Performance Comparison of Different Mutual Funds

ii shree ii
2010 2010
Performance
Comparison of
Different Mutual
Funds
Summer Internship Programme

At
ESCORTS SECURITIES LIMITED

11, SC India House, K.G. Marg, Connaught Place,
NEW DELHI - 110001
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Accman Institute of Management
SUMMER INTERNSHIP REPORT
On
PERFORMANCE COMPARISON OF
DIFFERENT MUTUAL FUNDS
At
SUBMITTED BY:
SATYENDRA SINGHAL
(Accman Institute of Management, Greater Noida,
U.P.)
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Certificate of Authenticity
This is certify that the project work was done on “Performance
Comparison of Different Mutual Funds” submitted to Accman
Institute of Management, Greater Noida is in partial fulfillment
the requirement for the award of Post Graduate diploma in
Management, is a bonafide `work carried out by me at ‘Escorts
Securities Limited’ at Connaught Place in New Delhi. I declare
that the form and the content of the above mentioned project are
original and have not been submitted in part or full, for any other
degree or diploma of this or any other Organization/ Institute/
University.
Place: New Delhi

(Satyendra Singhal)
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Date: 30th June 2010
Signature
Certificate of Approval of
Organization
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PREFACE:
 A Mutual Fund is nothing more than a collection of stocks and/or
bonds. Mutual fund as a company that brings together a group of

people and invests their money in stocks, bonds, and other
securities. Each investor owns shares, which represent a portion of
the holdings of the fund.
 The mutual fund industry in India started in 1963 with the
formation of Unit Trust of India, at the initiative of the Government of

India and Reserve Bank of India.
 It is registered with SEBI and functions under the Mutual Fund
Regulations.
 Conforming to the SEBI Mutual Fund Regulations, and with recent
mergers taking place among different private sector funds, the

mutual fund industry has entered its current phase of consolidation
and growth.
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ACKNOWLEDGEMENT
With great pleasure, we express our sincere thanks to our project

guide, Mr. Jagveer Singh Fauzdar, Designation- Fund Manager
(Equity), Escorts Securities Limited, for guiding us right form the
inception till the successful completion of the project. We also thankful to
Mr. Manuj Jain for guiding us. We sincerely acknowledge them for
extending their valuable guidance, support for literature, critical reviews of
project and the report and above all the moral support they had provided
to us with all stages of this project.
We express our heartiest thanks to Prof. Mr. A. K. Paul & Prof.

Preetanjan Kaur for giving us an opportunity to work under their
guidance. They gave us the guidelines that helped us a lot in the
preparation of our Project Report.
We express our sincere gratitude to our friends and all others who have
directly or indirectly inspired and helped us to complete our project with
unremitting zeal and enthusiasm.
Thank You………..
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Yours Truly:-
• KARAN ARORA
• SATYENDRA
SINGHAL
EXECUTIVE SUMMARY
• 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.
• Portfolio Managers evaluate their portfolio performance and identify the

sources of strength and weakness. The evaluation of the portfolio provides
a feed back about the performance to evolve a better management
strategy. Even through evaluation of portfolio performance is considered to
be the last stage of investment process, the managed portfolios are
commonly known as mutual funds. Various managed portfolios are
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prevalent in the capital market. Their relative merits of return and risk
criteria have to be evaluated.
• Sharpe’s 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 portfolio’s
average rate of return and risk less rate of return. The standard deviation
of the portfolio indicates the risk. The index assigns the highest values to
assets that have best risk-adjusted average rate of return. The Sharpe ratio
provides me with a return for unit of the risk measure
TABLE OF CONTENTS
Serial No. Particular Page
No.
1.0 Introductory Page:- 5-7
1.1 Preface 5
1. 1.2 Acknowledgement 6
1.3 Executive Summary 7
2.0 Concept of Mutual Funds:- 11-38
2.1 History of Mutual Funds 12-15
2.2 Understanding of Mutual Funds 16-23
2.3 Mutual Funds in India 23-24
2.
2.4 Various Kinds of Mutual Funds 24-38
3.0 Industry Overview:- 39-50
3.1 Indian Stock & Investment Market 39
3. 3.2 Bombay Stock Exchange (BSE) 40-45
3.3 National Stock Exchange (NSE) 46-50
4.0 Company Overview: 51-70
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4.1 Escorts Group: History 52
4.2 Leadership Team & Fact Sheet & Products 53-55
4.3 Escorts Securities Limited: About Us 56-57
4.4 Key Personnel 58
4.
4.5 Escorts Products 59-69
4.6 List of Mutual Fund Schemes 70

5.0 Research Methodology 71-73
5.1 Objective 71
5. 5.2 Data Collection 72
5.3 Techniques Used 73
5.4 Scope & Limitations 73
6.0 Analysis & Interpretations:- 74-113

6.1 Performance Comparison Techniques 74-77
6.2 Sharpe Performance Index Model 77-80
6.3 Performance Evaluation of Different Mutual Funds 81-112
6. 6.3.1 Birla Sunlife Mutual Funds 832-86
6.3.2 Kotak Mahindra Mutual Funds 87-91
6.3.3 Escorts Mutual Funds 92-102
6.3.4 ICICI Prudential Mutual Funds 103-107
6.3.5 Reliance Mutual Funds 108-112
7. 7.0 Findings, Suggestions/ 113-114

Recommendations and Conclusion
7.1 Findings 113
7.2 Suggestions / Recommendations 114
7.3 Conclusions 114
8. 8.0 Bibliography 115
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Table of Figures
Serial Figure Particular Page No.
No. No.
1. 2.1 Mutual Funds Operations 11
2. 2.2 Working of Mutual Funds 11
3. 2.3 Growth In Assets Under Management (AUM) 15
4. 2.4 Understanding of Mutual Munds 16
5. 2.5 Risk & Return Matrix 19
Table of Tables
Serial Table Particular Page No.
No. No.
1. 2.1 Amount Mobilized in Mutual Funds 13
2. 2.2 Gross Fund Mobilization & AUM 14-15
3. 4.1 & 4.2 Shareholding Pattern of Escorts Limited 54
4. 4.3 Escorts Power & Energy Fund 59
5. 4.4 Escorts Opportunities Fund 60
6. 4.5 Escorts Balanced Fund 61
7. 4.6 Escorts Income Plan 62
8. 4.7 Escorts Tax Plan 63
9. 4.8 Escorts Growth Plan 63
10. 4.9 Escorts Gilt Plan 64
11. 4.10 Escorts Liquid Plan 65
12. 4.11 Escorts Leading Sectors Fund 66
13. 4.12 Escorts Income Bond 67
14. 4.13 Escorts High Yield Equity Plan 68
15. 4.14 Escorts Floating Rate Fund 69
Concept of Mutual Fund
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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:
Mutual
Fund
Operation
Flow Chart
Figure: 2.1
Working of
Mutual
Fund
Figure:2.2
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History of Mutual Funds (Evolution: Mutual Funds Industry in
India)
The formation of Unit Trust of India marked the evolution of the Indian mutual
fund industry in the year 1963. The primary objective at that time was to attract
the small investors and it was made possible through the collective efforts of the
Government of India and the Reserve Bank of India. The history of mutual fund
industry in India can be better understood divided into following phases:
• Phase 1 Establishment and Growth of Unit Trust of India -

1964-87
Unit Trust of India enjoyed complete monopoly when it was established in the
year 1963 by an act of Parliament. UTI was set up by the Reserve Bank of India
and it continued to operate under the regulatory control of the RBI until the two
were de-linked in 1978 and the entire control was transferred in the hands of
Industrial Development Bank of India (IDBI). UTI launched its first scheme in
1964, named as Unit Scheme 1964 (US-64), which attracted the largest number
of investors in any single investment scheme over the years.
UTI launched more innovative schemes in 1970s and 80s to suit the needs of
different investors. It launched ULIP in 1971, six more schemes between 1981-
1984, Children's Gift Growth Fund and India Fund (India's first offshore fund) in
1986, Master share (India's first equity diversified scheme) in 1987 and Monthly
Income Schemes (offering assured returns) during 1990s. By the end of 1987,
UTI's assets under management grew ten times to Rs 6700 crores.
• Phase II. Entry of Public Sector Funds - 1987-1993
The Indian mutual fund industry witnessed a number of public sector players
entering the market in the year 1987. In November 1987, SBI Mutual Fund from
the State Bank of India became the first non-UTI mutual fund in India. SBI Mutual
Fund was later followed by Can bank Mutual Fund, LIC Mutual Fund, Indian Bank
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Mutual Fund, Bank of India Mutual Fund, GIC Mutual Fund and PNB Mutual Fund.
By 1993, the assets under management of the industry increased seven times to
Rs. 47,004 crores. However, UTI remained to be the leader with about 80%
market share.
Mobilization as
Amount Assets Under % of gross
1992-93
Mobilized Management Domestic
Savings
UTI 11,057 38,247 5.2%
Public Sector 1,964 8,757 0.9%
Total 13,021 47,004 6.1%
Table: 2.1
• Phase III. Emergence of Private Sector Funds - 1993-96
The permission given to private sector funds including foreign fund management
companies (most of them entering through joint ventures with Indian promoters)
to enter the mutual fund industry in 1993, provided a wide range of choice to
investors and more competition in the industry. Private funds introduced
innovative products, investment techniques and investor-servicing technology.
By 1994-95, about 11 private sector funds had launched their schemes.
• Phase IV. Growth and SEBI Regulation - 1996-2004
The mutual fund industry witnessed robust growth and stricter regulation from
the SEBI after the year 1996. The mobilization of funds and the number of players
operating in the industry reached new heights as investors started showing more
interest in mutual funds.
Inventors' interests were safeguarded by SEBI and the Government offered tax
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benefits to the investors in order to encourage them. SEBI (Mutual Funds)
Regulations, 1996 was introduced by SEBI that set uniform standards for all
mutual funds in India. The Union Budget in 1999 exempted all dividend incomes
in the hands of investors from income tax. Various Investor Awareness
Programmes were launched during this phase, both by SEBI and AMFI, with an
objective to educate investors and make them informed about the mutual fund
industry.
In February 2003, the UTI Act was repealed and UTI was stripped of its Special
legal status as a trust formed by an Act of Parliament. The primary objective
behind this was to bring all mutual fund players on the same level. UTI was re-
organized into two parts:
1. The Specified Undertaking,
2. The UTI Mutual Fund
Presently Unit Trust of India operates under the name of UTI Mutual Fund and its
past schemes (like US-64, Assured Return Schemes) are being gradually wound
up. However, UTI Mutual Fund is still the largest player in the industry. In 1999,
there was a significant growth in mobilization of funds from investors and assets
under management which is supported by the following data:
Table: 2.2
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GROSS FUND MOBILISATION (RS. CRORES)
ASSETS UNDER MANAGEMENT (RS. CRORES)

PUBLIC PRIVATE
FROM TO UTI TOTAL
SECTOR SECTOR
AS ON UTI PUBLIC PRIVATE SECTOR TOTA
SECTOR L
31- 11,67
01-April-98 1,732 7,966 21,377
March-99 9
31-March-99 53,320 8,292 6,860 68,47
2
31- 13,53
01-April-99 4,039 42,173 59,748
March-00 6
31- 12,41
01-April-00 6,192 74,352 92,957
March-01 3
31-
01-April-01 4,643 13,613 1,46,267 1,64,523
March-02
31-Jan-
01-April-02 5,505 22,923 2,20,551 2,48,979
03
31-
01-Feb.-03 * 7,259* 58,435 65,694
March-03
31-
01-April-03 - 68,558 5,21,632 5,90,190
March-04
31-
01-April-04 - 1,03,246 7,36,416 8,39,662
March-05
31-
01-April-05 - 1,83,446 9,14,712 10,98,158
March-06
Phase V. Growth and Consolidation - 2004 Onwards

The industry has also witnessed several mergers and acquisitions recently,
examples of which are acquisition of schemes of Alliance Mutual Fund by Birla
Sun Life, Sun F&C Mutual Fund and PNB Mutual Fund by Principal Mutual Fund.
Simultaneously, more international mutual fund players have entered India like
Fidelity, Franklin Templeton Mutual Fund etc. There were 29 funds as at the end
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of March 2006. This is a continuing phase of growth of the industry through
consolidation and entry of new international and private sector players.
Figure: 2.3
UNDERSTANDING MUTUAL FUND

Mutual fund is a trust that pools money from a group of investors (sharing
common financial goals) and invest the money thus collected into asset classes
that match the stated investment objectives of the scheme. Since the stated
investment objectives of a mutual fund scheme generally form the basis for an
investor's decision to contribute money to the pool, a mutual fund can not
deviate from its stated objectives at any point of time. Every Mutual Fund is
managed by a fund manager, who using his investment management skills and
necessary research works ensures much better return than what an investor can
manage on his own. The capital appreciation and other incomes earned from
these investments are passed on to the investors (also known as unit holders) in
proportion of the number of units they own.
Concept of Mutual Funds
Many Investors with common financial

objectives pool their money
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Investors, on a proportionate basis, get
mutual fund units for the sum contributed to
the pool
The money collected from investors is invested

into shares, debentures and the other
securities by the fund manager
The fund manager realize gains or losses, and

collects dividend or interest income
Any capital gains or losses from such

investment are passed on to the investors in
proportion of the number of units held by
them
Figure:2.4
When an investor subscribes for the units of a mutual fund, he becomes part
owner of the assets of the fund in the same proportion as his contribution amount
put up with the corpus (the total amount of the fund). Mutual Fund investor is
also known as a mutual fund shareholder or a unit holder.
Any change in the value of the investments made into capital market instruments
(such as shares, debentures etc.) is reflected in the Net Asset Value (NAV) of
the scheme. NAV is defined as the market value of the Mutual Fund scheme's
assets net of its liabilities. NAV of a scheme is calculated by dividing the market
value of scheme's assets by the total number of units issued to the investors.
For example:
A. If the market value of the assets of a fund is Rs. 100,000

B. The total number of units issued to the investors is equal to 10,000.
C. Then the NAV of this scheme = (A)/(B), i.e. 100,000/10,000 or 10.00
D. Now if an investor 'X' owns 5 units of this scheme
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E. Then his total contribution to the fund is Rs. 50 (i.e. Number of units held
multiplied by the NAV of the scheme)
DIVERSIFICATION
Diversification is nothing but spreading out your money across available or

different types of investments. By choosing to diversify respective investment
holdings reduces risk tremendously up to certain extent.
The most basic level of diversification is to buy multiple stocks rather than just
one stock. Mutual funds are set up to buy many stocks. Beyond that, you can
diversify even more by purchasing different kinds of stocks, then adding bonds,
then international, and so on. It could take you weeks to buy all these
investments, but if you purchased a few mutual funds you could be done in a few
hours because mutual funds automatically diversify in a predetermined category
of investments (i.e. - growth companies, emerging or mid size companies, low-
grade corporate bonds, etc.)
TYPES OF RETURN
There are three ways, where the total returns provided by mutual funds can be
enjoyed by investors:
1. 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.
2. 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.
3. 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.
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UNDERSTANDING AND MANAGING RISK
All investments whether in shares, debentures or deposits involve risk: share

value may go down depending upon the performance of the company, the
industry, state of capital markets and the economy; generally, however, longer
the term, lesser the risk; companies may default in payment of interest/principal
on their debentures/bonds/deposits; the rate of interest on an investment may
fall short of the rate of inflation reducing the purchasing power.
While risk cannot be eliminated, skillful management can minimize risk. Mutual
Funds help to reduce risk through diversification and professional management.
The experience and expertise of Mutual Fund managers in selecting
fundamentally sound securities and timing their purchases and sales help them
to build a diversified portfolio that minimize risk and maximizes returns.
The risk return trade-off indicates that if investor is willing to take higher risk
then correspondingly he can expect higher returns and vise versa if he pertains
to lower risk instruments, which would be satisfied by lower returns. For
example, if an investors opt for bank FD, which provide moderate return with
minimal risk. But as he moves ahead to invest in capital protected funds and the
profit-bonds that give out more return which is slightly higher as compared to the
bank deposits but the risk involved also increases in the same proportion.
Thus investors choose mutual funds as their primary means of investing, as

