheme.
The Offer Document (OD) is a legal document and investors rely upon the
information provided in the OD for investing in the mutual fund scheme. The Compliance
Officer has to sign the Due Diligence Certificate in the OD.

This certificate says that all the information provided inside the OD is true and
correct. This ensures that there is accountability and somebody is responsible for the OD. In
case there is no compliance officer, then senior executives like CEO, Chairman of the AMC
has to sign the due diligence certificate. The certificate ensures that the AMC takes
responsibility of the OD and its contents.

Custodian

A custodians role is safe keeping of physical securities and also keeping a tab on the
corporate actions like rights, bonus and dividends declared by the companies in which the
fund has invested.
The Custodian is appointed by the Board of Trustees. The custodian also participates in a
clearing and settlement system through approved depository companies on behalf of mutual
funds, in case of dematerialized securities. In India today, securities and units of mutual funds
are no longer held in physical form but mostly in dematerialized form with the Depositories.
The holdings are held in the Depository through Depository Participants (DPs). The
deliveries and receipt of units of a mutual fund are done by the custodian or a depository
participant at the instruction of the AMC and under the overall direction and responsibility of
the Trustees. Regulations provide that the Sponsor and the Custodian must be separate
entities.
3.2 Books Referred For the Study
Security analysis and portfolio management work book
3.3 Case Referred During the Study
3.4 Journals Referred For the Study
The Economic Times
Business Standard
Fact sheet and statements of various fund houses.
3.5 Web Sites Visited For Reference and Collecting Data
www.mutualfundsindia.com
www.valueresearchonline.com
www.moneycontrol.com
www.the-finapolis.com

CHAPTER-4
DATA ANALYSIS
AND
INTERPRETATION

ANALYSIS OF RETURNS FOR SELECTED SECTOR FUNDS

Based on NAV mentioned in fund card the returns for selected sector funds are analyzed for
2013-2016
FUNDS
SBI MAGNUM SECTOR
PHARMA FUND
UTI PHARMA &HEALTH
CARE FUND
FRANKLIN TEMPLETON
PHARMA FUND
RELIANCE PHARMA FUND

AVERAGE
RETURN FOR
2015-2016
129.96

AVERAGE
RETURN FOR
2014-2015
3.55

AVERAGE
RETURN FOR
2013-2014
11.98

96.93

16.80

16.00

155.82

23.62

22.69

171.61

33.59

30.75

PHARMACEUTICAL SECTOR FUNDS


TABLE 2.1.1

CHART 2.1.1
10
9
8
7
6
5
4
3
2
1
0

AVERAGE RETURNS FOR 2015-2016(%)


200
150
NAV
100

171.61%

155.82%
129.96%
96.93%

NAV

50
0
SBI MAGNUM
SECTOR
PHARMA FUND

UTI PHARMA
&HEALTH CARE
FUND

TEMPLETON
PHARMA FUND

RELIANCE
PHARMA FUND

FUNDS

INTREPRETATION:
It shows that the Reliance pharma fund had the highest return 171.61% for 2015-2016and
33.59% for 2014-2015 and 30.75% for 2013-2014 among the selected funds.

INFRASTRUCTURE SECTOR FUNDS


TABLE 2.1.2

CHART 2.1.2
AVERAGE RETURNS FOR 2015-2016(%)

FUNDS
ICICI INFRASTRUCTURE
FUND
CANARA ROBECO
INFRASTRUCTURE FUND
BIRLA SUNLIFE
INFRASTRUCTURE FUND
UTI INFRASTRUCTURE
FUND

AVERAGE
RETURN FOR
2015-2016

AVERAGE
RETURN FOR
2014-2015

54.42

17.56

AVERAGE
RETURN
FOR 20132014
-

73.66

17.51

89.46

13.61

55.79

10.39

23.79

INTREPRETATION:
It shows that the Birla sunlife infra fund had the highest return 89.46% for 2015-2016and
ICICI infra fund had the highest return 17.56% for 2014-2015 and UTI infra fund had the
highest return 23.79% for 2013-2014 among the selected funds.

