1.

Abstract
A mutual fund is a form of collective investment that pools money from many
investors, and invests the money in stocks, bonds, short-term money market
instruments, and/or other securities. Fund managers who can apply their expertise
and dedicate time to research investment options professionally manage it.

In the current scenario mutual fund investors face many problems. They gather
information about the various schemes through magazines, periodicals or through
the company website. However there is a need for aggregation of all this
information at a single place as most of this information is decentralized. For
example the information about fund A and B that belong to two different companies
can be found on their respective website. However it would be more useful if all this
information is available with a single login at a centralized location.

The investors very often face difficulties in choosing between two funds as a
comparative study between funds is a tedious process. For example a person can get
information about fund A and fund B however it is difficult to compare these funds
based on different parameters. This process gets further complicated with addition
of more funds.

For an investor it is very important to monitor the current value of his investments.
It is essential to know about the worth of his portfolio based on current market
situations. This will help him determine his profit/loss and take necessary actions to
book his profit/loss based on his expectations from his investment.

Investors in mutual fund know the importance of having a diversified portfolio. If an

investor holds multiple funds, there may be significant overlaps in their stock
holdings.
For example if two funds A and B have stakes in same stock or sector his
investment will be highly unbalanced. This will hurt portfolio diversification.

This project seeks to help the investors through a web based application which aims
at solving the above mentioned problems.

Through this application it will be possible to get essential data about the top mutual
funds in the market with a single login. It will be possible to browse through
schemes of various fund companies as shown.

Mutual Fund Investment Analyst & Portfolio Tracker 1

Fig 1: List of Schemes

The decision making process will be simplified using various information

visualization techniques like charts, graphs and context tree maps. The graphs for
various parameters like NAVs, Dividend history, CAGR, sectored allocation will be
given so that comparing two funds becomes easier. The context Tree Map will be
used to show the map of the entire mutual fund market. The performance of the
various mutual funds can then be evaluated based on the current market situation. A
snapshot of a context tree map is as shown

Fig 2: Context Treemap

The portfolio Tracker allows users to track their mutual fund schemes. User can
create several portfolios and add / delete instruments in a portfolio. The tracker is in
form of a virtual buy and sells whose portfolio worth and returns are based on
current market situations.

Finally, the application also facilitates mutual fund portfolio diversification. Tree
map Information Visualization is used to represent the stocks held in different funds
owned by a person. We map the relative holding or weight of a stock in a portfolio
to the area of that stock's rectangle in the tree map view.

The web application will help the investor invest more systematically and take
appropriate decision for his investments.

Mutual Fund Investment Analyst & Portfolio Tracker 2

 2. Existing System
Introduction:

Mutual funds provide professional management, diversification, convenience and

liquidity. As with all investments, mutual funds are not risk free. It is essential to
make an informed investment decision and choose a mutual fund which is right for
depending on the investor’s goal, investment time frame and risk tolerance.

2.1 Details of Existing System

Information Gathering:

In the existing system the investors gather information about the various schemes
through the fact sheets published by the fund companies. These fact sheets contain
information about the latest news, dividend declaration, comments from the fund
manager and a snapshot of the various schemes. The investors also refer to the
business magazines and periodicals available in the market. These periodicals are
designed to help individuals manage their investments more effectively. They cover
strategies for investing in mutual funds and also address the consumer concerns.
Extensive information can also be found on the company website. The information
given on the website is as shown.

Fig 3: Scheme Graphs

The process of Decision Making:

It is found that many individual investors rely heavily on mutual fund advertising
and on raw returns when making fund purchase decisions. Financial advisors place
greater importance on objective information sources such as comprehensive data

Mutual Fund Investment Analyst & Portfolio Tracker 3

sources and independent rankings, and much less importance on fund advertising
and popular press publications. When choosing among mutual funds, the results
indicate that financial advisors place greater importance on performance relative to
other funds with similar style, fund objective, fund risk, fund manager tenure, and
fund manager reputation, while placing less importance on sales loads and fees.
Some of the fund characteristics used in the decision process includes the fund
performance relative to other funds with similar styles, absolute performance, fund
risk and fund manager reputation among others.

Portfolio Tracker:

In the present scenario the investor tracks his investments covering stocks, mutual
funds, insurance, fixed deposits, bullion and more. This is done using painstaking
manual calculations. The investor has to perform lengthy searches for updated data.
Based on the information obtained he has to update his portfolio. Thus it involves
long battles with the calculators and sheets of paper. In this way the process of
finding one’s net worth becomes a tedious one. The figure below shows a tabular
representation of the Reliance mutual fund maintained by an investor.