Mutual funds provide professional management, diversification, convenience and
liquidity. That doesn’t mean mutual fund investments risk free. This is because
the money that is pooled in are not invested only in debts funds which are less
riskier but are also invested in the stock markets which involves a higher risk but
can expect higher returns. Hedge fund involves a very high risk since It is mostly
traded in the derivatives market which is considered very volatile.
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Figure: 2.5
INDICATORS OF INVESTMENT RISK
There are five main indicators of investment risk that apply to the analysis of
stocks, bonds and mutual fund portfolios. They are alpha, beta, r-squared,
standard deviation and the Sharpe ratio. These statistical measures are
historical predictors of investment risk/volatility and are all major components
of modern portfolio theory (MPT). The MPT is a standard financial and academic
methodology used for assessing the performance of equity, fixed-income and
mutual fund investments by comparing them to market benchmarks.
All of these risk measurements are intended to help investors determine the risk-
reward parameters of their investments. In this article, we'll give a brief
explanation of each of these commonly used indicators.
1. Alpha
Alpha is a measure of an investment's performance on a risk-adjusted basis. It

takes the volatility (price risk) of a security or fund portfolio and compares its
risk-adjusted performance to a benchmark index. The excess return of the
investment relative to the return of the benchmark index is its "alpha".
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Simply stated, alpha is often considered to represent the value that a portfolio
manager adds or subtracts from a fund portfolio's return. A positive alpha of 1.0
means the fund has outperformed its benchmark index by 1%. Correspondingly,
a similar negative alpha would indicate an underperformance of 1%. For
investors, the more positive an alpha is, the better it is.
2. Beta
Beta, also known as the "beta coefficient," is a measure of the volatility,

or systematic risk, of a security or a portfolio in comparison to the market as a
whole. Beta is calculated using regression analysis, and you can think of it as the
tendency of an investment's return to respond to swings in the market. By
definition, the market has a beta of 1.0. Individual security and portfolio values
are measured according to how they deviate from the market.
A beta of 1.0 indicates that the investment's price will move in lock-step with the
market. A beta of less than 1.0 indicates that the investment will be less volatile
than the market, and, correspondingly, a beta of more than 1.0 indicates that the
investment's price will be more volatile than the market. For example, if a fund
portfolio's beta is 1.2, it's theoretically 20% more volatile than the market.
Conservative investors looking to preserve capital should focus on securities and
fund portfolios with low betas, whereas those investors willing to take on more
risk in search of higher returns should look for high beta investments.
3. R-Squared
R- Squared is a statistical measure that represents the percentage of a fund

portfolio's or security's movements that can be explained by movements in a
benchmark index. For fixed-income securities and their corresponding mutual
funds, the benchmark is the U.S. Treasury Bill and, likewise with equities and
equity funds, the benchmark is the S&P 500 Index. R-squared values range from
0 to 100. According to Morningstar, a mutual fund with an R-squared
value between 85 and 100 has a performance record that is closely correlated to
the index. A fund rated 70 or less would not perform like the index. Mutual fund
investors should avoid actively managed funds with high R-squared ratios, which
are generally criticized by analysts as being "closet" index funds.
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4. Standard Deviation
Standard deviation measures the dispersion of data from its mean. In plain
English, the more that data is spread apart, the higher the difference is from the
norm. In finance, standard deviation is applied to the annual rate of return of an
investment to measure its volatility (risk). A volatile stock would have a high
standard deviation. With mutual funds, the standard deviation tells us how much
the return on a fund is deviating from the expected returns based on its historical
performance.
5. Sharpe Ratio
Developed by Nobel laureate economist William Sharpe, this ratio measures risk-
adjusted performance. It is calculated by subtracting the risk-free rate of
return (U.S. Treasury Bond) from the rate of return for an investment and dividing
the result by the investment's standard deviation of its return.
The Sharpe ratio tells investors whether an investment's returns are due to smart
investment decisions or the result of excess risk. This measurement is very useful
because although one portfolio or security can reap higher returns than its peers,
it is only a good investment if those higher returns do not come with too much
additional risk. The greater an investment's Sharpe ratio, the better its risk-
adjusted performance.
ADVANTAGES OF MUTUAL FUND

1. Portfolio Diversification: Mutual Funds invest in a well-diversified
portfolio of securities which enables investor to hold a diversified
investment portfolio (whether the amount of investment is big or small).
2. Professional Management: Fund manager undergoes through various

research works and has better investment management skills which ensure
higher returns to the investor than what he can manage on his own.
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3. Less Risk: Investors acquire a diversified portfolio of securities even with a
small investment in a Mutual Fund. The risk in a diversified portfolio is
lesser than investing in merely 2 or 3 securities
4. Low Transaction Costs: Due to the economies of scale (benefits of larger

volumes), mutual funds pay lesser transaction costs. These benefits are
passed on to the investors.
5. Liquidity: An investor may not be able to sell some of the shares held by
him very easily and quickly, whereas units of a mutual fund are far more
liquid.
6. Choice of Schemes: Mutual funds provide investors with various schemes

with different investment objectives. Investors have the option of investing
in a scheme having a correlation between its investment objectives and
their own financial goals. These schemes further have different
plans/options.
7. Transparency & Flexibility:: Funds provide investors with updated

information pertaining to the markets and the schemes. All material facts
are disclosed to investors as required by the regulator.
DISADVANTAGES OF MUTUAL FUND
1. Costs Control Not in the Hands of an Investor: Investor has to pay

investment management fees and fund distribution costs as a percentage
of the value of his investments (as long as he holds the units), irrespective
of the performance of the fund.
2. No Customized Portfolios: The portfolio of securities in which a fund

invests is a decision taken by the fund manager. Investors have no right to
interfere in the decision making process of a fund manager, which some
investors find as a constraint in achieving their financial objectives.
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3. Difficulty in Selecting a Suitable Fund Scheme: Many investors find it
difficult to select one option from the plethora of funds/schemes/plans
available.
REGULATORY AUTHORITIES
To protect the interest of the investors, SEBI formulates policies and regulates
the mutual funds. It notified regulations in 1993 (fully revised in 1996) and issues
guidelines from time to time. MF either promoted by public or by private sector
entities including one promoted by foreign entities is governed by these
Regulations. SEBI approved Asset Management Company (AMC) manages the
funds by making investments in various types of securities. Custodian, registered
with SEBI, holds the securities of various schemes of the fund in its custody.
According to SEBI Regulations, two thirds of the directors of Trustee Company or

board of trustees must be independent. The Association of Mutual Funds in India
(AMFI) reassures the investors in units of mutual funds that the mutual funds
function within the strict regulatory framework. Its objective is to increase public
awareness of the mutual fund industry. AMFI also is engaged in upgrading
professional standards and in promoting best industry practices in diverse areas
such as valuation, disclosure, transparency etc.
MUTUAL FUNDS IN INDIA
1) ABN AMRO Mutual Fund

2) Benchmark Mutual Fund
3) Birla Sun Life Mutual Fund
4) Bharti AXA Mutual Fund
5) BOB Mutual Fund
6) Canara Robero Mutual Fund
7) DBS Chola Mutual Fund
8) Deutsche Mutual Fund
9) DSP BlackRock Mutual Fund
10) Escorts Mutual Fund
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11) Fidelity Mutual Fund
12) Fortis ( ABN ) Mutual Fund
13) Franklin Templeton Mutual Fund
14) HDFC Mutual Fund
15) HSBC Mutual Fund
16) ING Vysya Mutual Fund
17) JM Financial Mutual Fund
18) Kotak Mahindra Mutual Fund
19) LIC Mutual Fund
20) Principal Mutual Fund
21) ICICI Prudential Mutual Fund
22) Reliance Mutual Fund
23) Sahara Mutual Fund
24) SBI Mutual Fund
25) Standard Chartered Mutual Fund
26) Sundaram Mutual Fund
27) Tata Mutual Fund
28) Taurus Mutual Fund
29) UTI Mutual Fund
Various kinds of Mutual funds in India

Classification of Mutual Funds in India has been done on the basis of their
investment objective and structure. Classification of Mutual Funds in India has be
done into main types such as Income Funds, Sector- Specific Funds, Large Cap
Funds, Fixed- Income Funds, Interval Funds, Closed- End Funds, and Tax Saving
Funds. Income Funds in India are a kind of mutual fund whose aim is to provide to
the investors with steady and regular income. They usually invest their principal
in securities such as corporate debentures, bonds, and government securities.
Sector- Specific Funds in India are funds that make investments in specified
sectors only. They give importance to one sector only such as pharmaceuticals,
software, infrastructure, and health care. Large Cap Funds in India are a kind of
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mutual fund that makes investment in the shares of large blue chip companies.
Fixed- Income Funds in India makes investment in debt securities that have been
issued either by the banks, government, or companies. They are also known as
income funds and debt funds.
• Interval Funds • Income Funds
• Tax Saving Funds • Sector-Specific Funds
• Fixed-Income Funds • Closed-End Funds
• Open-End Funds • Large Cap Funds
• Mid-Cap Funds • Equity Funds
• Balanced Funds • Growth Funds
• No Load Funds • Exchange Traded Funds
• Value Funds • Money Market Funds
• International Mutual Funds • Regional Mutual Funds
• Sector Funds • Index Funds
• Fund of Funds
Open- End Funds
Abstract:
Open- End Funds in India is a kind of mutual fund that can be sold and
purchased all through out the year. Open- End Funds in India have no fixed date
of maturity. The investors buy and sell Open- End Funds in India at related prices
of Net Asset Value (NAV).
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An overview of Open- End Funds in India:
Open- End Funds in India is such that the investors can sell as well as buy all
through out the year. The investors sell and buy units of Open- End Funds in India
at the related prices of Net Asset Value (NAV) each day. An investor can buy
Open- End Funds in India either from a brokerage house or through the mutual
fund company. Open- End Funds in India have no fixed date of maturity. The
main advantage of Open- End Funds in India is that it offers liquidity to the
investors for they can sell the units whenever they need the money.
Major Open- End Funds in India are:
• UTI Gold Exchange Traded Fund

• Standard Chartered Premier Equity Fund
• Sahara Mid- Cap Fund
• Lotus India Tax Plan
• Reliance Tax Saver (ELSS) Fund
• Canara Robeco Equity Tax Saver- 93
• DSP Merrill Lynch Tax Saver Fund
• Tata Life Sciences and Technology Fund
• JM Arbitrage Advantage Fund
• Kotak Gold ETF
Closed- End Funds
Closed- End Funds in India have a specified period of maturity which varies
between three to fifteen years. The investors can make investments in Closed-
End Funds in India during the period of public offer or they have to buy the units
of the funds from the stock exchanges.
Closed- End Funds in India:

Closed- End Funds in India have a fixed period of maturity which can vary
between three to fifteen years. Closed- End Funds in India can be subscribed to
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only during the period of time that has been specified. Investors can make
investments in Closed- End Funds in India either during the period of public offer
or buy the funds from the stock exchanges.
Major Closed- End Funds in India are:
• UTI Wealth Builder

• HDFC Long-Term Equity
• Standard Chartered Enterprise Equity
• Franklin India Smaller Companies
• Birla Long-Term Advantage
• Tata Capital Builder
• ING Vysya C.U.B.
• Prudential ICICI Fusion
• Tata Equity Management
• Equity funds
Equity funds or also called stock mutual funds are a special type of mutual fund
wherein, the corpus accumulated through this fund is invested in stocks of public
companies. The operation of the Equity Funds is regulated by the Association of
the Mutual Funds of India (AMFI).
With the opening up of the Indian economy post 1990s witnessed tremendous
rise of the Indian financial sector, especially the capital market. The Ministry of
Finance Government of India played an important role in the substantial growth
of the Indian financial market. The regulatory of the capital markets of India
were made more transparent and accountable in dealing with capital market
transactions.
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Definition and features of the Equity Funds:
Equity funds also known as stock mutual funds are a special type of mutual
fund wherein, the corpus accumulated through this fund is invested in stocks of
public companies. Holding of stocks or equity in a company means having part
ownership or equity in that particular company. The main objective of holding
stocks of a company is to reap profit on investment in such stocks after the
company makes a profit in its business.
These stocks are generally classified as small, medium, and large sized stocks,
which is further defined according to their individual market capitalization. The
equity managers are trained professionals who format and pick stocks for
investments. The formation of equity portfolios are generally made either by
applying value-approach or by growth-approach. In the value-approach method
the stocks with lesser value than its competitors are picked and in the growth-
approach method the stocks with higher growth opportunity than its competitors
or markets are picked for investments. In another type of approach, both the
value and growth based stocks are picked for investments.
Equity funds are considered to be the more risky funds as compared to other
fund types, but they also provide higher returns than other funds. It is advisable
that an investor looking to invest in an equity fund should invest for long term i.e.
for 3 years or more.
• Debt / Income Funds
Funds that invest in medium to long-term debt instruments issued by private

companies, banks, financial institutions, governments and other entities
belonging to various sectors (like infrastructure companies etc.) are known as
Debt / Income Funds. Debt funds are low risk profile funds that seek to generate
fixed current income (and not capital appreciation) to investors. In order to
ensure regular income to investors, debt (or income) funds distribute large
fraction of their surplus to investors. Although debt securities are generally less
30 | P a g e
risky than equities, they are subject to credit risk (risk of default) by the issuer at
the time of interest or principal payment. To minimize the risk of default, debt
funds usually invest in securities from issuers who are rated by credit rating
agencies and are considered to be of "Investment Grade". Debt funds that target
high returns are more risky Some Debt Funds are:
• Diversified Debt Funds –

• Focused Debt Funds – 1. High Yield Debt funds
2. Assured Return Funds
3. Fixed Term Plan Series.
Large Cap Funds
Abstract:
Large Cap Funds in India are a kind of mutual fund which makes investments
mainly in the shares of big companies. The investors prefer to make investments
in Large Cap Funds in India for they are considered to have lower levels of risks
and this ensures that their money is safe.
A glance at Large Cap Funds in India:

Large Cap Funds in India are a kind of mutual fund that looks for appreciation of
capital by investing mainly in the shares of companies that are big blue chip. The
big blue chip companies in which Large Cap Funds in India make their
investments have above- average potential for growth in earnings. The large cap
companies in which Large Cap Funds in India makes investments are usually
companies that have a market capitalization that is more than Rs. 1000 crores.
The main advantage of Large Cap Funds in India is that they are considered to be
of low return and low risk category. This ensures that the investments of the
investors are relatively safe.
Major Large Cap Funds in India are:
• Franklin India Blue Chip
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• DSPML Top 100 Equity
• HDFC Top 200
• Principal Large Cap Fund
• Reliance Growth Fund
• Kotak 30
• UTI Large Cap Fund
Interval Funds
Abstract:
Interval Funds in India combine the characteristics of both close and open ended
funds. Interval Funds in India offer flexibility to the investors for they can be
repurchased and sold at a time period that is predetermined. Interval Funds in
India have been launched by many fund houses.
Meaning of Interval Funds in India:

Interval Funds in India combine the characteristics of both the close ended funds
and open ended funds. This means that Interval Funds in India can be
repurchased and sold at the time that has been predetermined. Interval Funds in
India are usually repurchased every six or twelve months or as has been unveiled
in the annual report and prospectus of the fund. Interval Funds in India are sold
and repurchased at the prices that are related to the Net Asset Value (NAV).
Advantages of Interval Funds in India:

The advantage of Interval Funds in India is that it allows the investor more
flexibility than the close ended funds for he can sell it at the predetermined time.
Further the advantage of Interval Funds in India is that it ensures that the
investor has liquidity of capital at regular intervals of time.
Mutual Fund companies that have launched Interval Funds in India

are:
• Birla Sun Life Mutual Fund

• Prudential ICICI Mutual Fund
• ABN-AMRO Mutual Fund
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Tax Saving Funds
Abstract:
Tax Saving Funds in India are also known as equity-linked savings schemes. Tax
Saving Funds in India provide tax rebates under Section 88 of the Income Tax
Act. They are beneficial for those investors who want to benefit from the rebates
that are given in taxes. .
Meaning of Tax Saving Funds in India:
Tax Saving Funds in India offer to the investors rebates in taxes under the
Income Tax Act, Section 88 and they are also known as equity-linked savings
schemes. Tax Saving Funds in India usually have a period of lock- which is
generally of three years. As a result of this, the manager of the fund is not
concerned about factors such as the pressures of redemption, performance of the
fund during a short time, and thus does his job by keeping in view the long term
goal.
Major Tax Saving Funds in India is:
• Franklin India Tax Shield

• HDFC Tax Saver
• Sundaram Tax Saver
• HDFC Long Term Advantage
• Prudential ICICI Tax Plan
• Birla Equity Plan
• UTI Equity Tax Savings
• Tata Tax Saving Fund
• Magnum Tax Gain
• Fixed- Income Funds
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Abstract:
Fixed- Income Funds in India are a kind of mutual fund which makes
investment in debt securities that have been issued either by the companies,
banks, or government. Fixed- Income Funds in India are also known as debt funds
and income funds.
A glance at Fixed- Income Funds in India:

Fixed- Income Funds in India are also known as debt funds or income
funds. Fixed- Income Funds in India make investments in debt securities that
have been issued either by the banks, government or companies. The debt
securities in which Fixed- Income Funds in India makes investments are also
known as commercial papers of deposit or treasury bills if the duration is less
than one year and in case the duration is more than one year then the debt
securities are known as bonds or debentures. The issuer of the debt securities
has the obligation to pay the interest and principal on the time schedule that has
been fixed.
Major fund houses that have launched Fixed- Income Funds in

India are:
• Sundaram BNP Paribas Mutual Fund

• Franklin Templeton India Mutual Fund
• Fidelity Fund Management
• Reliance Mutual Fund
Mid-Cap Funds
Mid-cap funds are a special type of mutual fund wherein, the corpus
accumulated is invested in small or medium sized companies. With the rise of
large caps the heavy weight investors like the mutual funds and Foreign
Institutional Investors are increasingly investing in mid cap funds.
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Definition and features of the Mid-Cap Funds:
Mid-cap funds are a special type of mutual fund wherein,

the corpus accumulated is invested in small or medium sized companies. In the
absence of any standardized definition or definite classification of small or
medium sized company, each mutual fund classifies small and medium sized
companies according to its own policies. In general, companies with a market
capitalization up to Rs 500 crores are regarded as small and companies with a
market capitalization over Rs 500 crores but below Rs 1,000 crores are defined as
medium sized by the mutual fund industry. Mid-cap funds bear high risk factors
and thus offer high returns in case of positive movements of the indexes.
Further, opportunity of investment in Mid-cap funds is high due to low
identification factor in the market. Another important feature of these Mid-Cap
Funds is that they tend to grow in size as more investors get involved.
The net effect is that, huge amount of money are invested against few stocks.
Experts are of the opinion that investments in Mid-Cap Funds should follow
investment patterns of sectorial funds and one should not focus only on these
funds alone. Further, investment in Mid-Cap Funds should have long term
perspective. With the rise of large caps the heavy weight investors like the
mutual funds and Foreign Institutional Investors are increasingly investing in mid
cap funds. However investment in Mid-cap funds should be undertaken with
caution since these tend to be volatile because of the high risk involved.
• Balanced Fund
Balanced funds also known as the hybrid funds wherein, the corpus
accumulated is invested in combination of common stock, preferred stock, bonds,
and short-term bonds. The balanced funds provide the investors with an
opportunity to invest in a single mutual fund that offers growth and income at the
same time.
The Balanced Funds came into being in the Indian Capital market after the
economic reforms effected during the early 1990s. The Indian financial market
35 | P a g e
got a major boost from the reforms. The mutual funds market in India also
experienced substantial expansion.
Definition and features of the Balanced Funds:
Balanced funds also known as the hybrid funds wherein, the corpus accumulated
is invested in combination of common stock, preferred stock, bonds and short-
term bonds. In other words, it is a combination of many stocks and bonds, which
is structured to strike a balance of income and capital appreciation.
This combination is essentially done to minimize the risk involved in such

investments. Thus, the balanced funds provide the investors with an opportunity
to invest in a single mutual fund that offers growth and income at the same time.
The stocks meet the growth requirements and the bonds meet the income
requirements. Further, this combination helps to negate any fall in the value of
the stocks in the financial market.
Sector Funds
Sector Funds invest in a single type of industry, or in other words, a single

sector. Sector funds can be highly profitable.
Definition and features of the Sector Funds:

The Sector Funds are those types of mutual funds which accumulate stocks of
particular sector.
In other words sector funds invest in a single type of industry, like Information
Technology, Telecommunication, Pharmaceuticals, Infrastructure, etc.
The Sector Funds are structured in this particular manner in order to take
advantage of growth of particular type of industry. The Sector Funds can offer
tremendous profit to the investor if the funds are carefully chosen. The
authorities to the Sector Funds in India are the Association of Mutual Funds of
India (AMFI), which operates in accordance with the laid down guidelines of the
36 | P a g e
Securities and Exchange Board of India (SEBI). Moreover, investments in Sector
Funds offer tax exemptions to the investors (Chapter III of the Income Tax Act,
1961). With the growth of the Indian industries the financial markets have
undergone tremendous transformation. The rise of different sectors has
necessitated structuring of sector specific funds to attract substantial amount of
money for the growth of a specific sector in India.
Fund of Funds
Fund of funds is a type of mutual fund in which investment is done in other

mutual funds. Fund of funds offer a diversified portfolio to the investors. A
mutual fund is a consortium of independent organizations that accumulates the
investments of investors, both institutional and individual having common
financial objectives. The corpus accumulated by such investment is invested in
capital market instruments. The capital market instruments in which such
investments are made are, shares, debentures and other types of securities.
The profit earned on such investments is shared by the unit holders in proportion
to the number of units owned by them. Mutual fund is one of the most popular
and suitable type of investment instrument for the common investors. The main
advantage of investing in mutual funds is that they are relatively low in price
and involves lower risk factor in comparison to other forms of financial market
investment instruments. Moreover, the Chapter III of the Income Tax Act, 1961
provides tax exemption on mutual fund investments.
Definition and features of the Fund of Funds:

Amongst the wide variety of mutual funds are available in India, fund of funds is a
type of mutual fund wherein, the corpus accumulated is invested in types of
other mutual funds. Further, the most significant feature of fund of funds is that it
holds shares of a variety of mutual funds. Furthermore, Funds of funds are
structured in such a way so as to attain a more diversified approach than what
the other types of mutual funds offer. Generally, the Fund of Funds costs higher
37 | P a g e
than any other type of mutual fund. This is due to the fact that the cost of Fund of
Funds involves part of the expense fees charged by the component funds.
Income Funds
Abstract:
Income Funds in India provide to the investors regular income and also stability
of capital. Income Funds in India usually invest their principal in securities of fixed
income such as government securities, bonds, and corporate debentures. There
are many mutual funds houses that have launched Income Funds in India.
Meaning of Income Funds in India: Income Funds in India usually invest

their principal in companies that give high payouts of dividends and also in
securities of fixed income such as corporate debentures, government securities,
and bonds. The advantage of Income Funds in India is that it provides regular
income to the investor either on a monthly or quarterly basis. Further the
advantage of Income Funds in India is that it also provides stability of capital to
the investor. Income Funds share prices are not fixed for they have a tendency to
grow with the fall in interest rates and fall with the rise of the interest rates. The
bonds that are there in Income Funds are usually of the investment grade. The
other bonds are of such credit quality that they assure the protection of the
capital.
Mutual fund companies that have launched Income Funds in India

are:
• Prudential ICICI Mutual Fund

• HDFC Mutual Fund
• Birla Sun Life Mutual Fund
• Franklin Templeton India Mutual Fund
• Tata Mutual Fund
• Growth Funds
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Growth Funds are special type of mutual funds, the objective of which is to
achieve capital appreciation by investing in growth stocks. The rise of the Growth
Funds in recent years can be attributed to the rise in value of growth stocks in
the Indian mutual fund market.
The Growth Funds became popular after the tremendous growth of the Indian
industries during the post reforms period. The rise of the Indian industries
attracted investor's money in sectors of high growth and this in turn again
propelled the growth of these Growth Funds.
Definition and features of the Growth Funds:
Growth Funds are special type of mutual funds, the objective of which is to
achieve capital appreciation by investing in growth stocks. Generally, the corpus
accumulated in the Growth Funds is invested in stocks of those companies, which
are registering prominent earnings or revenue growth. In other words, the growth
funds focus on the fastest-growing companies in the market. One of the
significant features of the Growth fund is that it offers tremendous growth, when
the financial market is bullish. Market trend shows that investments in these
growth funds are generally made by aggressive investors.
• Exchange Traded Funds
Definition and features of the Exchange Traded Funds

Exchange traded funds popularly also known as ETFs, is a type of mutual fund
wherein, the corpus is invested in a basket of securities, which is being traded on
an exchange. Further, an Exchange traded fund investments are being made
either on all the securities or on a sample of the representative securities that are
being traded in the said index. The exchange traded funds employ the process of
arbitration during trading, in order to keep its trading value in sync with the
values of the underlying stocks, which makes up the portfolio.
Exchange Traded Funds - advantages
One of the striking features of the Exchange Traded Funds is that they are
not volatile like other mutual funds and thus remain much more stable during
39 | P a g e
bearish market. Further, Exchange Traded Funds cost less and are transparent.
Furthermore, these funds can be traded and as well as diversified simultaneously
Money Market Funds

The Money market instruments that are being used to structure the money
market mutual funds are highly liquid debt instruments like the treasury bills.
The Association of the Mutual Funds of India (AMFI) and the Securities and
Exchange Board of India (SEBI) has been instrumental in introducing the wide
array of mutual funds in the Indian capital market. Individuals and companies
invest in mutual funds with the expectation of appreciation of the capital invested
in these companies. Mutual funds are of various types and are structured
according to the risk bearing factor of the investors.
Definition and features of the Money Market Funds:
Money Market Funds is a special type of mutual fund that invests in the
money market instruments only. The Money market instruments that are being
used to structure the money market mutual funds are highly liquid debt
instruments like the treasury bills. These Money market funds generally bear less
risk and are regarded as the safest type of mutual funds. The main objective of
investment in a money-market fund is to safeguard principal investment while
earning a modest return on such investments. In other words, investments in a
Money-market mutual fund are similar to a high-yield bank account with a decent
risk factor. Caution should be exercised with respect to the interest rate that is
being offered while investing in a money-market fund.
Regional Mutual Funds

The Regional Mutual Fund as the name suggests, is a special type of mutual
fund, wherein the investment is made in such funds that are confined to the
securities from a specified geographic region. The development of a particular
region for industrialization, especially for the setting up of Special Economic
Zones or Export Oriented Units necessitated huge inflow of funds and
subsequently structuring special funds to attract region specific investment.
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The rise of the Indian mutual fund market was recorded after the economic
reforms were undertaken by the government of India. The meteoritic rise of the
Indian capital market after the 1990s was the effect of shift of Indian market from
closed to open-market policy. The growth of the Indian Industry saw huge inflow
of funds, both from domestic private and foreign sources. This further propelled
the growth of the Indian infrastructure and real estate industry.
The development of particular region for industrialization, especially for the

setting up of Special Economic Zones or Export Oriented Units necessitated huge
inflow of funds and subsequently structuring special funds to attract region
specific investment. The Association of the Mutual Funds of India (AMFI) came up
with Regional Mutual Funds to fill the void of region specific funds. The Regional
Mutual Funds grew very popular along with the other types of mutual funds in the
recent years.
Definition and features of the Regional Mutual Funds:
The Regional Mutual Fund as the name suggests, is a special type of

mutual fund, wherein the investment made in such funds are confined to the
securities from a specified geography. In other words, the investments made in
the Regional Mutual Fund are dependent on the geographical origin of the fund.
The most important feature of this fund is that it invests in portfolio of companies
operating in a particular geographical area. The main objective of investing in the
Regional Mutual Funds is to take leverage of the geographical growth of that
particular area. These funds are created on regions which are supposed to
undergo tremendous modernization. The Regional Mutual Funds picks up
securities that are not confined to geographical criteria.
INDUSTRY PROFILE
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Indian Stock & Investment Market:-
The Indian Stock & Investment market divided into 2 parts, Namely the capital
market and the Money market. The stock market is an important part of the
capital market in the country which one can carry out the transaction of capital. It
is usually done through the means of direct financing through the use of security
and investment. The investment market can further be sub divided in to the
Primary and Secondary Market.
Features of the Primary Market:-

In case o the Primary Market, The listed shares are traded for the first time which
is transferred to the investors from the listed company. In case of the primary
market, the stock issuers and the listed companies make use of the capital by
offering the stocks to the investors. The investors, in turn, buy the shares and
supply the needed capital. In Simple terms, the primary market is a type of
platform where new securities and stocks are dealt with.
Primary Market can be an ideal source of funding for various business enterprises
and companies, Public sector units and government organizations. All of these
organizations can make the funding by selling new bonds, Stocks, and other form
of securities. The buying and selling of the securities are done through dealers.
The processes though which the new securities sold in the investors are referred
to as Underwriting. On the other hand, if any new stock is issued to the investor,
It is known as Initial Public Offering (IPO). In most cases the dealers who carry out
the process get a sum of money in the form of a commission. The terms and
condition of the commission are based on the price offering of the securities
Features of the Secondary Market:-

An Important part of the India Stock and investment market is the Secondary
Market. In Simple Terms, It is also known as the stock market. Mainly it is a type
of continues market which offers a very good platform for trading and business of
securities and stocks. In most cases the trading is done through a license broker,
Stock & Securities units, Security firms and other financial institutions. The
42 | P a g e
trading has to be done according to the terms and conditions that are set by the
specific stock exchange.
There are two main stock exchanges in India which operates

the bulk of the share and securities trading. They are:
Bombay Stock Exchange
The Bombay Stock Exchange Limited is the oldest stock exchange in

Asia and has the third largest number of listed companies in the world, with 4700
listed as of August 2007. It is located at Dalal Street, Mumbai, India. On 31
December 2007, the equity market capitalization of the companies listed on the
BSE was US$ 1.79 trillion, making it the largest stock exchange in South Asia and
the 12th largest in the world.
With over 4700 Indian companies listed & over 7700scrips on the stock
exchange, it has a significant trading volume. The BSE SENSEX (Sensitive index),
also called the "BSE 30", is a widely used market index in India and Asia. Though
many other exchanges exist, BSE and the National Stock Exchange of India
account for most of the trading in shares in India.
History
The Bombay Stock Exchange is known as the oldest exchange in Asia. It traces its
history to the 1850s, when 4 Gujarati and 1 Parsi stockbroker would gather under
banyan trees in front of Mumbai's Town Hall. The location of these meetings
changed many times, as the number of brokers constantly increased. The group
eventually moved to Dalal Street in 1874 and in 1875 became an official
organization known as 'The Native Share & Stock Brokers Association'. In 1956,
43 | P a g e
the BSE became the first stock exchange to be recognized by the Indian
Government under the Securities Contracts Regulation Act. The Bombay Stock
Exchange developed the BSE Sensex in 1986, giving the BSE a means to
measure overall performance of the exchange. In 2000 the BSE used this index to
open its derivatives market, trading Sensex futures contracts. The development
of Sensex options along with equity derivatives followed in 2001 and 2002,
expanding the BSE's trading platform. Historically an open outcry floor trading
exchange, the Bombay Stock Exchange switched to an electronic trading system
in 1995. It took the exchange only fifty days to make this transition. This
automated, screen-based trading platform called BSE On-line trading (BOLT)
currently has a capacity of 80 lakh orders per day. The BSE has also introduced
the world's first centralized exchange-based internet trading system,
BSEWEBx.co.in to enable investors anywhere in the world to trade on the BSE
platform.
Timeline
Following is the timeline on the rise and rise of the Sensex through Indian stock
market history.
1830 Business on corporate stocks and shares in Bank and Cotton presses
started in Bombay.
1860-1865 Cotton price bubble as a result of the American Civil War
1870-90 Sharp increase in share prices of jute industries followed by a boom in

tea stocks and coal
1978-79 Base year of Sensex, defined to be 100.
1986 Sensex first compiled using a market Capitalization-Weighted

methodology for 30 component stocks representing well-established companies
across key sectors.
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30 October 2006 The Sensex on October 30, 2006 crossed the magical
figure of 13,000 and closed at 13,024.26 points, up 117.45 points or 0.9%. It took
135 days for the Sensex to move from 12,000 to 13,000 and 123 days to move
from 12,500 to 13,000.
5 December 2006 The Sensex on December 5, 2006 crossed the 14,000-

mark to touch 14,028 points. It took 36 days for the Sensex to move from 13,000
to the 14,000 mark.
6 July 2007 The Sensex on July 6, 2007 crossed the magical figure of 15,000
to touch 15,005 points in afternoon trade. It took seven months for the Sensex to
move from 14,000 to 15,000 points.
19 September 2007 The Sensex scaled yet another milestone during early
morning trade on September 19, 2007. Within minutes after trading began, the
Sensex crossed 16,000, rising by 450 points from the previous close. The 30-
share Bombay Stock Exchange's sensitive index took 53 days to reach 16,000
from 15,000. Nifty also touched a new high at 4659, up 113 points.
The Sensex finally ended with a gain of 654 points at 16,323. The NSE Nifty
gained 186 points to close at 4,732.
26 September 2007 The Sensex scaled yet another height during early
morning trade on September 26, 2007. Within minutes after trading began, the
Sensex crossed the 17,000-mark . Some profit taking towards the end, saw the
index slip into red to 16,887 - down 187 points from the day's high. The Sensex
ended with a gain of 22 points at 16,921.
9 October 2007 The BSE Sensex crossed the 18,000-mark on October 9,