POWER SECTOR FUNDS


AVERAGE
AVERAGE
FUNDS
RETURN FOR
RETURN FOR
2015-2016
2014-2015
ICICI PRUDENTIAL POWER
73.18
9.72
RELIANCE DIVERSIFIED
POWER
TABLE 2.1.3

CHART 2.1.3

76.92

30.59

AVERAGE
RETURN FOR
2013-2014
23.75
40.45

AVERAGE RETURNS FOR 2015-2016(%)


NAV

78

76.92%

NA 77
V

76
75
74

73.18%

73
72
71
ICICI PRUDENTIAL POWER

RELIANCE DIVERSIFIED
POWER

FUNDS

INTREPRETATION:
It shows that the Reliance diversified power fund had the highest return 76.92%for 20152016and 30.59% for 2014-2015 and 40.45% for 2013-2014 among the selected funds.

FUNDS
RELIANCE BANKING
FUND

AVERAGE
RETURN FOR
2015-2016
96.56

AVERAGE
RETRUN FOR
2014-2015
30.65

AVERAGE
RETURN FOR
2013-2014
26.27

UTI BANKING FUND

91.73

21.98

23.39

BANKING SECTOR FUNDS


TABLE 2.1.4

CHART 2.1.4

AVERAGE RETURNS FOR 2015-2016(%)


NAV
96.56%

97

NAV

96
95
94
93

91.73%

92
91
90
89
RELIANCE BANKING FUND

UTI BANKING FUND

FUNDS

INTREPRETATION:
It shows that the Reliance banking fund had the highest return 96.56% for 2015-2016and
30.65% for 2014-2015 and 26.27% for 2013-2014 among the selected funds.

SERVICE SECTOR FUNDS


TABLE 2.1.5
FUNDS
UTI SERVICE FUND
ICICI PRUDENTIAL
SERVICE FUND
TATA SERVICE FUND
PRINCIPAL SERVICE FUND

AVERAGE
RETURN FOR
2015-2016
85.75
83.62

AVERAGE
RETURN FOR
2014-2015
5.70
2.72

AVERAGE
RETURN FOR
2013-2014
16.86
-

102.26
67.98

7.03
7.59

19.38
-

CHART 2.1.5

AVERAGE RETURNS FOR 2015-2016(%)


NAV

NAV

120
100

102.26%
85.75%

83.62%
67.98%

80
60
40
20
0
UTI SERVICE
FUND

ICICI
PRUDENTIAL
SERVICE FUND
FUNDS

TATA SERVICE
FUND

PRINCIPAL
SERVICE FUND

FUNDS
SBI MAGNUM SECTOR FMCG
FUND
ICICI PRUDENTIAL FMCG
FUND
FRANKLIN TEMPLETON
FMCG FUND

AVERAGE
RETURN FOR
2015-2016

AVERAGE
RETURN FOR
2014-2015

87.55

19.83

AVERAGE
RETURN
FOR 20132014
17.53

75.62

10.74

23.46

74.66

17.78

21.72

INTREPRETATION:
It shows that the Tata service fund had the highest return 102.26% for 2015-2016and
Principal Service fund had the highest return 7.59% for 2014-2015 and Tata service fund had
the highest return 19.38% for 2013-2014 among the selected funds.

FMCG SECTOR FUNDS


TABLE 2.1.6
CHART 2.1.6

AVERAGE RETURNS FOR 2015-2016(%)

NAV

90

87.55%

85
80

75.62%

74.66%

ICICI PRUDENTIAL
FMCG FUND

FRANKLIN TEMPLETON
FMCG FUND

75

NAV

70
65
SBI MAGNUM SECTOR
FMCG FUND

FUNDS

INTREPRETATION:
It shows that the SBI magnum fmcg fund had the highest return 87.55% for 2015-2016and
SBI magnum fmcg fund had the highest return 19.83% for 2014-2015 and ICICI prudential
fmcg fund had the highest return 23.46% for 2013-2014 among the selected funds.