Fig 4: Tabular Representation of Mutual Fund by Investor

Portfolio Diversification:

Recently, many people have become reacquainted with the fact that a certain
amount of risk is associated with investments in the stock market. Diversification is
a well-known strategy to limit the risk of financial investments. Diversification aims
at investing in a variety of stocks, preferably from different sectors. By diversifying
a portfolio, the risk of investment is distributed, and losses in one stock or market
segment (e.g. The technology sector) can potentially be compensated by profits in
other market segments. This principle also holds true for investments in equity
mutual funds.

Mutual Fund Investment Analyst & Portfolio Tracker 4

A variety of tools are available to support the investors in the selection of funds for
a portfolio. Most tools and methods mainly utilize performance indicators such as
past performance, expense ratios, fund ratings, etc. and they often use tables of some
sort. These visualizations give people little support in determining how a new fund
fits into an existing fund portfolio, and how it overlaps with funds already owned.

3. Problem Definition
3.1 Need for the project:

The existing system consists of decentralized information sources like fact sheets,
magazines, periodicals and the fund company website. As a result there is a need for
aggregation of all this information at a single place. Thus the investor can find all
the information he needs at a centralized location which enables him to save the
time and efforts required in going through the ordeal of browsing the websites of
various mutual funds. Instead he can just browse through a single website and get all
the information he wants through a single login.

The investors very often face difficulties in choosing between two funds, as a
comparative study between funds is a tedious process. The financial advisors place
greater importance on performance relative to other funds with similar style, fund
objective, fund risk, fund manager tenure, and fund manager reputation, while
placing less importance on sales loads and fees. However cross-comparison between
these funds becomes difficult due to inconsistent data formats. For example a person
can get information about fund A and fund B however it is difficult to compare
these funds based on different parameters. This process gets further complicated
with addition of more funds. As shown below comparing Kotak 30 and HDFC
Growth scheme becomes difficult as information is displayed in an inconsistent
manner.

Mutual Fund Investment Analyst & Portfolio Tracker 5

Fig 5: Inconsistent Representation of Data

For an investor it is very important to monitor the current value of his investments.
It is essential to know about the worth of his portfolio based on current market
situations. This will help him determine his profit/loss and take necessary actions to
book his profit/loss based on his expectations from his investment. All of this,
results in a need for an online portfolio tracker where the user will enter his
investments into the system and his net worth is calculated based on the current Net
Asset Value (NAV). It is equally important that the portfolio tracker monitors the
investor’s returns against benchmarks. If the Sensex rises by 10% over two months
and the fund's NAV rises by 12%, it is said to have outperformed its benchmark. If
the NAV rose by just 8%, it is said to have underperformed the benchmark. But if
the Sensex drops by 10% over a period of two months and during that time, the
fund's NAV drops by only 6%, then the fund is said to have outperformed the
benchmark.

Investors in mutual fund know the importance of having a diversified portfolio. If an

investor holds multiple funds, there may be significant overlaps in their stock
holdings.
For example if two funds A and B have stakes in same stock or sector his
investment will be highly unbalanced. This will hurt portfolio diversification. It is
important that the new visualization technique helps in determining how a new fund
fits into an existing fund portfolio and how it overlaps with funds already owned.

Mutual Fund Investment Analyst & Portfolio Tracker 6

The classic treemap proposed for the system of portfolio diversification has a
limitation that is problematic for communicating portfolio diversity. It only shows
the stocks already owned by the investor. It does not support the discovery of
unknown parts of the market.

Fig 6: Mapping of Value of Stock to Treemap

Figure above illustrates that the usual suspect, “lack of screen real estate”, is not the
cause of the problem here. The example shows a tiny market consisting of three
stocks A, B, and C. A person has invested two dollars in A, zero in B, and one dollar
in C. Both portfolio visualizations, the bar chart and the treemap, have enough
screen real estate to adequately present the data. Yet the bar chart more clearly
shows the values and relationships of all data points whereas the classic treemap
does not show B. Portfolio diversification is as much about the stocks and sectors
not invested in as it is about the stocks and market sectors already invested in. What
is needed is a treemap that shows not only the tree nodes (stocks) already present,
but also their context.
Thus there is a need for an application that will help the investor invest more
systematically and take appropriate decisions for his investments.

4. Scope

4.1 Scope of the Project:

The application will be developed to help solve the Investors’ Problems by

empowering the Investors with various Data Representation and Information
Visualization techniques that will assist in Cross Comparison between various
Mutual Fund Schemes. The application will also have a Portfolio Tracker for each
registered user that will help him to track his investments on the basis of current
profit/loss and sectored diversification.