2007. It took just 8 days to cross 18,000 points from the 17,000 mark. The index
zoomed to a new all-time intra-day high of 18,327. It finally gained 789 points to
close at an all-time high of 18,280. The market set several new records including
the biggest single day gain of 789 points at close, as well as the largest intra-day
gains of 993 points in absolute term backed by frenzied buying after the news of
45 | P a g e
the UPA and Left meeting on October 22 put an end to the worries of an
impending election.
15 October 2007 The Sensex crossed the 19,000-mark backed by revival of

funds-based buying in blue chip stocks in metal, capital goods and refinery
sectors. The index gained the last 1,000 points in just four trading days. The
index touched a fresh all-time intra-day high of 19,096, and finally ended with a
smart gain of 640 points at 19,059.The Nifty gained 242 points to close at 5,670.
29 October 2007 The Sensex crossed the 20,000 mark on the back of
aggressive buying by funds ahead of the US Federal Reserve meeting. The index
took only 10 trading days to gain 1,000 points after the index crossed the 19,000-
mark on October 15. The major drivers of today's rally were index heavyweights
Larsen and Toubro, Reliance Industries, ICICI Bank, HDFC Bank and SBI among
others. The 30-share index spurted in the last five minutes of trade to fly-past the
crucial level and scaled a new intra-day peak at 20,024.87 points before ending
at its fresh closing high of 19,977.67, a gain of 734.50 points. The NSE Nifty rose
to a record high 5,922.50 points before ending at 5,905.90, showing a hefty gain
of 203.60 points.
8 January 2008 The sensex peaks. It crossed the 21,000 mark in intra-day
trading after 49 trading sessions. This was backed by high market confidence of
increased FII investment and strong corporate results for the third quarter.
However, it later fell back due to profit booking.
13 June 2008 The sensex closed below 15,200 mark, Indian market suffer
with major downfall from January 21, 2008
25 June 2008 The sensex touched an intra day low of 13,731 during the early
trades, then pulled back and ended up at 14,220 amidst a negative sentiment
generated on the Reserve Bank of India hiking CRR by 50 bps. FII outflow
continued in this week.
2 July 2008 The sensex hit an intra day low of 12,822.70 on July 2, 2008. This
is the lowest that it has ever been in the past year. Six months ago, on January
46 | P a g e
10, 2008, the market had hit an all time high of 21206.70. This is a bad time for
the Indian markets, although Reliance and Infosys continue to lead the way with
mostly positive results. Bloomberg lists them as the top two gainers for the
Sensex, closely followed by ICICI Bank and ITC Ltd.
6 October 2008 The sensex closed at 11801.70 hitting the lowest in the past
2 years.
10 October 2008 The Sensex today closed at 10527,800.51 points down

from the previous day having seen an intraday fall of as large as 1063 points.
Thus, this week turned out to be the week with largest percentage fall in the
Sensex
18 May 2009 After the result of 15th Indian general election Sensex gained
2110.79 points from the previous close of 12173.42, a record one-day gain. In the
opening trade itself the Sensex evinced a 15% gain over the previous close which
led to a two-hour suspension in trading. After trading resumed, the Sensex
surged again, leading to a full day suspension of trading.
BSE Indices
For the premier stock exchange that pioneered the securities transaction
business in India, over a century of experience is a proud achievement. A lot has
changed since 1875 when 318 persons by paying a then princely amount of Re.
1, became members of what today is called Bombay Stock Exchange Limited
(BSE).
Over the decades, the stock market in the country has passed through good and
bad periods. The journey in the 20th century has not been an easy one. Till the
decade of eighties, there was no measure or scale that could precisely measure
the various ups and downs in the Indian stock market. BSE, in 1986, came out
with a Stock Index-SENSEX- that subsequently became the barometer of the
Indian stock market.
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The launch of SENSEX in 1986 was later followed up in January 1989 by
introduction of BSE National Index (Base: 1983-84 = 100). It comprised 100
stocks listed at five major stock exchanges in India - Mumbai, Calcutta, Delhi,
Ahmadabad and Madras. The BSE National Index was renamed BSE-100 Index
from October 14, 1996 and since then, it is being calculated taking into
consideration only the prices of stocks listed at BSE. BSE launched the dollar-
linked version of BSE-100 index on May 22, 2006.
With a view to provide a better representation of the increasing number of listed

companies, larger market capitalization and the new industry sectors, BSE
launched on 27th May, 1994 two new index series viz., the 'BSE-200' and the
'DOLLEX-200'. Since then, BSE has come a long way in attuning itself to the
varied needs of investors and market participants. In order to fulfill the need for
still broader, segment-specific and sector-specific indices, BSE has continuously
been increasing the range of its indices. BSE-500 Index and 5 sectorial indices
were launched in 1999. In 2001, BSE launched BSE-PSU Index, DOLLEX-30 and
the country's first free-float based index - the BSE TECk Index. Over the years,
BSE shifted all its indices to the free-float methodology (except BSE-PSU index).
BSE disseminates information on the Price-Earnings Ratio, the Price to Book Value
Ratio and the Dividend Yield Percentage on day-to-day basis of all its major
indices.
The values of all BSE indices are updated on real time basis during market hours
and displayed through the BOLT system, BSE website and news wire agencies.
All BSE Indices are reviewed periodically by the BSE Index Committee. This
Committee which comprises eminent independent finance professionals frames
the broad policy guidelines for the development and maintenance of all BSE
indices. The BSE Index Cell carries out the day-to-day maintenance of all indices
and conducts research on development of new indices.
Sensex correlation with emerging market indices:

Sensex is significantly correlated with the stock indices of other emerging
markets.
48 | P a g e
Awards
• The World Council of Corporate Governance has awarded the Golden
Peacock Global CSR Award for BSE's initiatives in Corporate Social
Responsibility (CSR).
• The Annual Reports and Accounts of BSE for the year ended March 31,
2006 and March 31 2007 have been awarded the ICAI awards for
excellence in financial reporting.
• The Human Resource Management at BSE has won the Asia - Pacific
HRM awards for its efforts in employer branding through talent
management at work, health management at work and excellence in HR
through technology
To cater to the customer, the Bombay Stock Exchange offers

a number of facilities and services. They are:
 BSE Investors Services
 BSE On – Line Trading Process (BOLT)
 BSE On – Line Surveillance System (BOSS)
 BSE Training Institute of Various Certification Programs
National Stock Exchange
49 | P a g e
The National Stock Exchange of India Limited is a Mumbai-based stock
exchange. It is the largest stock exchange in India in terms of daily turnover and
number of trades, for both equities and derivative trading. NSE has a market
capitalization of around Rs 47, 01,923 crore (7 August 2009) and is expected to
become the biggest stock exchange in India in terms of market capitalization by
2009 end. Though a number of other exchanges exist, NSE and the Bombay
Stock Exchange are the two most significant stock exchanges in India, and
between them are responsible for the vast majority of share transactions. The
NSE's key index is the S&P CNX Nifty, known as the Nifty, an index of fifty major
stocks weighted by market capitalization.
NSE is mutually-owned by a set of leading financial institutions, banks, insurance

companies and other financial intermediaries in India but its ownership and
management operate as separate entities. There are at least 2 foreign investors
NYSE Euro next and Goldman Sachs who have taken a stake in the NSE. [4] As of
2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across
India . In October 2007, the equity market capitalization of the companies listed
[5]
on the NSE was US$ 1.46 trillion, making it the second largest stock exchange in
South Asia. NSE is the third largest Stock Exchange in the world in terms of the
number of trades in equities. It is the second fastest growing stock exchange in
the world with a recorded growth of 16.6%.
Origins
The National Stock Exchange of India was promoted by leading financial
institutions at the behest of the Government of India, and was incorporated in
November 1992 as a tax-paying company. In April 1993, it was recognized as a
stock exchange under the Securities Contracts (Regulation) Act, 1956. NSE
commenced operations in the Wholesale Debt Market (WDM) segment in June
1994. The Capital market (Equities) segment of the NSE commenced operations
in November 1994, while operations in the Derivatives segment commenced in
June 2000.
Innovations
50 | P a g e
NSE has remained in the forefront of modernization of India's capital and financial
markets, and its pioneering efforts include:
• Being the first national, anonymous, electronic limit order book (LOB)
exchange to trade securities in India. Since the success of the NSE, existent
market and new market structures have followed the "NSE" model.
• Setting up the first clearing corporation "National Securities Clearing
Corporation Ltd." in India. NSCCL was a landmark in providing innovation on
all spot equity market (and later, derivatives market) trades in India.
• Co-promoting and setting up of National Securities Depository Limited, first
depository in India.
• Setting up of S&P CNX Nifty.
• NSE pioneered commencement of Internet Trading in February 2000, which
led to the wide popularization of the NSE in the broker community.
• Being the first exchange that, in 1996, proposed exchange traded
derivatives, particularly on an equity index, in India. After four years of
policy and regulatory debate and formulation, the NSE was permitted to
start trading equity derivatives
• Being the first and the only exchange to trade GOLD ETFs (exchange
traded funds) in India.
• NSE has also launched the NSE-CNBC-TV18 media centre in association
with CNBC-TV18.
• NSE.IT Limited, setup in 1999, is a 100% subsidiary of the National Stock
Exchange of India. A Vertical Specialist Enterprise, NSE.IT offers end-to-end
Information Technology (IT) products, solutions and services.
Markets:
Currently, NSE has the following major segments of the capital market:
• Equity
• Futures and Options
• Retail Debt Market
• Wholesale Debt Market
• Currency futures
51 | P a g e
• MUTUAL FUND
• STOCKS LENDING & BROWING
August 2008 Currency derivatives were introduced in India with the launch of
Currency Futures in USD INR by NSE. Currently it has also launched currency
futures in EURO, POUND & YEN. Interest Rate Futures was introduced for the first
time in India by NSE on 31st August 2009, exactly after one year of the launch of
Currency Futures.
NSE became the first stock exchange to get approval for Interest rate futures as
recommended by SEBI-RBI committee, on 31 August,2009, a futures contract
based on 7% 10 Year GOI bond (NOTIONAL) was launched with quarterly
maturities.
NSE Milestones:-
• November 1992 Incorporation
• April 1993 Recognition as a stock exchange
• May 1993 Formulation of business plan
• June 1994 Wholesale Debt Market segment goes live
• November 1994 Capital Market (Equities) segment goes live
• March 1995 Establishment of Investor Grievance Cell
• April 1995 Establishment of NSCCL, the first Clearing Corporation
• June 1995 Introduction of centralized insurance cover for all trading
members
• July 1995 Establishment of Investor Protection Fund
• October 1995 Became largest stock exchange in the country
• April 1996 Commencement of clearing and settlement by NSCCL
• April 1996 Launch of S&P CNX Nifty
• June 1996 Establishment of Settlement Guarantee Fund
• November 1996 Best IT Usage award by Computer Society of India
• December 1996 Commencement of trading/settlement in dematerialized
securities
• December 1996 Dataquest award for Top IT User
52 | P a g e
• December 1996 Launch of CNX Nifty Junior
• February 1997 Regional clearing facility goes live
• November 1997 Best IT Usage award by Computer Society of India
• May 1998 Promotion of joint venture, India Index Services & Products
Limited (IISL)
• May 1998 Launch of NSE's Web-site: www.nse.co.in
• July 1998 Launch of NSE's Certification Programme in Financial Market
• August 1998 CYBER CORPORATE OF THE YEAR 1998 award
• February 1999 Launch of Automated Lending and Borrowing Mechanism
• April 1999 CHIP Web Award by CHIP magazine
• October 1999 Setting up of NSE.IT
• January 2000 Launch of NSE Research Initiative
• February 2000 Commencement of Internet Trading
• June 2000 Commencement of Derivatives Trading (Index Futures)
• September 2000 Launch of 'Zero Coupon Yield Curve'
• November 2000 Launch of Broker Plaza by Dotex International, a joint
venture between NSE.IT Ltd. and i-flex Solutions Ltd.
• December 2000 Commencement of WAP trading
• June 2001 Commencement of trading in Index Options
• July 2001 Commencement of trading in Options on Individual Securities
• November 2001 Commencement of trading in Futures on Individual
Securities
• December 2001 Launch of NSE VaR for Government Securities
• January 2002 Launch of Exchange Traded Funds (ETFs)
• May 2002 NSE wins the Wharton-Infosys Business Transformation Award in
the Organization-wide Transformation category
• October 2002 Launch of NSE Government Securities Index
• January 2003 Commencement of trading in Retail Debt Market
• June 2003 Launch of Interest Rate Futures
• August 2003 Launch of Futures & options in CNXIT Index
• June 2004 Launch of STP Interoperability
• August 2004 Launch of NSE’s electronic interface for listed companies
• March 2005 ‘India Innovation Award’ by EMPI Business School, New Delhi
53 | P a g e
• June 2005 Launch of Futures & options in BANK Nifty Index
• December 2006 'Derivative Exchange of the Year', by Asia Risk magazine
• January 2007 Launch of NSE – CNBC TV 18 media centre
• March 2007 NSE, CRISIL announce launch of IndiaBondWatch.com
• June 2007 NSE launches derivatives on Nifty Junior & CNX 100
• October 2007 NSE launches derivatives on Nifty Midcap 50
• January 2008 Introduction of Mini Nifty derivative contracts on 1st January
2008
• April 2008 Launch of India VIX
• April 2008 Launch of Securities Lending & Borrowing Scheme
• August 2008 Launch of Currency Derivatives
• August 2009 Launch of Interest Rate Futures
• November 2009 Launch of Mutual Fund Service System
• December 2009 Commencement of settlement of corporate bonds
• February 2010 Launch of Currency Futures on additional currency pairs
INDICES
NSE also set up as index services firm known as India Index Services & Products
Limited (IISL) and has launched several stock indices, including:
• S&P CNX Nifty (Standard & Poor's CRISIL NSE Index)

• CNX Nifty Junior
• CNX 100 (= S&P CNX Nifty + CNX Nifty Junior)
• S&P CNX 500 (= CNX 100 + 400 major players across 72 industries)
• CNX Midcap (introduced on 18 July 2005 replacing CNX Midcap 200)
Exchange Traded Funds on NSE
NSE has a number of exchanges. These are typically index funds and GOLD
ETFs. Some of the popular ETFs on NSE are.
• NIFTYBEES - ETF based on NIFTY index Nifty BEES Live quote

• Gold Bees - ETF based on Gold prices. Tracks the price of Gold. Each
unit is equivalent to 1 gm. of gold and bears the price of 1gm of gold.
54 | P a g e
• Bank Bees - ETF that tracks the CNX Bank Index. BSE and NSE
ESCORTS GROUP – ABOUT US
The Escorts Group is among India's leading engineering conglomerates

operating in the high growth sectors of Agri-machinery, construction &
material handling equipment, railway equipment and auto components.
Having pioneered farm mechanization in the country, Escorts has played a pivotal
role in the agricultural growth of India for over five decades. One of the leading
tractor manufacturers of the country, Escorts offers a comprehensive range of
tractors, more than 45 variants starting from 25 to 80 HP. Escort, Farmtrac and
Powertrac are the widely accepted and preferred brands of tractors from the
house of Escorts. A leading material handling and construction equipment
manufacturer, we manufacture and market a diverse range of equipment like
cranes, loaders, vibratory rollers and forklifts.
Escorts today are the world's largest Pick 'n' Carry Hydraulic Mobile Crane
manufacturer. Escorts have been a major player in the railway equipment
business in India for nearly five decades. Our product offering includes brakes,
couplers, shock absorbers, rail fastening systems, composite brake blocks and
vulcanized rubber parts. In the auto components segment, Escorts is a leading
manufacturer of auto suspension products including shock absorbers and
telescopic front forks. Over the years, with continuous development and
improvement in manufacturing technology and design, new reliable products
have been introduced.
Throughout the evolution of Escorts, technology has always been its greatest ally
for growth. In the over six decades of our inception, Escorts has been much more
than just being one of India's largest engineering companies. It has been a
harbinger of new technology, a prime mover on the industrial front, at every
stage introducing products and technologies that helped take the country
forward in key growth areas. Over a million tractors and over 16,000 construction
and material handling equipment that have rolled out from the facilities of
Escorts, complemented by a highly satisfied customer base, are testimony to the
55 | P a g e
manufacturing excellence of Escorts. Following the globally accepted best
manufacturing practices with relentless focus on research and development,
Escorts is today in the league of premier corporate entities in India.
Technological and business collaboration with world leaders over the years,
globally competitive indigenous engineering capabilities, over 1600 sales and
service outlets and footprints in over 40 countries have been instrumental in
making Escorts the Indian multinational.
At a time when the world is looking at India as an outsourcing destination, Escorts

is rightly placed to be the dependable outsourcing partner of world's leading
engineering corporations looking at outsourcing manufacture of engines,
transmissions, gears, hydraulics, implements and attachments to tractors, and
shock absorbers for heavy trailers. In today's Global Market Place, Escorts is fast
on the path of an internal transformation, which will help it to be a key driver of
manufacturing excellence in the global arena. For this we are going beyond just
adhering to prevailing norms, we are setting our own standards and relentlessly
pursuing them to achieve our desired benchmarks of excellence.
HISTORY OF ESCORTS:-
The genesis of Escorts goes back to 1944 when two brothers, Mr. H. P. Nanda and
Mr. Yudi Nanda, launched a small agency house, Escorts Agents Ltd. in Lahore.
Over the years, Escorts has surged ahead and evolved into one of India's largest
conglomerates. In this journey of six decades, Escorts has had the privilege of
being associated with some of the world leaders in the engineering
manufacturing space like Minneapolis Moline, Massey Ferguson, Goetze,
Mahle, URSUS, CEKOP, Ford Motor Company, J C Bamford Excavators,
Yamaha, Claas, Carraro, Lucky Goldstar, First Pacific Company, Hughes
Communications, Jeumont Schneider, and Dynapac. These valued
relationships be it technological or marketing, are our highly cherished
experiences treasures, which have helped us inculcate best in class
manufacturing practices and to emerge as a technologically independent world
class engineering organization.
56 | P a g e
.
LEADERSHIP TEAM
Mr. Rajan Nanda