IT SECTOR FUNDS
TABLE 2.1.7
FUNDS

AVERAGE
RETURN
FOR 20152016
146.54

AVERAGE
RETURN FOR
2014-2015
2.15

AVERAGE
RETURN
FOR 20132014
15.81

SBI MAGNUM SECTOR IT FUND

160.10

-0.11

17.55

ICICI PRUDENTIAL IT FUND

159.73

-5.01

16.90

FRANKLIN TEMPLETON IT FUND

CHART 2.1.7

AVERAGE RETURNS FOR 2015-2016(%)


NAV
NAV

165

160.1%

159.73%

SBI MAGNUM SECTOR


IT FUND

ICICI PRUDENTIAL IT
FUND

160
155
150

146.54%

145
140
135
TEMPLETON IT FUND

FUNDS

INTREPRETATION:
It shows that the SBI magnum IT fund had the highest return 160.10% for 2015-2016and
Franklin Templeton IT fund had the highest return 2.15% for 2014-2015 and SBI magnum IT
fund had the highest return 17.55% for 2013-2014 among the selected funds.

STATISTICAL TOOLS
ANALYSIS OF TOTAL RISK (S.D) FOR SELECTED SECTOR FUNDS

The selected funds are ranked based on the total risk (standard deviation) for the
selected sectors.The lowest value of standard deviation secured 1 st rank and the next ranks
are given by gradually increase in their standard deviation values.
FORMULA
Standard Deviation = (i - Ri )2 /n
PHARMACEUTICAL SECTOR FUNDS
TABLE 2.2.1A

FUNDS

RANK

SBI MAGNUM SECTOR PHARMA

STANDARD
DEVIATION
37.52

FUND
UTI PHARMA &HEALTH CARE

26.13

FUND
FRANKLIN TEMPLETON PHARMA

27.37

FUND
RELIANCE PHARMA FUND

35.99

INFRASTRUCTURE SECTOR FUNDS


TABLE 2.2.1B
FUNDS
ICICI INFRASTRUCTURE FUND
CANARA ROBECO
INFRASTRUCTURE FUND
BIRLA SUNLIFE
INFRASTRUCTURE FUND
UTI INFRASTRUCTURE FUND
SAHARA INFRASTRUCTURE
FUND

STANDARD
DEVIATION
36.55
42.96

RANK

41.42

35.57
39.23

1
3

2
5

POWER SECTOR FUNDS


FUNDS
ICICI PRUDENTIAL POWER

STANDARD
DEVIATION
33.13

RANK
1

RELIANCE DIVERSIFIED POWER

38.47

TABLE 2.2.1C
BANKING SECTOR FUNDS
FUNDS
RELIANCE BANKING FUND
UTI BANKING FUND

STANDARD
DEVIATION
40.17

RANK

40.64

TABLE 2.2.1D
SERVICE SECTOR FUNDS
TABLE 2.2.1E
FUNDS

STANDARD
DEVIATION
35.31

RANK

ICICI PRUDENTIAL SERVICE FUND

37.12

TATA SERVICE FUND

41.84

PRINCIPAL SERVICE FUND

33.78

UTI SERVICE FUND

FMCG SECTOR FUNDS


TABLE 2.2.1F
FUNDS
STANDARD
DEVIATION
SBI MAGNUM SECTOR FMCG FUND
24.32
ICICI PRUDENTIAL FMCG FUND
27.19
FRANKLIN TEMPLETON FMCG FUND
20.97

RANK
2
3
1

IT SECTOR FUNDS
TABLE 2.2.1G
FUNDS

STANDARD
DEVIATION

RANK

FRANKLIN TEMPLETON IT FUND

33.68

SBI MAGNUM SECTOR IT FUND

38.42

ICICI PRUDENTIAL IT FUND

35.50

FUNDS RANKED BASED ON SHARPES RATIO


The selected funds are ranked based on the value of Sharpes ratio. The highest value
of Sharpes ratio secured 1st rank and the next ranks are given by gradually decrease in their
Sharpes ratio values.
FORMULA