Applications of our application can be divided into following sections:

1. Information Pool: Our application will provide users with comprehensive

information about various Mutual Fund Schemes in the market. The

Mutual Fund Investment Analyst & Portfolio Tracker 7

 information will be represented such as to enable best decision-making.
The representation will be done using techniques that could be used by a
beginner as well as any seasoned investor.
2. Scheme Comparisons: Information is useful if it enables decision-making.
The decision making process will be simplified using various Information
Visualization techniques like charts, graphs and context tree maps. The
graphs for various parameters like NAVs, Dividend history, CAGR,
sectored allocation will be given so that comparing two funds becomes
easier. The Context Tree Map will be used to represent the entire mutual
fund market. The performance of the various mutual funds can then be
evaluated based on the current market situation.
3. Portfolio Tracker: The Portfolio Tracker allows users to track their mutual
fund schemes. Users can create several portfolios and add / delete mutual
funds in a portfolio. The tracker is in the form of a virtual buy and sell
environment that will project the portfolio worth and returns based on
current market situations.

4.2 Assumptions:

1. Connectivity with AMFI India.

2. Client machine must have Java Runtime Environment (JRE) installed.

4.3 Limitations:

1. Maximum number of users using the service concurrently depends on the

hardware configuration of the server (user in queue shall be notified about
busy server).
2. Total number of schemes in Fund Database is 25 (5 Mutual Fund Companies
* 5 Schemes of each).

4.4 Design Constraints:

1. Information regarding various Mutual Funds Schemes, comparisons

between schemes, tips are some of the major features of the application.
Hence, the period for which the application will calculate and maintain the
data related to these features is a constraint.
2. Connectivity with AMFI India Website for regular data feeds had been
identified as a major design constraint.

Mutual Fund Investment Analyst & Portfolio Tracker 8

 5. Proposed System
5.1 Details of Proposed System

Mutual Funds Investment analyst and Portfolio Tracker is a web-based application

that provides investors with comprehensive information about various mutual fund
schemes in the market, analyses them using Information Visualization and
comparison techniques, and manages investment portfolios.

The application will be in client-server architecture. At the server side, a database of

registered users, mutual fund schemes, NAVs, etc. will be maintained. Programs

Mutual Fund Investment Analyst & Portfolio Tracker 9

that will compare schemes to plot graphs, draw charts, etc. will also be on the
server’s side.

Client will be any investor who logs in to the website. Snapshots of his investments
will be output to him in the form of treemaps that will be loaded as applets.

Users first need to register to take advantage of the functionalities of the application.
Once registered, he will have access to details about various mutual funds in the
market. This information, plus comparison between funds as have done by the
application will help the investor to take investment decisions. The application will
also provide the investor with appropriate tips that will help him to diversify his
portfolio.

The Portfolio Tracker will give the investor a comprehensive picture of his
investments that will include the schemes that he as invested in, as well as the
profit/loss that each scheme is making/suffering respectively. Once the user creates
his portfolio, he can add the schemes that he has invested in. The application will
then fetch the respective NAVs from the database on a daily basis and show how
much profit or loss each scheme is making or suffering respectively.

5.2 Navigational Diagram

Mutual Fund Investment Analyst & Portfolio Tracker 10

Fig: 7 Navigational Diagram

Mutual Fund Investment Analyst & Portfolio Tracker 11

 6. Hardware and Software Platform

6.1 Details of Hardware used in System development

Hardware System Requirements

32-bit
Processor 800-megahertz (MHz) Pentium III-compatible or faster
processor; 1-gigahertz (GHz) or faster processor
recommended
Memory 512 megabytes (MB) of RAM or more; 768 megabytes
(MB) or more recommended
Hard Disk Approximately 1 GB of available hard-disk space for the
recommended installation; Approximately 2 GB of
available hard-disk space for the full installation
Drive CD-ROM or DVD-ROM drive
Display Super VGA (1,024x768) or higher-resolution video adapter
and monitor
Other Microsoft Mouse or compatible pointing device
Devices

Mutual Fund Investment Analyst & Portfolio Tracker 12

6.2 Software Specification

Software System Requirements

32-bit
Operating • Windows XP with Service Pack 2 or later
System • Microsoft Windows 2000 Professional with SP4
• Microsoft Windows 2000 Server with Service Pack
4 or later
• Windows Server 2003 Standard, Enterprise, or
Datacenter editions
with Service Pack 1 or later
• Windows Server 2003 Web Edition SP1
• Windows Small Business Server 2003 with Service
Pack 1 or later

J2EE • J2SE Development Kit 5.0 (JDK 5.0)

• J2SE Runtime Environment 5.0 (JRE 5.0)