Chairman
Mr. Nikhil Nanda

Joint Managing Director
Mr. Rohtash Mal

Executive Director and Chief Executive Officer - Agri Machinery
Group
Mr. Kanwal Kishore

Vij
ED & CEO – Escorts

Construction
Equipment Limited
(ECEL)
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Mr. G.B. Mathur
Executive Vice President – Law & Company Secretary
Mr. O K Balraj
Group Chief Financial Officer
Mr. Partha Dasgupta

Group Head Human Resources & Employee Relations
FACT SHEET OF ESCORTS LIMITED
Distribution of shareholding as on 30th September 2009
Category %age to the Capital
1. Promoters and Promoter Group 32.00
2. Foreign Institutional Investors 16.83
3. Domestic Institutional Investors 14.14
4. Public & Others 37.03
Total
100.00 Figure: 4.1
Shareholding Pattern as on 30th September, 2009

Figure: 4.2
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Range of holding Number of shareholders % of Total
001 to 100 50218 60.97

101 to 500 26124 31.72
501 to 1,000 3103 3.77
1,001 to 5,000 2346 2.85
5,001 to 10,000 294 0.36
10,001 to 50,000 207 0.25
50,001 to 1,00,000 27 0.03
Above 1,00,000 46 0.05
TOTAL 82365 100.00
PRODUCTS & SERVICES OF ESCORTS
 TRACTORS
 Farmtrac: Most powerful tractor in its range with excellent productivity in

terms of output.
 Powertrac: Most fuel efficient and tractor which has best value for money
 Escorts: Reliable and trustworthy with a powerful feel. Low maintenance
cost
 ENGINES
G 15 G 20
G 25 G 30
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IMPLEMENTS & TRAILORS
12 Disc Offset Disc 12 Disc Tandem

Spring Tyne Tiller Rigid Tyne Tiller
Harrow Harrow
Escorts Securities Limited is the premier Asset Management Company offering

Investment products across a broad cross-section of Financial Assets covering
both Debt and Equity. It was registered with Securities and Exchange Board of
India (SEBI) in 1996.The Company is the one of the earliest entrants into the
Indian Mutual Funds Industry.
It is associated with Escorts Group - with Escorts Limited as its Flagship Company,
which is amongst India's leading corporations, operating in diverse fields of Agri-
Machinery, Construction and Railway Ancillaries and Financial Services. The
genesis of Escorts goes back to 1944 and over the decades, Escorts has surged
ahead and evolved into one of the India's leading conglomerates. The group
holds a great repute and trust amongst people.
Escorts Mutual Fund has been established as a trust in accordance with the
provisions of the Indian Trusts Act, 1882 and the Deed of Trust dated 15th April,
1996 has been registered under the Indian Registration Act, 1908. Backed by one
of the most trusted and valued brands in India, Escorts Mutual Fund has earned
the trust of lakhs of investors with its consistent performance and excellent
service.
Escorts Mutual Fund, has made impressive gains by constantly increasing its
retail client base over the years. We at Escorts Mutual Fund aim to provide best
60 | P a g e
risk-adjusted returns to our clients. The Escorts philosophy is centered on seeking
consistent, long-term results. It aims at overall excellence, within the framework
of transparent and rigorous risk controls.
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. Balanced Fund, Growth Plan and Floating Rate Fund
are some popular open ended plans of Escorts Mutual Fund. Balanced Fund aims
to generate long term capital appreciation and current income from a well
diversified portfolio of equity shares and fixed income securities. Floats Rates
objective is to make regular income through investment in a portfolio comprising
substantially of Floating Rate Debt Securities. Growth Plan generates capital
appreciation by investing mainly in a well diversified portfolio of equity shares
with growth potential.
INVESTMENT PHILOSPHY:
We believe in a simple philosophy that different people have different

needs. That is why our investment strategies and products are geared
towards fulfilling the needs of our investors. e derives our satisfaction from
the fulfillment of the expectations of those special people, who have
exposed faith in us and have invested their savings in our schemes.
The following fundamentals define and guide our investments:
• A Value-Based Approach
We believe in the concept of value investing and look for a consistent

track-record and the inherent fundamental soundness of the entities we
invest our in. We also give weightage to the future business prospects and
61 | P a g e
the sustainability of the earnings .Such a value based investment approach
ensures that the investor’s money grows with us.
• Emphasis on Research
Our extensive research on the industry, the corporates and the money
markets helps us in planning our investments and formulating our
strategies in a wise manner. In periods of uncertainties and fluctuating
market trends, the research work gives substance to strategies and
ensures their soundness.
• Discipline
In markets that are characterized by cyclical booms and busts, it is vey

essential to be cautious and prudent. That is why, we believe in well
thought out and well planned investments and in having a healthy
suspicion of volatile market situations. We need to do all this because we
feel that we have a responsibility towards our investors.
62 | P a g e
KEY PERSONNEL
Board of Directors of the Escorts Asset Management Company
Ms. Ritu Nanda Prof. Asish K. Bhattacharyya
Ms. Nitasha Nanda Prof. S.C. Kuchhal

Mr.P.C.Gupta Mr. Lalit K. Khanna
Board of Trustees
Mr. Rajan Nanda, Chairman and Managing Director, Escorts
Limited.
Dr. Rakesh Khurana Chairman & Managing Director, Knowledge Network

India Pvt. Ltd.
Mr. Deba Prasad Roy, Financial Consultant.
Mr. Ashok Kumar Bhargava
KEY PERSONNEL
Name Designation
Mr. Lalit K. Khanna Chief Executive Officer
Mr. Pradeep K. Jain Head Legal & Compliance
Ms. Sunjit Sahel Company Secretary & Compliance Officer
Mr. Jagveer Singh Fauzdar Fund Manager (Equity)
Mr. Sanjeev Sharma Fund Manager (Debt)
Mr. Prabhash Chandra National Sales Head
Ms. Mohini Sharma Investor Relations & Registrar Services Officer
PRODUCTS AVAILABLE
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 Escorts Power & Energy Fund –
Mission to ensure energy independent country by 2030.The investment objective

of the scheme is to provide income distribution and/or medium to long-term
capital gains by investing predominantly in equity/equity related instruments of
the companies in the Power/Energy Sector and/or Debt/Money-Market
instruments. Fund details are as follows:
Table: 4.3
Type of Scheme Open Ended Growth Scheme
Investment Objective of the scheme is to provide income
Investment distribution and/or medium to long term-capital gains by
Objective investing predominantly in Equity/Equity related instruments of

the companies in the Power / Energy Sector and /or
Debt/Money Market instruments.
Equity Shares and Equity related Instruments: 65-100,
Asset Allocation Debt Instruments, Govt. Bonds, Money Market Instruments
etc.: 0 – 35
Minimum Application Purchase: Rs. 1000/- and Multiples of Re. 1/-

Additional Purchase : Rs. 1000 and Multiples of Re.1/-,
Amount Repurchase: Minimum of Rs. 1000/-
Load Structure Entry Load: Nil : Exit Load :1% if exit <= 1 yrs.
Option Available
Daily NAV NAV will be declared on business days.
publication
 Escorts Opportunities Fund
It was Launched in February 2001, Escorts opportunities Fund (EOF), Designed to

provide regular income. We invest in well- diversified portfolio for both equity and
debt. Also, in case of equities, we as a matter of policy only invest in well
researched large cap stocks. Further to reduce the volatility in returns induced
due to the equity component, the fund aggressively uses derivatives by selling
64 | P a g e
Table: 4.4
option. This premium income received in the process not only reduces the
volatility but also enhances the risk adjusted return on the scheme. Through this
mechanism, we also partially hedge any potential downside in the portfolio to the
extent of premium received. Fund details are as follows:
Table: 4.4
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Type of Scheme An Open-Ended Growth Fund
The scheme seeks stable and regular income through an actively

managed portfolio of stocks, bonds and money market instruments.
The asset allocation is dynamically planned to capture the best of
the opportunities in equity and debt Exposure in equity is a blend of
Investment large and mid cap stocks, skewed largely towards the well-
researched blue chips. In debt, the scheme invests mainly in
Objective
Central and State Government debt papers besides PSUs and bank
bonds. The highlight of the scheme is the extensive use of
derivatives not only as a hedging tool but also in generating regular
income, which in turn enhances the overall portfolio’s risk-adjusted
return.
Asset Allocation Fixed Income 0-49
Equity and Equity Related Securities 51-100
Minimum Growth Option & Dividend Re-investment option Rs. 1000/-,
Application Dividend Payout Option: Rs 30,000/-, Additional Purchase :Rs. 1000,
Load Structure Entry Load: Nil

Exit Load: 1% if exit < = 1 year
Option Available
Daily NAV NAV will be declared on business days
publication
October
April 06- November June
April 02-March 07- Jan
Septembe 08- May,09 09-
Dividend Paid 06 Septembe 10
r 07 January 09 Dec09
r 08
Avg. 0.97
1.25% 1.5% 1.6% 0.61
Rate % 1.962 0.981
(47-Div.) (18 Div.) (12 Div.) 3
(7 Div.)
 Escorts Balanced Fund –
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To generate long term Capital Appreciation and current
income from a portfolio of equity & fixed income securities.
Table: 4.5
Type of Scheme Open Ended Balanced Scheme
An open-ended balanced scheme, with the investment objective

Investment
to generate long term capital appreciation and current income
Objective
from a portfolio of equity & fixed-income securities.
Equity Shares and Equity Related Instruments. 50-80

Asset Allocation
Debt Instruments, Govt. Bonds 20-45
Minimum
Purchase: Rs. 1000 and Multiple of Re. 1/-
Application
Additional Purchase: Rs. 1000 and Multiple of Re.1/-
Amount
Load Structure Entry Load: NIL : Exit Load :1% if exit <=1yrs
Option Available
publication
Dividend Mar’02 Dec’03 Mar’05 Mar’06 Mar’07 Mar’08
Rate 10% 45% 70% 40% 20% 30%
 Escorts Income Plan –

To generate current income by investing predominantly in a well diversified
portfolio of Fixed Income securities with moderate risk levels. This income may
be complemented by possible Capital Appreciation.
Table: 4.6
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Type of Scheme An Open Ended Income Scheme
To generate current income by investing predominantly in a well
Investment diversified portfolio of Fixed Income securities with moderate risk
Objective levels. This income may be complemented by possible Capital
Appreciation.
Money Market Instruments: 10 – 20; Fixed Income Securities: 80 -
Asset Allocation 90 (max 100); Equity and Equity Linked Instrument: 0 - 10 (max
20); Units of other Mutual
Funds: 0 - 5 (max 5);
Minimum
Purchase: Rs. 1000/- and Multiples of Re. 1/-, Additional
Application
Purchase : Rs. 1000 and Multiples of Re.1/-, Repurchase:
Amount
Minimum of Rs. 1000/-
Load Structure Entry Load – Nil, Exit Load – 0.5% if exit <= 6 months
Option Available
publication
Dividend Paid 126 Dividends Since May 1998
 Escorts Tax Plan –

To generate Capital Appreciation by investing predominantly
in a well diversified portfolio of Equity Shares with growth potential. This Income
may be complemented by possible dividend and other income.
Table: 4.7
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Type of Scheme Open Ended Equity Linked Saving Scheme
To generate Capital Appreciation by investing predominantly in a

Investment well diversified portfolio of Equity Shares with growth potential.
Objective This Income may be complemented by possible dividend and other
income.
Equity, Cumulative convertible preference shares; fully convertible

Asset Allocation
Debentures and Bonds. 80-100, Money Market Instruments 0-20
Minimum
Purchase: Rs. 500 and Multiple of Re. 1/-
Application
Additional Purchase : Rs 500 and Multiple of Re. 1/-,
Amount
Load Structure Entry Load : Nil Exit Load : Nil

Lockin of 3 years being ELSS
Option Available
publication
March March March

Dividend March 2004 March 2006
2005 2007 2008
Rate 80% 30% 35% 25% 30%
 Escorts Growth Plan –

To generate Capital Appreciation by investing predominantly in a well diversified
portfolio of Equity Shares with growth potential. This income may be
complemented by possible dividend and other Income.
Table: 4.8
Investment To generate Capital Appreciation by investing predominantly in a

Objective well diversified portfolio of Equity Shares with growth potential.
This income may be complemented by possible dividend and other
69 | P a g e
Income.
Equity Shares and Equity Related Instruments Approx. 0-20
Asset Allocation Fixed Income Securities and Money Market Instruments (Including
Securitized debt not exceeding 10%) Approx. 0-20 Units of other
Mutual Fund Scheme(s) Approx. 0-5
Minimum
Purchase: Rs. 1000/- and Multiples of Re. 1/- Additional Purchase :
Application
Rs.1000 & Multiples of Re.1/, Repurchase: Minimum of Rs. 1000/-
Amount
Load Structure Entry Load : Nil , Exit Load: 1% if exit <= 1 year
Option Available
publication
Dividend Dec 03 Mar 06 Mar’06 Mar’07 Mar’08
Rate 80% 40% 50% 30% 30%
 Escorts Gilt Plan –

To generate income and capital appreciation through investments in Government
Securities. The aim is to generate returns commensurate with minimal credit risk
by investing in securities created and issued by the Central Government and/or a
State Government and/or repos/reverse repos in such government securities as
may be permitted by RBI
Table: 4.9
Type of Scheme Open Ended Gilt Scheme
Investment To generate income and capital appreciation through investments

Objective in Government Securities. The aim is to generate returns
commensurate with minimal credit risk by investing in securities
created and issued by the Central Government and/or a State
Government and/or repos/reverse repos in such government
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securities as may be permitted by RBI.
Asset Allocation Govt. Securities 80-100, Money Market Instruments 0-20
Minimum Purchase: Rs. 1000/- and Multiples of Re. 1/-,

Application Additional Purchase : Rs. 1000 and Multiples of Re.1/-,
Load Structure Entry Load: Nil, Exit Load - 0.50% if exit <= 6 months
Option Available
publication
Dividend Sep 01 Dec 01 Mar 02
Rate 30 30 20
 Escorts Liquid Plan –

The primary investment objective of the scheme is to provide income and
liquidity consistent with the prudent risk from a portfolio comprising of money
market and debt instruments. This income may be complemented by possible
capital appreciation. The aim is to optimize returns while providing liquidity.
Table: 4.10
Type of Scheme Open Ended Liquid Scheme
To provide income and liquidity consistent with the prudent risk

from a portfolio comprising of Money Market and Debt
Investment
Instruments. This income may be complemented by possible
Objective
capital appreciation. The aim is to optimize returns while
providing liquidity.
Asset Allocation Money Market Instruments: 90 – 100, Debt Securities: 0 - 10
71 | P a g e
Purchase: Rs. 1000/- and Multiples of Rs. 1/-
Minimum
Additional Purchase : Rs 1000 and Multiples of Rs.1/-,
Application Amount
Repurchase: Minimum of Rs. 1000/-
Load Structure Entry Load : Nil, Exit Load :Nil
Option Available
publication
 Escorts Leading Sectors Fund –
The investment objective of the scheme is to provide capital appreciation or

income distribution by investing in companies from Leading Sectors, depending
upon their growth prospects and sustainability of future earnings growth.
Table: 4.11
To Provide capital appreciation or income distribution by investing