Sharpe index =

portfolio average return risk free rate of interest


standard deviationof the portfolio

PHARMACEUTICAL SECTOR FUNDS


TABLE 2.2.2A
FUNDS

SHARPES RATIO
VALUE

RANK

ICICI INFRASTRUCTURE
FUND
CANARA ROBECO
INFRASTRUCTURE FUND
BIRLA SUNLIFE
INFRASTRUCTURE FUND
UTI INFRASTRUCTURE FUND

0.52

0.49

0.41

0.33

SAHARA INFRASTRUCTURE
FUND

0.43

INFRASTRUCTURE SECTOR FUNDS


TABLE 2.2.2B
POWER SECTOR FUNDS
FUNDS

SHARPES RATIO
VALUE
0.24

ICICI PRUDENTIAL POWER

RANK
2

RELIANCE DIVERSIFIED POWER


FUNDS

0.79
SHARPES RATIO
VALUE

RANK

SBI MAGNUM SECTOR PHARMA


FUND
UTI PHARMA &HEALTH CARE
FUND
FRANKLIN TEMPLETON PHARMA
FUND
RELIANCE PHARMA FUND

0.10

0.46

0.66

0.79

TABLE 2.2.2C

BANKING SECTOR FUNDS


FUNDS
RELIANCE BANKING FUND
UTI BANKING FUND

SHARPES RATIO
VALUE
0.73

RANK

0.52

TABLE 2.2.2D
SERVICE SECTOR FUNDS
TABLE 2.2.2E
FUNDS

SHARPES RATIO
VALUE
0.19

RANK

ICICI PRUDENTIAL SERVICE FUND

0.14

TATA SERVICE FUND

0.25

UTI SERVICE FUND

PRINCIPAL SERVICE FUND

0.25

FMCG SECTOR FUNDS


TABLE 2.2.2F
FUNDS
SHARPES RATIO
VALUE
SBI MAGNUM SECTOR FMCG FUND
0.59
ICICI PRUDENTIAL
FUNDSFMCG FUND

BETA 0.23

RANK 3

0.53

FRANKLIN TEMPLETON FMCG FUND


SBI MAGNUM SECTOR PHARMA
FUND
UTI PHARMA &HEALTH CARE
FUND
FRANKLIN TEMPLETON PHARMA
FUNDS
FUND
RELIANCE PHARMA FUND
FRANKLIN TEMPLETON IT FUND

RANK

1.13

0.86

0.85
SHARPES RATIO
VALUE
1.07

1
RANK

0.06

SBI MAGNUM SECTOR IT FUND

-0.12

ICICI PRUDENTIAL IT FUND

-0.04

IT SECTOR FUNDS
TABLE 2.2.2G

FUND RANKED BASED ON BETA CO-EFFICIENT


The selected funds are ranked based on the values of Beta Co-efficient (systematic
risk).The lowest value of Beta secured 1st rank and the next ranks are given by gradually
increase in their Beta values.
FORMULA
Beta = nXY - X Y
nX2 (X)2
PHARMACEUTICAL SECTOR FUNDS
TABLE 2.2.3A
INFRASTRUCTURE SECTOR FUNDS

TABLE 2.2.3B
FUNDS

BETA

RANK

ICICI INFRASTRUCTURE FUND

1.00

CANARA ROBECO
INFRASTRUCTURE FUND
BIRLA SUNLIFE INFRASTRUCTURE
FUND
UTI INFRASTRUCTURE FUND

1.18

1.12

0.97

SAHARA INFRASTRUCTURE FUND

1.06

POWER SECTOR FUNDS


FUNDS

BETA

RANK

ICICI PRUDENTIAL POWER

0.91

RELIANCE DIVERSIFIED POWER

1.03

TABLE 2.2.3C
BANKING SECTOR FUNDS
FUNDS

BETA

RANK

RELIANCE BANKING FUND

0.81

UTI BANKING FUND

0.84

TABLE 2.2.3D
SERVICE SECTOR FUNDS
TABLE 2.2.3E
FUNDS

BETA

RANK

UTI SERVICE FUND

0.95

ICICI PRUDENTIAL SERVICE FUND

0.99

TATA SERVICE FUND

1.09

PRINCIPAL SERVICE FUND

0.90

FMCG SECTOR FUNDS


TABLE 2.2.3F
FUNDS

BETA

RANK

SBI MAGNUM SECTOR FMCG FUND

0.78

ICICI PRUDENTIAL FMCG FUND

0.98

FRANKLIN TEMPLETON FMCG FUND

0.78

IT SECTOR FUNDS
TABLE 2.2.3G
FUNDS

BETA

RANK

FRANKLIN TEMPLETON IT FUND

0.96

SBI MAGNUM SECTOR IT FUND

0.93

ICICI PRUDENTIAL IT FUND

0.81

FUND RANKED BASED ON R2


The selected funds are ranked based on the values of R2 (Co-efficient of
Determination).The lowest value of R2 secured 1st rank and the next ranks are given by
gradually increase in their R2 values.
FORMULA