Application Apache Tomcat 5.5

Server
Database SQL Server 2005 Express Edition
Server
IDE Jbuilder, NetBeans, Dreamweaver, JFreeChart
(Front End)
Web Internet Explorer 6.0
Browser

7. System Design
Mutual Fund Investment Analyst & Portfolio Tracker 13
A) Use Case Description

I. Use Case Diagram:

<<include>>

Register Validate Details

<<include>>

<<include>>
Request Snapshot Retrieve Schemes

<<include>>
Verify User

Investor Login

<<include>> <<include>>

<<extend>>
Modify Mutual Funds

<<extend>>
<<include>>

Manage Portfolio Portfolio Tracker

<<extend>>

Request Comparison

Request Treemaps
<<extend>>

Request News <<extend>> Request Tips

<<extend>>

Request NFO's

Request Headlines

Fig 8: Use Case (Investor)

Mutual Fund Investment Analyst & Portfolio Tracker 14

 Create Mutual Fund Administrator

Administrator
Approve Scheme Details

Delete Investor

<<extend>>
Enter Tips

<<extend>>

Approve Scheme Details Enter News <<extend>>

Enter Headlines

<<include>>

Enter NFOs

Add Schemes Delete Schemes Update Schemes

Mutual Fund
Administrator

Fig 9: Use Case (Administrator/Mutual Fund Administrator)

The above use-case diagram symbolizes a graphical view of all the actors, use cases
and their interactions identified by the system. A use case thus represents a dialog

Mutual Fund Investment Analyst & Portfolio Tracker 15

between various actors and the system. The interaction between them shows all the
flow of information within the system that causes further development in the
working of the system.

Scenario Name: Registration

Scenario Description: User needs to register to use the features of the application
Basic Flow: Form validation successful, go to Homepage
Alternate Flow: Form validation unsuccessful, display error message, reload form
Pre-condition: Form validation successful
Post-condition: User has been registered, gets access to featured of application

Scenario Name: Login

Scenario Description: User logs on to system. If user is authorized to access the system,
he gets logged on, else an error message is displayed
Basic Flow: Login Id and Password match, go to Homepage
Alternate Flow: Login Id and Password don’t match, display error message
Pre-condition: No Pre-condition
Post-condition: User gets logged in, access to system, session starts

Scenario Name: Scheme snapshots

Scenario Description: Scheme snapshots are displayed on request to the user
Basic Flow: User requests for snapshots, gets the desired results
Alternate Flow: User requests for snapshots, desired information is not available
Pre-condition: User is logged in
Post-condition: Snapshots are displayed

Scenario Name: Portfolio Tracker

Scenario Description: User tracks his investment using a Portfolio Tracker
Basic Flow: User adds/ deletes schemes, tracks profit/ loss.
Alternate Flow: No alternate flow.
Pre-condition: User is logged in
Post-condition: Portfolio is shown (Current profit/ loss)

Scenario Name: Tree Maps

Scenario Description: Tree Maps are used to represent the total investment made by the
user (Share of each sector/ script will be shown as a fraction of the total investment)
Basic Flow: Tree Map requested, applet (Tree Map) loaded
Alternate Flow: Tree Map requested, applet not loaded (appropriate error displayed)
Pre-condition: User is logged in, investment has been made
Post-condition: Applet loaded, investment shown as Tree Map

Mutual Fund Investment Analyst & Portfolio Tracker 16

II. Activity Diagram

Fig 10: Activity Diagram

Mutual Fund Investment Analyst & Portfolio Tracker 17

B) Sequence Diagram:

: Investor : GUI : A pplic ation : Database

1: Request P age()

2: S end P age()

3: Dis play Page

4: Login/Regis ter()

5: V erify ()

6: Ok

7: Ok

8: O k

9: S ervices [S c hem e S naps hot/Portfolio Trac k er/News ]

10: S elec t s ervic e[S chem e S naps hot/P ortfolio Trac k er/News ]

11: Retrive Info()

12: Info

13: Info

14: Output

Fig 11: Sequence Diagram

Mutual Fund Investment Analyst & Portfolio Tracker 18

C) Class Diagram:

Inves tor
nam e
addres s
us erid
A dm in
pas s word c reates
reques ts nam e
updateinfo() us erid
Login deleteac c () pas s word

approve()
validateform () grants
reques ts adm f()
has deletem f() M FA dm in
reques ts
nam e
us erid
Regis tration pas s word
News
validateform () editm f()
updatetim e
updatedb() P ortfolio deletem f()
s howheadline() us erid addm f()
s howhotfav() num ofsc hem es
s howtips ()
c alc ulateprolos s () updates