Investment
in companies from Leading Sectors, depending upon their growth
Objective
prospects and sustainability of future earnings growth.
Minimum Purchase: Rs. 1000/-and Multiples of Re. 1/-

Application Additional Purchase: Rs.1000 and Multiple of Re. 1/-, Repurchase:
Amount Minimum of Rs. 1000/-
Load Structure Entry Load : Nil , Exit Load: 1% if exit <= 1 years
Option Available
publication
 Escorts Income Bond –
72 | P a g e
To generate income by investing predominantly in a well diversified portfolio of
Fixed Income securities with moderate risk levels. This income may be
complemented by possible Capital Appreciation.
Table: 4.12
Type of Scheme Open Ended Income Scheme
To generate current income by investing predominantly in a well

Investment diversified portfolio of Fixed Income Securities with moderate risk
Objective levels. This income may be complemented by possible Capital
Appreciation.
Asset Allocation Money Market Securities: 0-25 ; Debt Securities: 40-90

Equity and Equity Related Instrument : 0-25
Minimum Purchase: Rs. 1000/- and Multiples of Rs. 1/-
Application Additional Purchase : Rs 1000 and Multiples of Rs.1/-,
Load Structure Entry Load : Nil, Exit Load : 0.50% if exit <=6 months
Option Available
publication
Bonus 24.02.2010
Rate 3:50 (3 bonus units for 50 units held in growth option of EIB)
 Escorts High Yield Equity Plan –
To generate income by investing predominantly in a well diversified portfolio of

Fixed Income securities with moderate risk levels. This income may be
complemented by possible Capital Appreciation.
Table: 4.13
73 | P a g e
To generate income by investing predominantly in well diversified
portfolio of equity stocks providing high dividend yield but at the
same time capture long term capital appreciation as and when the
opportunity arises .This long style of investment tries to locate , in a
Investment disciplined manner, shares ,which for a variety of reason are selling
Objective at prices which are substantially lower than the company’s actual
business value or future earnings potential, and are also yielding a
higher return than normal dividend yield. These companies would be
backed by stable earnings in the past while offering fair growth
potential in the future.
Equity Shares and Equity related Instruments: 65- 100,Debt

Asset Allocation Instruments,(Govt. Bonds, Money Market Instruments etc.): 0 – 25
Securitized Debt : 0-10, Units of other Mutual Fund Scheme(s): 0 – 5

Minimum Purchase: Rs. 1000/- and Multiples of Re. 1/-
Application Additional Purchase : Rs.1000 & Multiples of Re.1/-,
Load Structure Entry Load : Nil , Exit Load: 1% if exit <= 1 years
 Escorts Floating Rate Fund –
To generate regular income through investment in a portfolio comprising

substantially of Floating Rate Debt Securities (including floating rate securitized
debt, Money Market Instruments and Fixed Rate Debt Instruments swapped for
floating rate returns).The scheme shall also invest in Fixed Rate Debt Securities
(including fixed rate securitized debt, Money Market Instruments and Floating Rate
Debt Instruments swapped for fixed returns.
74 | P a g e
Type of Scheme Open Ended Income Scheme
To generate regular income through investment in a portfolio

comprising substantially of Floating Rate Debt Securities (including
floating rate securitized debt, Money Market Instruments and Fixed
Investment
Rate Debt Instruments swapped for floating rate returns).The
Objective
scheme shall also invest in Fixed Rate Debt Securities (including
fixed rate securitized debt, Money Market Instruments and Floating
Rate Debt Instruments swapped for fixed returns
Asset Allocation Floating Rate Debt Securities: 65 – 100

Fixed Rate Debt Securities.: 0 – 35
Minimum Purchase: Rs. 1000/- and Multiples of Rs. 1/-
Application Additional Purchase : Rs 1000 and Multiples of Rs.1/-,
Load Structure Entry Load : Nil , Exit Load: Nil
Option Available
publication
Table: 4.14
List of Mutual Funds Schemes of Escorts Mutual Fund
 Escorts Income Bond-Dividend
75 | P a g e
 Escorts Income Bond-Growth
 Escorts Income Plan-Bonus
 Escorts Income Plan-Dividend
 Escorts Income Plan-Growth
 Escorts Growth Plan-DIVIDEND OPTION
 Escorts Growth Plan-GROWTH OPTION
 Escorts High Yield Equity Plan - Bonus Option
 Escorts High Yield Equity Plan - Dividend Option
 Escorts High Yield Equity Plan - Growth Option
 Escorts Opportunities Fund-Dividend
 Escorts Opportunities Fund-Growth
 Escorts Balanced Fund-Dividend Option
 Escorts Balanced Fund-Growth Option
 Escorts Liquid Plan-Daily Dividend Option
 Escorts Liquid Plan-Growth Option
 Escorts Liquid Plan-Monthly Dividend Option
 Escorts Liquid Plan-Weekly Dividend Option
 Escorts Gilt Plan-DIVIDEND OPTION
 Escorts Gilt Plan-GROWTH OPTION
 Escorts Tax Plan-Dividend
 Escorts Tax Plan-Growth
 Escorts Floating Rate Fund-Dividend Option
 Escorts Floating Rate Fund-Growth Option
OBJECTIVES:
The objectives of the study is to analyses, in detail the growth pattern of

mutual fund industry in India and to evaluate performance of different
schemes floated by most preferred mutual funds in public fund in public
and private sector. The main objectives of this project are:-
76 | P a g e
• To study about the Mutual Funds in India
• To study the various Mutual Funds schemes in India.
• To study about the risk factors involved in the Mutual Funds and How
to analyze it?
• To study the performance of overall mutual funds schemes by
analyzing the NAV and their respective returns.
RESEARCH METHODOLOGY:-
Research is an organized enquiry designed and carried out to provide

information for solving a problem.
Research methodology is a way to systematically solve the research
problem. It may be understood as a science of studying how research
is done scientifically.
• DATA COLLECTION
77 | P a g e
The task of data collection begins after a research problem has been
defined. While deciding about the method of data collection to be used for
the study, the researcher should keep in mind two types of data viz,
primary and secondary.
• Primary data may be described as those data that have been

observed and recorded by the researchers for the first time to their
knowledge. Primary data can be classified into two types:
• Data classified by their nature.

• Data classified according to function.
Primary data can be collected through several methods. Some

of the
important ones are:
i. Observation method
ii. Interview method
iii. Questionnaires
iv. Schedules
v. Other methods
• Secondary data are statistics not gathered for the immediate

study at hand but for some other purposes.
Secondary data can be classified into two types:
• Internal data which include sales analysis.

• External data which include libraries, literature etc.
78 | P a g e
TECHNIQUES USED IN THIS STUDY
In this study, we have used various statistics tools like descriptive

statistics, percentage, ratio analysis, annual growth rate etc.
for analyzing, interpreting and comparison of different mutual fund
schemes. The Sharpe Index Model is also used to analyze the
performance evaluation and ranking for the difference mutual funds
schemes in India.
SCOPE OF THE STUDY:
The 5 most preferred public and private sector mutual funds schemes have
been taken for the study. These public and private mutual funds schemes
were studies during the period of 1st April, 2009 to 31st March, 2010.
LIMITATIONS OF THE STUDY:
Due to shortage of time and money, we selected only 5 mutual funds

schemes which include public and private mutual funds. The data was
collected for analysis from 1 April, 2009 to 1 April, 2010. My study is
based on the limited 5 mutual funds schemes only which affect the results
of the study.
ANALYSIS & INTERPRETATION
PERFORMANCE EVALUTION OF MUTUAL FUNDS

SCHEMES:
79 | P a g e
Portfolio managers evaluate their portfolio performance and identify the sources
of strength and weakness. The evaluation of the portfolio provides a feed back
about the performance to evolve a better management strategy. Even through
evaluation of portfolio performance is considered to be the last stage of
investment process, the managed portfolios are commonly known as mutual
funds. Various managed portfolios are prevalent in the capital market. Their
relative merits of return and risk criteria have to be evaluated.
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 can not 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.
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 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-à-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
80 | P a g e
with the returns in the market. While unsystematic risk can be diversified through
investments in a number of instruments, systematic risk can not. By using the
risk return relationship, we try to assess the competitive strength of the mutual
funds vis-à-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. The most important and widely used measures of
performance are:
i. The Treynor Measure

ii. The Sharpe Measure
iii. Jenson Model
iv. 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.
81 | P a g e
• 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 well-diversified 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
82 | P a g e
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.
83 | P a g e
The evaluation part is very important and needs a lot of concentration. The
statistical tools help us in reaching suitable results. In the study, we have taken
help of statistical tools like mean, standard deviation and the most important tool
which evaluates the performance is the Sharpe index model.
Sharpe’s Performance Index Model:-
The Sharpe ratio or Sharpe index or Sharpe measure or Performance

index model is a measure of the excess return (or Risk Premium) per unit of risk
in an investment asset or a trading strategy, named after William Forsyth Sharpe.
Since its revision made by the original author in 1994, it is defined as:
where R is the asset return, Rf is the return on a benchmark asset, such as the
risk free rate of return, E[R − Rf] is the expected value of the excess of the asset
return over the benchmark return, and σ is the standard deviation of the asset
excess return.
Note, if Rf is a constant risk free return throughout the period,
The Sharpe ratio is used to characterize how well the return of an asset
compensates the investor for the risk taken. When comparing two assets each
with the expected return E[R] against the same benchmark with return Rf, the
asset with the higher Sharpe ratio gives more return for the same risk. Investors
are often advised to pick investments with high Sharpe ratios. However like any
mathematical model it relies on the data being correct. Pyramid schemes with a
84 | P a g e
long duration of operation would typically provide a high Sharpe ratio when
derived from reported returns but the inputs are false. When examining the
investment performance of assets with smoothing of returns (such as with profits
funds) the Sharpe ratio should be derived from the performance of the underlying
assets rather than the fund returns.
Sharpe ratios, along with Tenor ratios and Jensen's alphas, are often used to rank
the performance of portfolio or mutual fund managers. This ratio was developed
by William Forsyth Sharpe in 1966. Sharpe originally called it the "reward-to-
variability" ratio in before it began being called the Sharpe Ratio by later
academics and financial professionals.
Sharpe's 1994 revision acknowledged that the risk free rate changes with time.
Prior to this revision the definition was assuming a constant Rf .
Recently, the (original) Sharpe ratio has often been challenged with regard to its
appropriateness as a fund performance measure during evaluation periods of
declining markets.
The Sharpe ratio has as its principal advantage that it is directly computable from
any observed series of returns without need for additional information
surrounding the source of profitability. Unfortunately, some authors are
carelessly drawn to refer to the ratio as giving the level of 'risk adjusted returns'
when the ratio gives only the volatility of adjusted returns when interpreted
properly. Other ratios such as the Bias ratio (finance) have recently been
introduced into the literature to handle cases where the observed volatility may
be an especially poor proxy for the risk inherent in a time-series of observed
returns.
SHARPE’S PERFORMANCE INDEXES MODEL:
85 | P a g e
Sharpe’s 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 portfolio’s average rate of return and risk less rate
of return. The standard deviation of the portfolio indicates the risk. The index
assigns the highest values to assets that have best risk-adjusted average rate of
return. The Sharpe ratio provides me with a return for unit of the risk measure.
For example: assume equity fund one returned 20% over the last 5 year, with a
standard deviation of 2%. The risk free rate is generally the interest rate on a
government security. Assume that the average return of a risk free government
bond fund over this period was 7.5%. The Sharpe ratio would be (the return of
the portfolio-the risk free rate)/ the standard deviation of the portfolio. In the case
of equity fund one, the Sharpe ratio is (20%-7.5%)/ 2% or 6.5%. therefore, for
each unit of risk, the fund returned 6.5% over the risk free rate.
Generally, investors evaluating the performance of the fund would compare its
Sharpe ratio to a benchmark. This could include, but is not limited to, the average
performance of similar funds and an equity index. For example, assume the S&P
500 was used as a benchmark. Further, assume that the return of S&P 500 index
fund over the last 5 year was 10% with a standard deviation of 2%. The Sharpe
ratio for index fund is (10%-7.5%)/2% or 1.5%. An investor doing a side by side
comparison between equity fund 1 and the S&P 500 index fund would clearly
prefer equity fund 1. this fund provided a higher level of excess return for each
unit of risk.
Some Statistics of Sharpe Index Model:
Sharpe Index = Portfolio average return - Risk free rate of return.
Standard Deviation of the portfolio
Rp − R f
S t=
σp
86 | P a g e
Where St = Sharpe Index
Rp = Portfolio average return
Rf = Risk free rate of return (currently it is considered as

7.5%)
∑[ X −Y ] [ X −Y ]
−∑
2
σp =
σ p = Standard deviation N N
Where, X = monthly return Y = average monthly

return
N = total number of periods
NAV and corresponding returns of 5 Mutual Funds

Schemes:
In this study, we have selected the 5 mutual fund companies. Following is the
NAV and corresponding return of last 1 year starting from 1st April, 2009 to 31st
March, 2010. The funds are chosen randomly from the available means.
87 | P a g e
***PERFORMANCE EVALUTION OF
MUTUAL FUNDS SCHEMES***
• Birla Sunlife Mutual Fund
Birla Sunlife Mutual Fund is one of India's leading mutual funds with assets of
over Rs.17, 098 crore under management as of Aug 2006. Birla Sun Life Asset
Management Company Limited, the investment manager of Birla Sunlife Mutual
Fund, is a joint venture between the Aditya Birla Group and Sun Life
Financial Services, leading international financial services organization.
Established in 1994, Birla Sunlife AMC provides investors a range of 18

investment options, which include diversified and sector specific equity schemes,
a wide range of debt and treasury products, and two offshore funds. Both the
sponsors have equal stakes in the AMC.
In recognition to its high quality investment products, Birla Sun Life AMC became
No. of schemes 71
No. of schemes including options 219
Equity Schemes 64
88 | P a g e
Debt Schemes Accman Institute of Management
106
Short term debt Schemes 17
Equity & Debt 10
Money Market 0
Gilt Fund 16
India's first asset management company to be awarded the coveted ISO
9001:2000 certification by DNV Netherlands.
• Corpus Under Management: Rs.49983.17 Crs. as on Feb 28, 2009
• Key Personnel: Mr. Donald Stewart (Chairman),
A Balasubramanian (CEO), Ashok Suvarna (COO), Abhay

Palnitkar (CFO),
Sanjay Singal (CMO), Bhavdeep Bhatt (Head Products),
For Performance Comparison we take three Mutual Fund
Schemes of Company:
 Birla Sun Life Equity Fund (Growth)
 Birla Sun Life Income Fund (Growth)
 Birla Sun Life Tax Plan (Growth)
89 | P a g e
The Monthly NAV & Returns of above three Mutual Fund Schemes as
Follows:-
 Birla Sun Life Equity Fund (Growth)
Particular
Net Assets Value Monthly Return
Month (NAV – In Rs.) (In %age)
April 2009 123.90 - 183.76 48.3132
May 2009 183.76 - 195.43 6.3507
June 2009 195.43 - 194.66 -0.3940
July 2009 194.66 - 216.34 11.1374
August 2009 216.34 - 216.34 0.0000
September 216.34 - 231.95 7.2155

2009
October 2009 231.95 - 223.08 -3.8241
November 223.08 - 239.77 7.4816

2009
December 239.77 - 252.08 5.1341
2009
January 2010 252.08 - 241.77 -4.0900
February 2010 241.77 - 237.14 -1.9150
March 2010 237.14 - 252.91 6.6501
AVERAGE RETURN 6.8383 %
Calculation of Sharp Index or Sharp Ratio:
Sharpe Index = Portfolio average return - Risk free rate

of return.
90 | P a g e
Rp − R f
S t=
σp
6.84% − 7.50%
St =
13 .39
S t = −0.049
 Birla Sun Life Income Fund (Growth)
Particular
April 2009 32.0807 - 31.9038 -0.5514
May 2009 31.9038 - 32.3045 1.2560
June 2009 32.3045 - 33.0633 2.3489
July 2009 33.0633 - 32.8129 -0.7573
August 2009 32.8129 - 33.0589 0.7497
September 33.0589 - 33.3736 0.9519