R=

n {( x x mean ) ( y y mean )}

-----------------------------------------------

(x x

mean

) 2 ( y y mean ) 2

PHARMACEUTICAL SECTOR FUNDS


TABLE 2.2.4A

INFRASTRUCTURE SECTOR FUNDS


TABLE 2.2.4B
FUNDS

RANK

ICICI INFRASTRUCTURE FUND

0.94

CANARA ROBECO
INFRASTRUCTURE FUND
BIRLA SUNLIFE INFRASTRUCTURE
FUND
FUNDS
UTI INFRASTRUCTURE FUND

0.95

0.93

R2
0.94

RANK
3

SAHARA INFRASTRUCTURE FUND


SBI MAGNUM SECTOR PHARMA
FUND
UTI PHARMA &HEALTH CARE
FUND
FRANKLIN TEMPLETON PHARMA
FUND
RELIANCE PHARMA FUND

0.92
0.78

0.93

0.82

0.75

POWER SECTOR FUNDS


TABLE 2.2.4C
2

FUNDS

RANK

ICICI PRUDENTIAL POWER

0.95

RELIANCE DIVERSIFIED POWER

0.91

BANKING SECTOR FUNDS


R2

RANK

RELIANCE BANKING FUND

0.95

UTI BANKING FUND

0.98

FUNDS

TABLE 2.2.4D
SERVICE SECTOR FUNDS
TABLE 2.2.4E

R2

RANK

UTI SERVICE FUND

0.93

ICICI PRUDENTIAL SERVICE FUND

0.90

TATA SERVICE FUND

0.86

PRINCIPAL SERVICE FUND

0.91

FUNDS

FMCG SECTOR FUNDS


TABLE 2.2.4F
R2

RANK

SBI MAGNUM SECTOR FMCG FUND

0.57

ICICI PRUDENTIAL FMCG FUND

0.71

FRANKLIN TEMPLETON FMCG FUND

0.75

FUNDS

IT SECTOR FUNDS

R2

RANK

FRANKLIN TEMPLETON IT FUND

0.99

SBI MAGNUM SECTOR IT FUND

0.72

ICICI PRUDENTIAL IT FUND

0.64

FUNDS

TABLE 2.2.4G

CHAPTER-5

5.1 FINDINGS
Findings are made from the data analysis and interpretation. The following findings
are drawn from the analysis of sector funds.

PHARMACEUTICAL SECTOR FUNDS:

Highest return for 2015-2016- Reliance pharma (171.61%)

Highest return for 2014-2015 - Reliance pharma (33.59%)

Highest return for 2013-2014 - Reliance pharma (30.75%)

Best fund by standard deviation value - UTI pharma (26.13)

Best fund by Sharpes ratio value - Reliance pharma (0.79)

Best fund by Beta value - Franklin Templeton pharma (0.85)

Best fund by

value - Reliance pharma (0.75)

In pharmaceutical sector, Reliance pharma fund seems to be good.


INFRASTRUCTURE SECTOR FUNDS:

Highest return for 2015-2016- Birla sunlife infra (89.46%)

Highest return for 2014-2015 - ICICI infra (17.56%)

Highest return for 2013-2014 - UTI infra (23.79%)

Best fund by standard deviation value - UTI infra (35.57)

Best fund by Sharpes ratio value - ICICI infra (0.52)

Best fund by Beta value - UTI infra (0.97)

Best fund by

value - Sahara infra (0.92)

In Infrastructure sector, UTI infra fund seems to be good.

POWER SECTOR FUNDS:

Highest return for 2015-2016 Reliance diversified power (76.92%)

Highest return for 2014-2015 - Reliance diversified power (30.59%)

Highest return for 2013-2014 - Reliance diversified power (40.45%)

Best fund by standard deviation value - ICICI prudential power (33.13)

Best fund by Sharpes ratio value - Reliance diversified power (0.79)

Best fund by Beta value - ICICI prudential power (0.91)

Best fund by

value - Reliance diversified power (0.91)

In Power sector, Reliance diversified power fund seems to be good.