S c hem es info
nam e
s tartdate
enddate

us es
us es
DrawGraph
S c hem eCom paris on us es graphty pe

fetc hdata() fetc hdata()

draw()

Fig 12: Class Diagram

Mutual Fund Investment Analyst & Portfolio Tracker 19

 8. Introduction to Programming Tools

8.1 Study of Programming Tools:

• J2EE

Java 2 Enterprise Edition, is a programming platform—part of the Java Platform—

for developing and running distributed multi-tier architecture Java applications,
based largely on modular software components running on an application server

• J2EE Framework

J2EE Framework consists of Enterprise Applications that are distributed systems

which contain cooperating units that exchange information across and between
machine boundaries, usually over a network. J2EE systems implement a Multi-
tiered application model using the J2EE components.

• Multi-tiered application model

I. Client-tier component
II. Web-tier component

• J2EE components
I. Client component: Application clients and applets that run on
the client machines.
II. Web component: JSP (Java Server Pages) and Java Servlet
that run on the application server.

Mutual Fund Investment Analyst & Portfolio Tracker 20

Fig 13: J2EE Client-Server-Database Model

• J2EE component development

The Java Development Kit (JDK) is a Sun product aimed at Java developers. Since
the introduction of Java, it has been by far the most widely used Java SDK.

The primary components of the JDK are a selection of programming tools,

including:

• javac – The compiler, which converts source code into Java bytecode
• jar – The archiver, which packages related class libraries into a single JAR
file
• javadoc – The documentation generator, which automatically generates
documentation from source code comments
• jdb – The debugger

The JDK also comes with a complete Java Runtime Environment, usually called a
private runtime. It consists of a Java Virtual Machine and all of the class libraries
that will be present in the production environment, as well as additional libraries
only useful to developers, such as the internationalization libraries and the IDL
libraries.

Mutual Fund Investment Analyst & Portfolio Tracker 21

Also included are wide selections of example programs demonstrating the use of
almost all portions of the Java API. Java IDEs like Jbuilder, NetBeans etc depend
upon JDK for compilation of Java application and also for generation of
documentation form source code comments.

• J2EE component deployment

The Java Runtime Environment, or JRE, is a software bundle from Sun

Microsystems that allows a computer system to run a Java application. Java
applications are in widespread use and necessary to view many Internet pages.
Normal computer users can download the current JRE version by testing their Java
Virtual Machine at the Java.com test page.

The software bundle consists of the Java Virtual Machine and the application and
programming interface (API). The API provides a set of standard class libraries. The
virtual machine and API have to be consistent with each other and are therefore
bundled together as the JRE. This can be considered a virtual computer in which the
virtual machine is the processor and the API is the user interface.

• Jbuilder

JBuilder is an IDE from Borland Corporation. Jbuilder provides a very rich design
interface that allows you to easily drag-drop GUI components like text fields,
buttons etc to your java application or a JSP page. This greatly helps in reducing the
development time of Java application. Manual coding required for creation of GUI
is greatly reduced using JBuilder.

• SQL Server 2005

SQL Server 2005 express edition is a free to download and redistributable database
management tool from Microsoft. SQL Server 2005 consists of a Graphical Data
management tool called SQL Server Management that helps design databases with

Mutual Fund Investment Analyst & Portfolio Tracker 22

ease and saves a lot on developmental time. This developmental tool mainly consists
of 5 sections
• Databases
• Security
• Server Objects
• Replication
• Management

Each of the above section has a simple and easy to use GUI for Database
Management activities.

• Tomcat

Tomcat is a web server that supports servlets and JSPs. Tomcat comes with the
Jasper compiler that compiles JSPs into servlets. Apache Tomcat version 5.5
implements the Servlet 2.4 and JavaServer Pages 2.0 specifications from the Java
Community Process, and includes many additional features that make it a useful
platform for developing and deploying web applications and web services.Jasper 2
has been redesigned to significantly improve performance over the original Jasper

Mutual Fund Investment Analyst & Portfolio Tracker 23

 9. Bibliography

1. Making Mutual Funds work for you – Investor’s concise guide by AMFI
India

2. The Layman’s Guide to Mutual Funds by HSBC Mutual Funds

3. Indian Mutual Funds Handbook by Acatos Sylvia

4. Business Week Guide to Mutual Funds by Laderman Jeffrey M

5. How Mutual Funds work by Fredman Albert I

6. Individual Investor’s Guide to Top Mutual Funds

7. Headfirst Series (JSP & Servlets)

8. Complete Reference (JSP & Servlets)

Mutual Fund Investment Analyst & Portfolio Tracker 24