2009
October 2009 33.3736 - 33.9135 1.6177
November 33.9135 - 33.7813 -0.3898

2009
December 33.7813 - 33.8415 0.1782
2009
January 2010 33.8415 - 33.7849 -0.1673
February 2010 33.7849 - 33.7849 0.0000
March 2010 33.7849 - 33.9643 0.5310
91 | P a g e
Sharpe Index = Portfolio average return - Risk free rate of
return.
Rp − R f
S t=
σp
0.48% − 7.50%
St =
0.9027
S t = −7.78
 Birla Sun Life Tax Plan (Growth)
Particular
April 2009 7.13 - 8.65 21.3184
May 2009 8.65 - 10.66 23.2370
June 2009 10.66 - 10.28 -3.5647
July 2009 10.28 - 11.44 11.2840
August 2009 11.44 - 11.44 0.0000
September 2009 11.44 - 12.19 6.5559
October 2009 12.19 - 11.42 -6.3167
November 2009 11.42 - 12.24 7.1804
December 2009 12.24 - 12.87 5.1471
January 2010 12.87 - 12.15 -5.5944
February 2010 12.15 - 12.09 -0.4938
March 2010 12.09 - 12.85 6.2862
AVERAGE RETURN (in %age) 5.4199 %
92 | P a g e

return.
Rp − R f
S t=
σp
5.42% − 7.50%
St =
9.19
S t = −0.226
Interpretation of the Funds Performance

Particular Average Sharp Index Rank
Return Ratio
Birla Sun Life Equity Fund- 6.8383 % - 0.049 I
Growth
Birla Sun Life Income Fund 0.4806 % - 7.78 III
-Growth
Birla Sun Life Tax Plan 5.4199 % - 0.226 II
(Growth)
93 | P a g e
Kotak Mahindra Mutual Fund
Kotak Mahindra mutual fund is one of the leading mutual funds in the country
with assets of over Rs.12,530 crore under management as of Aug 2006The fund
is promoted by Kotak Mahindra Bank, one of India's leading financial institutions
that offer financial solutions ranging from commercial banking, stock broking, life
insurance and investment banking.
Kotak Mahindra Asset Management Company Limited, a wholly owned subsidiary
of Kotak Mahindra Bank, is the asset manager for Kotak Mahindra mutual fund.
The company is headed by Uday Kotak of Kotak Bank as chairman and the fund
management function is headed by Sandesh Kirkire, chief executive officer.
Kotak Mahindra mutual fund launched its schemes in December 1998 and today
manages assets of 4, 34,504 investors in various schemes. Kotak Mahindra
mutual fund was the first fund house in the country to launch a dedicated gilt
scheme investing only in government securities.
No. of schemes 50
Equity Schemes 22
Debt Schemes 74
Equity & Debt 1
Money Market 0
Gilt Fund 7
• Corpus Under Management: Rs.36776.2375 Crs. as on May

31, 2010
• Key Personnel: Uday S Kotak (Chairman), Sandesh Kirkire (CEO),

Alroy Lobo (Chief Strategist & Global Head Equities Asset
Mgmt),
V R Narasimhan (CCO), R. Krishnan (COO)
94 | P a g e
Sandeep Kamath (Compliance), R. Chandrasekaran (IRO)
Schemes of Company:
 Kotak Equity-FOF-Growth
 Kotak Income Plus-(Growth)
 Kotak Tax Saver-Scheme-Growth
Follows:
 Kotak Equity-FOF-Growth
Particular
April 2009 18.755 - 20.77 10.7438
May 2009 20.77 - 27.76 33.6543
June 2009 27.76 - 27.516 -0.8790
July 2009 27.516 - 30.134 9.5145
August 2009 30.134 - 30.134 0.0000
September 30.134 - 32.362 7.3936

2009
October 2009 32.362 - 31.2190 -3.5319
November 31.2190 - 33.2560 6.5249

2009
December 33.2560 - 34.354 3.3017
2009
January 2010 34.354 - 33.1050 -3.6357
February 2010 33.1050 - 32.9910 -0.3444
95 | P a g e
March 2010 32.9910 - 34.8960 5.7743
AVERAGE RETURN 5.7097%

return.
Rp − R f
S t=
σp
5.71% − 7.50%
St =
9.64
S t = −0.186
 Kotak Income Plus-(Growth)
96 | P a g e
Particular
April 2009 12.8357 - 13.1026 2.0794
May 2009 13.1026 - 13.736 4.8342

June 2009 13.736 - 13.6629 -0.5249
July 2009 13.736 - 14.0937 3.1455

August 2009 14.0937 - 14.0937 0.0000
September 2009 14.0937 - 14.1651 0.5066
October 2009 14.1651 - 14.2771 0.7907

November 2009 14.2771 - 14.5153 1.6684
December 2009 14.5153 - 14.6471 0.9080

January 2010 14.6471 - 14.5702 -0.5250
February 2010 14.5702 - 14.5597 -0.0721

March 2010 14.5597 - 14.8148 1.7521

return.
Rp − R f
S t=
σp
1.21% − 7.50%
St =
1.53
S t = −4.11
97 | P a g e
 Kotak Tax Saver-Scheme-Growth
Particular
April 2009 9.122 - 9.98 9.4058
May 2009 9.98 - 13.789 38.1663

June 2009 13.789 - 13.447 -2.4802
July 2009 13.447 - 14.894 10.7608

August 2009 14.894 - 14.894 0.0000
September 2009 14.894 - 15.918 6.8753
October 2009 15.918 - 14.9270 -6.2257

November 2009 14.9270 - 16.06 7.5903
December 2009 16.06 - 16.675 3.8294

January 2010 16.675 - 15.85 -4.9475
February 2010 15.85 - 15.8110 -0.2461

March 2010 15.8110 - 17.1080 8.2031
AVERAGE RETURN (in %age) 5.9110%

return.
Rp − R f
S t=
σp
5.91% − 7.50%
St =
11.27
S t = −0.141
98 | P a g e
Return Ratio
Kotak Equity-FOF-Growth 5.7097 % - 0.186 II
Kotak Income Plus- 1.2136 % - 4.11 III
(Growth)
Kotak Tax Saver-Scheme- 5.9110 % - 0.141 I
Growth
• Escorts Mutual Fund
Escorts Mutual Fund is promoted by the business conglomerate Escorts group.

Escorts Asset Management Limited acts as the AMC to the mutual fund. Escorts
Mutual Fund usually offers open ended schemes and the fund category is Equity-
balanced fund. The fund is a member of the Escort Group of Companies, which
deals with a number of high growth industries like construction and material
handling equipment, farm machinery, two wheelers, auto ancillary products and
financial Services. Balanced Fund, Growth Plan and Floating Rate Fund are some
popular open ended plans of Escorts Mutual Fund. Balanced Fund aims to
generate long term capital appreciation and current income from a well
diversified
portfolio of No. of schemes 13
Equity Schemes 13
99 | P a g e
Debt Schemes 7
Equity & Debt 4
Money Market 0
Gilt Fund 2
equity shares and fixed income securities. Floats Rates objective is to make
regular income through investment in a portfolio comprising substantially of
Floating Rate Debt Securities. Growth Plan generates capital appreciation by
investing mainly in a well diversified portfolio of equity shares with growth
potential.
• Corpus Under Management: Rs.195.75 Crs. as on May 31, 2010
• Key Personnel: Rajan Nanda (Chairman & MD), Lalit K Khanna (CEO &
Compliance),
Sanjay Arora (CIO), Mohini Sharma (IRO).
• Fund Managers: Mr. Jagveer Singh Fauzdar ,
Mr. Sanjeev Sharma.

Schemes of Company:
 Escorts Growth Plan (Growth)
 Escorts Income Plan (Growth)
 Escorts Tax Plan (Growth)
SCHEME DETAILS AS FOLLOWS OF ABOVE:
100 | P a g e
• Escorts Growth Plan (Growth)
Fund Size as on May 31, 2010

Fund Size ( Rs. in 6
crores)
Asset Allocation as on May 31, 2010
Equity 73.6172368421053
%
Debt 0%
Others 26.3827631578947
%
Portfolio as on May 31, 2010
EQUITY*
Company Name Instrume No. of Market % of Net
nt Shares Value (Rs. in Assets
crores)
Kalyani Investment
Equity --- 0.27 4.57
Company Ltd.
LIC Housing Finance Ltd Equity 2400 0.23 3.76
McNally Bharat
Equity 7000 0.21 3.49
Engineering Corporation
Tata Motors Ltd Equity 2730 0.21 3.43
Jammu and Kashmir
Equity 2700 0.20 3.39
Bank Ltd
Hindustan Dorr-Oliver
Equity 16286 0.19 3.12
Ltd
Maharashtra Seamless
Equity 4500 0.17 2.89
Ltd
Motherson Sumi
Equity 11000 0.15 2.57
Systems Ltd
Kalyani Steels Ltd. Equity 17014 0.14 2.28
HBL Nife Power Systems
Equity 41000 0.13 2.16
Ltd
IL & FS Transportation
Equity 4522 0.13 2.11
Networks Ltd.
Andhra Bank Equity 9000 0.12 2.05
101 | P a g e
Glenmark
Equity 4400 0.12 1.99
Pharmaceuticals Ltd.
Oriental Bank of
Equity 3500 0.12 1.96
Commerce Ltd
Indian Bank Equity 5000 0.11 1.91
Mazda Equity 10000 0.11 1.89
Godawari Power & Ispat
Equity 4750 0.11 1.78
Ltd.
Nagarjuna Construction
Equity 6000 0.10 1.74
Company Ltd
PSL Limited Equity 8000 0.10 1.63
Unichem Laboratories
Equity 2345 0.09 1.56
Ltd
Gujarat NRE Coke Ltd. Equity 14061 0.09 1.5
Techno Electric & Engg
Equity 2900 0.08 1.35
Co Ltd.
JaiPrakash Associates
Equity 6300 0.08 1.31
Ltd.
Asian Hotels Ltd Equity 1800 0.08 1.29
Zee News Limited Equity 53010 0.07 1.16
Chillwinds Hotels Ltd. Equity 0.07 1.12
Vardhaman Hotels Ltd Equity 0.07 1.12
Allied Digital Services
Equity 3000 0.07 1.11
Ltd
IRB Infrastructure
Equity 2500 0.07 1.1
Developers Ltd.
Polyplex Corporation Ltd Equity 3125 0.07 1.1
Ranbaxy Laboratories
Equity 1500 0.06 1.07
Ltd
SJVN Ltd Equity 25755 0.06 1.06
Mclead Russel India Ltd. Equity 3000 0.06 0.98
Industrial Development
Equity 5000 0.06 0.95
Bank of India Ltd
Alphageo (India) Ltd Equity 2991 0.06 0.95
ITC Ltd Equity 2000 0.06 0.94
Marg Constructions Ltd. Equity 3256 0.06 0.94
Visaka Industries Ltd Equity 3184 0.05 0.88
102 | P a g e
Piramal Healthcare Ltd Equity 1000 0.05 0.86
Suzlon Energy Ltd. Equity 9000 0.05 0.84
Supreme Infrastructure
Equity 1735 0.03 0.57
India Ltd
Punj Lloyd Ltd. Equity 2000 0.02 0.4
Mid-Day Multimedia
Equity 6000 0.02 0.29
Limited
Gujarat Apollo Inds. Ltd. Equity 626 0.01 0.22
Simbhaoli Sugar Mills
Equity 3540 0.01 0.22
Ltd
Fem Care Pharma Ltd. Equity 0.00 0.01
* No. of shares shown above may have been calculated on the basis of
percentage of net assets and market values taking NSE closing prices and not
necessarily declared by fund house.
OTHERS
Company Name Instrument Market Value % of Net
(Rs. in crores) Assets
Current Assets Current
1.5829 26.3
Assets
103 | P a g e
The Monthly NAV & Returns of above Mutual Fund Scheme as Follows:

Particular
April 2009 34.8155 - 36.6330 5.2204
May 2009 36.6330 - 56.9001 55.3247
June 2009 56.9001 - 55.5782 -2.3232
July 2009 55.5782 - 60.7149 9.2423
August 2009 60.7149 - 60.7149 0.0000
September 60.7149 - 63.0134 3.7857

2009
October 2009 63.0134 - 60.7351 -3.6156
November 60.7351 - 64.4480 6.1133

2009
December 64.4480 - 68.3673 6.0813
2009
January 2010 68.3673 - 65.7441 -3.8369
February 2010 65.7441 - 64.8682 -1.3323
March 2010 64.8682 - 70.1250 8.1038

return.
104 | P a g e
Rp − R f
S t=
σp
6.90% − 7.50%
St =
15.252
S t = −0.039
• Escorts Income Plan (Growth)

Fund Size ( Rs. in crores) 4.2
Equity 0%
Debt 81.9686842105263%
Others 18.0313157894737%
105 | P a g e
DEBT
Company Name Instrume Rating No. of Market Percentage
nt Debenture Value (Rs. of Net
s in crores) Assets
Rural Electrification
Bond 0.95 22.56
Corporation
Tata Sons Ltd. Bond 0.75 17.84
ICICI Home Finance Co
Bond 0.72 17.19
Ltd
ICICI BANK LTD. Bond 0.52 12.33
State Bank of India Bond 0.51 12.05
OTHERS
Company Name Instrument Market Value % of Net Assets

(Rs. in crores)
Monnet Ispat Ltd.

Commercial
0.5398 12.84
Paper
Current Assets Current Assets 0.2181 5.19
The Monthly NAV & Returns of above Mutual Fund Scheme as Follows:
106 | P a g e
Particular
April 2009 27.1535 - 28.2081 3.8838
May 2009 28.2081 - 27.8613 -1.2294
June 2009 27.8613 - 28.1730 1.1188
July 2009 28.1730 - 28.1160 -0.2023
August 2009 28.1160 - 28.1160 0.0000
September 28.1160 - 28.3370 0.7860

2009
October 2009 28.3370 - 28.4620 0.4411
November 28.4620 - 28.9679 1.7775

2009
December 28.9679 - 28.9170 -0.1757
2009
January 2010 28.9170 - 29.0567 0.4831
February 2010 29.0567 - 29.0088 -0.1649
March 2010 29.0088 - 29.2065 0.6815

return.
Rp − R f
S t=
σp
0.6167 % − 7.50%
St =
1.227
S t = −5.610
107 | P a g e
• Escorts Tax Plan (Growth)

Fund Size ( Rs. in crores) 5.56
Equity 84.2244736842105%
Debt 0%
Others 15.7755263157895%
108 | P a g e
EQUITY*
Company Name Instrume No. of Market % of Net
nt Shares Value (Rs. in Assets
crores)
Tata Motors Ltd Equity 5459 0.41 7.41
J Kumar Infraprojects
Equity 17175 0.33 6
Ltd.
Kalyani Investment
Equity 0.22 3.89
Company Ltd.
Larsen & Toubro Limited Equity 1300 0.21 3.81
Indian Bank Equity 9000 0.21 3.72
Oriental Bank of
Equity 6000 0.20 3.62
Commerce Ltd
Axis Bank Ltd Equity 1250 0.15 2.77
Power Finance
Equity 5200 0.15 2.77
Corporation Ltd
McNally Bharat
Equity 5000 0.15 2.69
Engineering Corporation
Punjab National Bank Equity 1400 0.14 2.52
JBF Industries Ltd Equity 10000 0.13 2.41
PTC India Ltd. Equity 13000 0.13 2.41
Motherson Sumi
Equity 9000 0.13 2.27
Systems Ltd
PSL Limited Equity 10000 0.12 2.19
GEI Industrial Systems
Equity 10000 0.12 2.14
Ltd
Apar Industries Ltd Equity 5000 0.12 2.11
Ashok Leyland Ltd Equity 19000 0.11 2.06
Sunil Hitech Engineers
Equity 5000 0.11 1.96
Ltd.
Kalyani Steels Ltd. Equity 13410 0.11 1.94
South Indian Bank Ltd Equity 6100 0.10 1.86
Unichem Laboratories
Equity 2487 0.10 1.79
Ltd
Maruti Suzuki India Ltd. Equity 800 0.10 1.78
Jupiter Bio Science Equity 11805 0.10 1.76
109 | P a g e
Titagarh Wagons Ltd Equity 2800 of Management
Accman Institute 0.09 1.62
Zee News Limited Equity 62054 0.08 1.47
GVK Power &
Equity 18000 0.08 1.4
Infrastructure Ltd.
Bank Ltd
JaiPrakash Associates
Equity 6000 0.07 1.34
Ltd.
Hindustan Lever Ltd Equity 3150 0.07 1.34
Federal Bank Ltd
The Monthly Equity
NAV & Returns of above 2000
Mutual Fund 0.07 1.24
Scheme as Follows:
Tata Sponge Iron Ltd Equity 2000 0.06 1.15
Particular
ITC Ltd Equity 2000 0.06 1.02
Godawari Power & Ispat
Month (NAV – In
Equity Rs.)
2500 0.06 (In %age)
1.01
Ltd.
April 2009 25.9839 - 27.2905 5.0285
Elantas Beck India Ltd. Equity 1002 0.05 0.98
MayNetworks
Karuturi 2009 Ltd 27.2905
Equity
- 37.1072
38500 0.05
35.9711
0.96
June
Allied 2009
Digital Services 37.1072 - 38.6629 4.1924
Equity 2297 0.05 0.92
Ltd
July 2009 38.6629 - 40.8944 5.7717
Asian Hotels Ltd Equity 897 0.04 0.69
AugustHotels
Chillwinds 2009Ltd. 40.8944
Equity - 40.8944 0.03 0.0000
0.6
Vardhaman Hotels Ltd
September Equity
40.8944 - 42.8570 0.03 0.6
4.7992
Mid-Day Multimedia Ltd.
2009 Equity 5500 0.02 0.29
October
Piramal 2009 Ltd
Healthcare 42.8570 - 41.6245
Equity 200 0.01 -2.8758
0.18
IL &November
FS Transportation 41.6245 - 44.1556 6.0808
Equity 327 0.01 0.16
Networks Ltd.
2009
Shree Renuka Sugars
December 44.1556 - 45.8891 3.9259
Equity 100 0.00 0.01
Ltd.
2009
* No. of2010
January shares shown above may have
45.8891 been calculated on the basis
- 44.3687 of
-3.3132
percentage of net assets and market values taking NSE closing prices and not
February 2010 44.3687
necessarily - 42.6067
declared by fund house. -3.9713
March 2010 42.6067 - 45.3606 6.4635