BANKING SECTOR FUNDS:

Highest return for 2015-2016 Reliance banking (96.56%)

Highest return for 2014-2015 - Reliance banking (30.65%)

Highest return for 2013-2014 - Reliance banking (26.27%)

Best fund by standard deviation value - Reliance banking (40.17)

Best fund by Sharpes ratio value - Reliance banking (0.73)

Best fund by Beta value - Reliance banking (0.81)

Best fund by

R2 value - Reliance banking (0.95)

In Banking sector, Reliance banking fund seems to be good.

SERVICE SECTOR FUNDS:

Highest return for 2015-2016 Tata service (102.26%)

Highest return for 2014-2015 Principal service (7.59%)

Highest return for 2013-2014 - Tata service (19.38%)

Best fund by standard deviation value - Principal service (33.78)

Best fund by Sharpes ratio value - Tata and Principal service (0.25)

Best fund by Beta value - Principal service (0.90)

Best fund by

value - Tata service (0.86)

In Service sector, Tata service fund seems to be good.


FMCG SECTOR FUNDS:

Highest return for 2015-2016 SBI magnum fmcg (87.55%)

Highest return for 2014-2015 SBI magnum fmcg (19.83%)

Highest return for 2013-2014 ICICI prudential fmcg (23.46%)

Best fund by standard deviation value Franklin Templeton fmcg (20.97)

Best fund by Sharpes ratio value - SBI magnum fmcg (0.59)

Best fund by Beta value - SBI magnum and Franklin Templeton fmcg (0.78)

Best fund by

R2 value - SBI magnum fmcg (0.57)

In FMCG sector, SBI magnum fmcg fund seems to be good.

IT SECTOR FUNDS:

Highest return for 2015-2016 SBI magnum IT (160.10%)

Highest return for 2014-2015 Franklin Templeton IT (2.15%)

Highest return for 2013-2014 SBI magnum IT (17.55%)

Best fund by standard deviation value Franklin Templeton IT (33.68)

Best fund by Sharpes ratio value - Franklin Templeton IT (0.06)

Best fund by Beta value - ICICI prudential IT (0.81)

5.2 SUGGESSTIONS
Following are the suggestions for the selected funds in the selected sectors:

In pharma sector franklin templeton pharma seems to be good only by the beta value
but in case of return it does not seems to be good so that franklin templeton pharma
should concentrate on increasing its return to the investors.

In case of infra structure sector birla sunlife infra has performed well for 20152016and in future it may be the best fund for the investors.

In service sector both tata and principal service has performed well in all parameter
against other funds.

In Banking Sector Reliance was only fund which qualified but it was not good
performer in all parameters.

The fund house has to reduce the total risk involved in the fund in order to increase
the return with good portfolio construction.

Karvy should keep Mutual Fund Awareness Programmes on regular basis for
investors and clients as future belongs to mutual fund in India specially Sectoral
Mutual Funds.

5.3 CONCLUSION

Good Performers:
Following 6 funds have scored well on all parameters,
Reliance pharma
SBI magnum IT
SBI fmcg
Franklin Templeton fmcg
Reliance diversified power
Tata service
Both Reliance and SBI has performed well in all sectors.
Non Performers:
The funds which can be identified as non performing on the basis of the parameters
considered in the study are: Principal service
UTI infra
ICICI fmcg
Franklin Templeton IT

The conclusion made to the study is that both good and non performing funds are available
in the trade, so the investor has to make decision on the investment by taking highest risk for
highest return under the guidance of financial service companies.
NOTE:
The data mentioned above shows that the fund houses are classified as good performer and
non performer based on the performance of its funds and it confirmed only for the particular
period of study.

BIBLIOGRAPHY

Websites:
www.mutualfundsindia.com
www.valueresearchonline.com
www.moneycontrol.com
www.the-finapolis.com
Journals & Other References:
The Economic Times
Business Standard
Security analysis and portfolio management work book
Fact sheet and statements of various fund houses.