OTHERS
Company Name Instrument Market Value % of Net
AVERAGE RETURN (in %age)
(Rs. in crores) 5.1727
Assets %
Current Assets Current
0.8776 15.78
Assets

return.
Rp − R f
S t=
σp
5.173 % − 7.50%
St =
10.01
110 | P a g e S t = −0.232
Return Ratio
Escorts Growth Plan (Growth) 6.8970 % - 0.039 I
Escorts Income Plan (Growth) 0.6167 % - 5.160 III
Escorts Tax Plan (Growth) 5.1727 % - 0.232 II
• ICICI Prudential Mutual Fund

Prudential ICICI Mutual Fund is the largest private sector mutual fund in India with
assets of over Rs.34,119 crore under management as of Aug 2006. The asset
management company, Prudential ICICI Asset Management Company Limited, is
a joint venture between Prudential Plc, Europe's leading insurance company and
ICICI Bank, India's premier financial institution.
Prudential Plc holds 55 per cent of the asset management company and the
balance by ICICI Bank. In a span of just over six years, Prudential ICICI Asset
Management Company has emerged as one of the largest asset management
companies in the country. The Company manages a comprehensive range of
schemes to meet the varying investment needs of its investors spread across 68
cities in the country. The management is headed by Pankaj Razdan, managing
director and the fund management team is headed by Nilesh Shah, chief
investment officer.
111 | P a g e
No. of schemes 98
Equity Schemes 59
Debt Schemes 213
Equity & Debt 4
Money Market 0
Gilt Fund 7
• Corpus Under Management: Rs.68324.057017781 Crs. as on May

29, 2009
• Key Personnel: Ms. Chanda Kochhar (Chairman), Nimesh Shah (CEO &
CIO),
Supriya Sapre (Compliance), Kamaljeet Saini (IRO),
Schemes of Company:
• ICICI Prudential Growth Plan-(Growth Option)
• ICICI Prudential Income Plan- (Growth Option)
• ICICI Prudential Tax Plan-(Growth Option)
112 | P a g e
Follows:
• ICICI Prudential Growth Plan-(Growth Option)
Particular
April 2009 72.94 - 79.73 9.3090
May 2009 79.73 - 99.72 25.0721
June 2009 99.72 - 98.41 -1.3137
July 2009 98.41 - 107.67 9.4096
August 2009 107.67 - 107.67 0.0000
September 107.67 - 116.39 8.0988

2009
October 2009 116.39- 111.17 -4.4849
November 111.17 - 118.36 6.4676

2009
December 118.36 - 123.01 3.9287
2009
January 2010 123.01 - 116.67 -5.1541
February 2010 116.67 - 116.96 0.2486
March 2010 116.96 - 125.02 6.8912

return.
Rp − R f
S t=
σp
4.8727 % − 7.50 %
St =
113 | P a g e 7.84
S t = −0.335
• ICICI Prudential Income Plan- (Growth Option)
Particular
April 2009 27.7341 - 29.4577 6.2147
May 2009 29.4577 - 29.0718 -1.3100
June 2009 29.0718 - 29.4018 1.1351
July 2009 29.4018 - 29.2732 -0.4374
August 2009 29.2732 - 29.2732 0.0000
September 29.2732 - 29.3743 0.3454

2009
October 2009 29.3743 - 29.5396 0.5627
November 29.5396 - 30.0600 1.7617

2009
December 30.0600 - 29.8737 -0.6198
2009
January 2010 29.8737 - 29.9950 0.4060
February 2010 29.9950 - 29.7610 -0.7801
March 2010 29.7610 - 29.9240 0.5477

return.
114 | P a g e
Rp − R f
S t=
σp
0.6522 % − 7.50%
St =
1.8644
S t = −3.673
• ICICI Prudential Tax Plan-(Growth Option)
Particular
April 2009 56.88 - 63.84 12.2363
May 2009 63.84 - 85.02 33.1767
June 2009 85.02 - 85.95 1.0939
July 2009 85.95 - 100.63 17.0797
August 2009 100.63 - 100.63 0.0000
September 100.63 - 107.97 7.2940

2009
October 2009 107.97 - 106.29 -1.5560
November 106.29 - 113.55 6.8304

2009
December 113.55 - 121.69 7.1686
2009
January 2010 121.69 - 118.88 -2.3091
February 2010 118.88 - 120.47 1.3375
March 2010 120.47 - 127.34 5.7027
115 | P a g e
AVERAGE RETURN (in %age) 7.3379 %

return.
Rp − R f
S t=
σp
7.34% − 7.50%
St =
9.53
S t = −0.0168

Return Ratio
ICICI Prudential Growth Plan- 4.8724 % - 0.335 II
(Growth Option)
ICICI Prudential Income Plan- 0.6522 % - 3.673 III
(Growth Option)
ICICI Prudential Tax Plan- 7.3379 % - 0.0168 I
(Growth Option)
116 | P a g e
Reliance mutual fund, promoted by the Anil Dhirubhai Ambani (ADAG) group,
is one of the fastest growing mutual funds in India having doubled its assets over
the last one year. In March, 2006, the Reliance mutual fund emerged as the
largest private sector fund house in the country, overtaking Prudential ICICI which
has been holding that position for many years.
The sponsor of the fund is Reliance Capital Limited, the financial services arm of
ADAG. Reliance Capital Asset Management Limited, a wholly owned subsidiary of
Reliance Capital Limited, acts as the AMC to the fund. Directors of the company
include Amitabh Jhunjhunwala, a senior executive of ADAG. Amitabh Chaturvedi
is the managing director of the AMC. As of end August 2006, Reliance mutual
fund has Rs 28,753 crore of assets under management. Reliance Equity Fund,
launched by Reliance MF in early 2006, is the largest mutual find scheme in the
country with a fund size of over Rs 5,500 crore.
No. of schemes 57
Equity Schemes 60
Debt Schemes 100
Equity & Debt 2
Money Market 0
Gilt Fund 6
• Corpus Under Management: Rs.109485.69 Crs. as on May 31, 2010
117 | P a g e
• Key Personnel: Sundeep Sikka (CEO) Madhusudan Kela (Hd-
Equity)
Rajesh Derhgawen (Head HRD) Himanshu Vyapak (Sales &

Dist)
Milind Nesarikar (IRO) Suresh T Viswanathan

(Compliance)
Schemes of Company:
 Reliance Equity Fund-Growth Plan-(Growth Option)
 Reliance Income Fund-Retail Plan - Growth Plan

(Growth Option)
 Reliance Tax Saver (ELSS) Fund-Growth Plan- (Growth

Option)
Follows:-
 Reliance Equity Fund-Growth Plan-(Growth Option)
118 | P a g e
Particular
April 2009 9.2882 - 10.0227 7.9079
May 2009 10.0227 - 13.0391 30.0957
June 2009 13.0391 - 12.9842 -0.4210
July 2009 12.9842 - 14.0367 8.1060
August 2009 14.0367 - 14.0367 0.0000
September 14.0367 - 14.9553 6.5443

2009
October 2009 14.9553 - 14.0006 -6.3837
November 14.0006- 14.7205 5.1419

2009
December 14.7205 - 15.1637 3.0108
2009
January 2010 15.1637 - 14.5187 -4.2536
February 2010 14.5187 - 14.4188 -0.6881
March 2010 14.4188 - 14.8268 2.8296
AVERAGE RETURN 4.3241

return.
Rp − R f
S t=
σp
4.32% − 7.50 %
St =
8.92
S t = −0.357
119 | P a g e
 Reliance Income Fund-Retail Plan - Growth Plan
(Growth Option)
Particular
April 2009 29.0575 - 30.4693 4.8586
May 2009 30.4693 - 29.9680 -1.6453
June 2009 29.9680 - 30.0525 0.2820
July 2009 30.0525 - 29.9510 -0.3377
August 2009 29.9510 - 29.9510 0.0000
September 29.9510 - 30.0241 0.2434

2009
October 2009 30.0241 - 30.2366 0.7084
November 30.2366 - 30.6048 1.2177

2009
December 30.6048 - 30.5788 -0.0850
2009
January 2010 30.5788 - 30.7195 0.4601
February 2010 30.7195 - 30.6491 -0.2292
March 2010 30.7195 - 30.8515 0.6604
AVERAGE RETURN 0.5111

return.
Rp − R f
S t=
σp
.511% − 7.50%
St =
120 | P a g e 1.475
S t = −4.738
 Reliance Tax Saver (ELSS) Fund-Growth Plan- (Growth
Option)
Particular
April 2009 9,714 - 10.7404 10.5662
May 2009 10.7404 - 14.0519 30.8322
June 2009 14.0519 - 14.1409 0.6334
July 2009 14.1409 - 15.4560 9.3000
August 2009 15.4560 - 15.4560 0.0000
September 15.4560 - 16.5706 7.2114

2009
October 2009 16.5706 - 15.9138 -3.9636
November 15.9138 - 16.9834 6.7212

2009
December 16.9834 - 18.2047 7.1911
2009
January 2010 18.2047 - 17.6641 -2.9696
February 2010 17.6641 - 17.6091 -0.3114
March 2010 17.6091 - 18.7234 6.3280
AVERAGE RETURN (in %age) 5.9616

return.
121 | P a g e
Rp − R f
S t=
σp
5.96% − 7.50%
St =
8.8329
S t = −0.174

Return Ratio
Reliance Equity Fund-Growth 4.3241 % - 0.357 II
Plan-(Growth Option)
Reliance Income Fund-Retail 0.5111 % - 4.738 III
Plan - Growth Plan - Growth
Reliance Tax Saver (ELSS) 5.9666 % - 0.174 I
Fund-Growth Plan- (Growth
Option)
122 | P a g e
FINDING, SUGGESTION AND CONCLUSION
Findings:
By the above study, one can have a lot of findings regarding the
performance of the funds in his portfolio. The comparison in performance
of these mutual funds can be done easily. The following finding can be:
• The mutual funds performance is evaluated easily with the help of

Sharpe Index Model. The fund having low ‘St’ (Sharp Index Ratio)
value performs weakly and form high ‘St’ performs comparatively
well. It also shows effectiveness of Sharpe Index Method.
• With a number of mutual funds scheme existing in the market, it is
very difficult by an investor to choose the best among them. This
paper provides a necessary and sufficient result to help to choose the
best portfolio to get maximum return with minimum risk.
• Standard deviation and mean proves to be very useful statistical tool
in order to reach to some valuable result. Without help of average
and standard deviation one cannot apply Sharpe Index Method.
• The best performing and worst-performing funds can be easily
identified. The last two tables 9 & 10 are in a good support of this
study. By studying these tables one can easily interpret it. Like the
Reliance mutual fund is a best-performing fund where as UTI mutual
fund is worst-performing.
123 | P a g e
Suggestions:
This study can be easily understand and help an investor in many

ways. Some of the suggestions are below
• It is not only fund or company’s goodwill which can be taken into

consideration while choosing a portfolio, the market factors like
government policies, economic of sales and the trend in a particular
sector should also be considered.
• Today investor is having enough funds to invest in a number of
schemes. He is always in search of such statistical tools which can
provide him maximum return with lower risk. In this regard, mutual
fund is the best choice.
Conclusion:
It is well known that now-a-day, mutual funds are most popular and safe
parameter for an investor to invest. Keeping the present and future
aspects regarding the mutual funds in the India, it is easily concluded that
this market will give enough to an investor for long period. The Sharpe
Index model is easily understood and helps investors to decide which
mutual funds are performing well and which funds are not.
124 | P a g e
BIBLIOGRAPHY
• Punithavathy Pandiann (2004), “Securities Analysis and Portfolio

Management”, New Delhi, Vikash Public House Pvt. Ltd.
• www.amfindia.com
• www.sebi.gov.in
• www.rbi.org.in
• www.bseindia.com
• www.nseindia.com
• www.indobase.com/markets/index.htm
• www.valueresearchonline.com
• www.mutualfundsindia.com
• www.escortsmutualfund.com
125 | P a g e
ACCman Institute of
Management
126 | P a g e
46 A/2 Knowledge Park III, Greater Noida (U.P.) 201308
Tel. No. 0120– 2323800-02, Mob. No.: 09873076521-22
127 | P a g e

Performance Comparison of Different Mutual Funds

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ii shree ii

Summer Internship Programme

ESCORTS SECURITIES LIMITED

ESCORTS SECURITIES LIMITED

This is certify that the project work was done on “Performance

Comparison of Different Mutual Funds” submitted to Accman

Institute of Management, Greater Noida is in partial fulfillment

the requirement for the award of Post Graduate diploma in

Management, is a bonafide `work carried out by me at ‘Escorts

Securities Limited’ at Connaught Place in New Delhi. I declare

degree or diploma of this or any other Organization/ Institute/

Place: New Delhi

 A Mutual Fund is nothing more than a collection of stocks and/or

bonds. Mutual fund as a company that brings together a group of

 The mutual fund industry in India started in 1963 with the

formation of Unit Trust of India, at the initiative of the Government of

 It is registered with SEBI and functions under the Mutual Fund

 Conforming to the SEBI Mutual Fund Regulations, and with recent

mergers taking place among different private sector funds, the

With great pleasure, we express our sincere thanks to our project

We express our heartiest thanks to Prof. Mr. A. K. Paul & Prof.

• A Mutual Fund is a trust that pools the savings of a number of investors

• Portfolio Managers evaluate their portfolio performance and identify the

• Sharpe’s performance index gives a single value to be used for the

4.6 List of Mutual Fund Schemes 70

6.0 Analysis & Interpretations:- 74-113

6.2 Sharpe Performance Index Model 77-80

6.3 Performance Evaluation of Different Mutual Funds 81-112

6. 6.3.1 Birla Sunlife Mutual Funds 832-86

6.3.2 Kotak Mahindra Mutual Funds 87-91

6.3.3 Escorts Mutual Funds 92-102

6.3.4 ICICI Prudential Mutual Funds 103-107

6.3.5 Reliance Mutual Funds 108-112

7. 7.0 Findings, Suggestions/ 113-114

7.2 Suggestions / Recommendations 114

7.3 Conclusions 114

8. 8.0 Bibliography 115

Concept of Mutual Fund

• Phase 1 Establishment and Growth of Unit Trust of India -

• Phase II. Entry of Public Sector Funds - 1987-1993

UTI 11,057 38,247 5.2%

Public Sector 1,964 8,757 0.9%

Total 13,021 47,004 6.1%

• Phase III. Emergence of Private Sector Funds - 1993-96

• Phase IV. Growth and SEBI Regulation - 1996-2004

1. The Specified Undertaking,

2. The UTI Mutual Fund

ASSETS UNDER MANAGEMENT (RS. CRORES)

Phase V. Growth and Consolidation - 2004 Onwards

UNDERSTANDING MUTUAL FUND

Many Investors with common financial

The money collected from investors is invested

The fund manager realize gains or losses, and

Any capital gains or losses from such

A. If the market value of the assets of a fund is Rs. 100,000

Diversification is nothing but spreading out your money across available or

1. Income is earned from dividends on stocks and interest on bonds. A fund

All investments whether in shares, debentures or deposits involve risk: share

Thus investors choose mutual funds as their primary means of investing, as

INDICATORS OF INVESTMENT RISK

Alpha is a measure of an investment's performance on a risk-adjusted basis. It

Beta, also known as the "beta coefficient," is a measure of the volatility,

R- Squared is a statistical measure that represents the percentage of a fund

ADVANTAGES OF MUTUAL FUND